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Omar Ishrak Striving to Restore Growth at Medtronic BY LAUREN UZDIENSKI, AUGUST 24, 2011

On Medtronic's Tuesday earnings call, new CEO Omar Ishrak announced that his top priority was restoring growth to the company, which he said was achievable by improving execution, optimizing innovation and accelerating globalization.

Addressing each initiative individually, Mr. Ishrak said he would pursue "operating rigor" by increasing accountability and follow-through at all levels, which will produce operating efficiencies. The company is also working to optimize their R&D program by better selecting and prioritizing investments as well as addressing customer economies in marketing. The company says they will use data to demonstrate to customers how new technology will improve overall profitability, a key benefit as hospitals face pressure to cut costs. Finally, the company will grow sales of existing therapies by expanding their global footprint. China is clearly a top priority, as Medtronic announced plans earlier this month to double their Chinese workforce by 2016.

Mr. Ishrak inherited a number of issues from the prior management, including flagging sales and troubled spine and cardio divisions. Infuse has cast a pall over the spine division, attracting academic and media criticism after allegations that Medtronic investigators under-reported adverse events and product risks. To counter some of these concerns, the company has funded two Yale University review studies of Infuse. The company will also make all of its clinical-trial results on Infuse to date available on ClinicalTrials.gov. Also noteworthy is that the tone among analysts following Tuesday's earnings release that while Medtronic's spine sales weren't stellar, they could have been worse. Spine sales declined by 3% to $825 million compared to FQ1:11, with core spinal down 5% and biologics, including Osteotech, up by 2%. Overall sales increased by 2% to $4.1 billion. Analysts had forecast sales of $4.0 billion. The stock has risen 8% since the earnings release and conference call.

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