Medtronic said Tuesday that it will provide equipment to help clinics screen for colorectal cancer in low-income and underserved communities across the U.S.
Medtronic donates new product to cancer screening in underserved areas
An outreach program to detect colorectal cancer, which affects Black people disproportionately, came as Medtronic disclosed mixed financial results.
February 22, 2022 at 10:15PM
The company is working with Amazon Web Services (AWS) to increase access to testing for a disease that afflicts Black adults disproportionately.
"This program represents our commitment towards equity, including health care technology," Giovanni Di Napoli, president of Medtronic's gastrointestinal business, said. "We believe it's an important step forward."
The American Society for Gastrointestinal Endoscopy will select locations that will receive Medtronic's GI Genius endoscopy modules, which detect polyps that can lead to colorectal cancer. Initial recipients will be announced next month.
Medtronic won regulatory approval for the device just last year. The GI Genius product is marketed as a first-of-its-kind system that detects polyps in real time.
AWS will provide "cloud credits," developed by the National Institutes of Health to lower the costs of cloud computing connected to the project.
Medtronic announced the initiative just a few hours after releasing its latest quarterly results, which showed that COVID-19 again affected its sales as hospitals, to combat the omicron variant, were forced to curtail elective procedures using its devices.
Even so, Medtronic's profit grew nearly 16% to $1.48 billion for the period ended Jan. 28, the third quarter of its fiscal year. Its adjusted per-share profit was $1.37, in line with analysts' estimates.
Revenue was flat at $7.8 billion. The company's shares rose 3.1% in Tuesday's trading.
"The impact of the COVID-19 resurgence on healthcare procedure volumes, particularly in the United States, peaked in the final weeks of our quarter in January, causing our revenue to fall short of our expectations," Geoff Martha, Medtronic's CEO, said in a statement.
Throughout the pandemic, medical device companies have seen their sales pinched as surgical procedures were delayed. But Medtronic executives are optimistic that conditions will improve in the current quarter and are forecasting 5.5% organic revenue growth for it.
"We're seeing good improvement from the tough spots of omicron that we had in January. If we just look at our first three weeks of February, we're seeing sequential improvement," Karen Parkhill, Medtronic's chief financial officer, said in an interview.
But inflationary pressures will weigh on Medtronic in coming months. "We're seeing direct labor wage increases up to 9% for the total company," Parkhill said.
In a conference call with analysts and investors, Martha fielded numerous questions about the company's diabetes operations, which saw a 7.3% drop in revenue in the third quarter.
The Food and Drug Administration issued a warning letter to Medtronic in December saying that its diabetes division had a slow and inadequate response to addressing problems and recalls with some of its insulin pumps.
Martha said the company continues to discuss the matter with the FDA and expressed confidence in the business unit. "It's a high growth market and we feel good about it," he said.
Last fall, Medtronic said that it was seeing supply-chain and manufacturing issues that were delaying the rollout of its Hugo robotic-assisted surgery system. The company has since said those issues have been resolved.
"Just overall, we're making progress on the robot," said Martha. Earlier this month it announced the first-ever procedure with Hugo in Europe.
Medtronic employs nearly 11,000 people in the Twin Cities, which serves as its operational headquarters. It has a small presence in both Russia and Ukraine, where fears continue to mount over a possible war between the two nations. "Like everyone, we hope that diplomatic efforts will prevail," Parkhill said.
In announcing the colorectal cancer initiative, Medtronic said it had been aware of disparities in access to screening, particularly in lower-income communities and in rural areas of the U.S.
The company earlier this month published an internal report on inclusion, diversity and equity that details some of the ways it will try to reduce barriers to advanced devices and diagnostic equipment.
The funding is expected to give more than 5,000 Minnesotans, especially in rural areas, high-speed broadband access across the state and help at least 139 businesses and 368 farms.
