To: Bob Garda, Fuqua School of Business

To: Bob Garda, Fuqua School of Business

Project Description for Marketing Practicum

The Company: Medtronic is the world leader in medical technology providing lifelong solutions for people with chronic disease. We offer products, therapies and services that enhance or extend the lives of millions of people. Each year, 2.5 million patients benefit from Medtronic's technology, used to treat conditions such as heart disease, neurological disorders, and vascular illnesses.

Founded in 1949 in Minnesota, Medtronic has had an impressive growth record to actual sales of $7.7b for the year ended in April 2003. The company is divided into 5 Business Units: Cardiac Rhythm Management (CRM), Cardiac Surgery (CS), Vascular, Neurological & Diabetes, and Spinal ENT & SNT. The Vascular division develops products and therapies that treat a wide range of vascular diseases and conditions. These products include coronary, peripheral and neurovascular stents, stent graft systems for diseases and conditions throughout the aorta, and the industry's first distal protection system.

The Project: Medtronic Vascular received FDA approval for the commercialization of the AneuRx Stent Graft in 1999, which is used in the endovascular treatment of Abdominal Aortic Aneurysms (AAA). In the following 4 years the market for endovascular treatment of AAA has grown steadily as more physicians adopt the new technology and new competitors have entered the market.

There are 4 ways to grow Medtronic’s Endovascular Business:

-  Increase market share

-  Increase the penetration of Endovascular procedures (converting from Open Surgery to Endovascular)

-  Increase the total number of patients treated by increasing awareness through diagnosis/screening programs

-  Increase the total number of patients by treating AAA smaller than 5cm (this would require a clinical study)

The project would consist in the assessment of the market growth opportunity in the diagnosis/screening programs for AAA. The market assessment shall include an analysis of the different customers involved: physicians, hospitals and patients, to determine the target segment and the positioning of the program for each type of customer. The project should also include a proposal for the screening program structure. The screening proposal must address who shall execute the program (Medtronic, an independent 3rd party, some sort of partnership, etc), financial implications (cost and revenues) and a guideline for a roll out strategy.

The project is important because there is no awareness of the disease among the general population and the illness can go undetected until it is too late. There is a belief that if screening is adopted, the incidence of reported AAA would increase dramatically increasing the number of AAA cases treated. Medtronic has already begun developing a partnership with Life Line Screening, a company dedicated to developing screening programs, and the proposed project will provide Medtronic guidelines to continue to develop its Screening/Awareness strategy.

Background: AAA is the 13th leading cause of death in USA, and 10th cause among males above 65 years old. The disease consists of the dilation of the aorta in the abdominal section. When the dilation is greater than 5cm the consensus is that it should be treated, as the probabilities of rupture are higher than the operation risk. Although asymptomatic and harmless before it ruptures, statistically only 8% of the patients survive once it ruptures due to massive hemorrhage. Until the FDA approval of Endovascular Stent Grafts, AAA were treated exclusively with an Open Surgery procedure, however many patients that suffer the illness have other co-morbidities such as hypertension which makes them unsuitable for open surgery. In the years following the FDA approval of endovascular repair of AAA, physicians have treated some cases with Open surgery procedures and others with Endo Stent Grafts. The main driver of conversion to Endo Stent Graft has been that it is a less complicated procedure that allows can be performed on high-risk patients. However some physicians still have concerns regarding long term patency of the Endo Stent Grafts given their relatively short time on FDA trials and market.