It looks like Medtronic’s Infuse Bone Graft troubles are still impacting the medical device maker’s bottom line. Though Medtronic reported a small increase in its third quarter earnings today, its spine business was down 9%, thanks in large part to slowing sales of Infuse, a genetically engineered bone graft product approved for use in certain types of spinal fusion surgeries.
“The year-over-year decline is not sustainable. We urgently need to see signs of improvement” in Medtronic’s spine business, Chief Executive Officer Omar Ishrak said on a conference call, according to a report from Reuters. Ishrak declined to say how long it may take for business to improve.
According to Reuters, Medtronic reported net earnings of $935 million, or 88 cents per share, for the third quarter that ended January 27, compared with $924 million, or 86 cents per share, a year earlier. After adjusting for one-time factors, earnings were 84 cents per share, matching the average estimate on Wall Street.
Earnings were also held down by a 9% drop in sales of implantable cardioverter defibrillators, devices used to rapid heartbeats. According to a report from the Pioneer Press, sales of those devices were hurt more than a year ago by a medical study that suggested overuse of the devices followed by word of an investigation by the US. Department of Justice.
For several years now, Medtronic’s Infuse bone growth product, which contains recombinant human Bone Morphogenetic Protein-2 (rhBMP-2), has been the subject of growing controversy. Both the U.S. Justice Department and the U.S. Senate Finance Committee have been conducting ongoing investigations of Medtronic’s marketing of Infuse, and a mounting number of personal injury lawsuits have also been filed by victims of alleged Infuse complications.
The slowing Infuse sales seen in the third quarter could be attributed to yet another medical study that questioned the safety of the spine product. That study, presented in November at the North American Spine Society by Dr. Eugene Carragee, raised worries about a possible association between high doses of rhBMP-2 and an increased risk of cancer. Infuse is often administered at higher-than-approved doses when it is used in off-label procedures.
Carragee, a prominent researcher and spine surgeon with Stanford University, is a long-time critic of Infuse. Over the summer, he published an article in The Spine Journal asserting that Medtronic-paid surgeons had failed to report serious complications from Infuse, including cancer, sterility in men, infections, bone dissolution and worsened back and leg pain. The article said complications occurred in 10 to 50 percent of patients who got the product in 13 Medtronic-funded clinical trials between 2000 and 2010.
