In a positive development for Medtronic’s (MDT) Cardiac Rhythm Disease Management (“CRDM”) segment, the US Food and Drug Administration (FDA) has approved its Consulta and Syncra cardiac resynchronization therapy-pacemaker (CRT-P) systems. Medtronic plans to begin the shipment of the products in the immediate future.
For the first time, these two CRT-Ps will include ‘Leadless ECG Waveform’ and will work together with Medtronic’s Care Link Network device data monitoring system in order to recommend the chance of remote follow -up in patients implanted with the newly approved systems.
Moreover, Consulta will also include Medtronic’s OptiVolFluid Status Monitoring and Complete Capture Management to detect the risk of acute heart failure in patients well in advance as well as ensure greater longevity of the machine. This entire product line, under the CRDM segment, will offer a more superior system with greater efficiency and user-friendly features.
The CRDM business, which constitutes a significant 30% of Medtronic’s total revenues, declined 2% year over year during the third quarter of 2011 due to slower market growth and pricing pressure. This included a 5% decline in revenue from pacemakers in the U.S. and a 5.4% decline in the international market. However, the extent of the decline in the quarter was less on a sequential basis.
Medtronic has adopted several strategic initiatives to reinforce its leadership in the fiercely competitive medical devices industry as it battles for market share with other major players such as Boston Scientific (BSX) and St. Jude Medical (STJ). Given the huge potential in the cardiac resynchronization therapy market, Medtronic has been reallocating resources towards emerging therapies to drive growth. The FDA approval, in this regard, is expected to add to the fortunes of its CRDM unit.
Medtronic is currently targeting the under-penetrated emerging economies. Moreover, its restructuring initiatives should help it sustain long-term growth. We are currently Neutral on Medtronic which corresponds to a Zacks #3 Rank (Hold).
BOSTON SCIENTIF (BSX): Free Stock Analysis Report
MEDTRONIC (MDT): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
Zacks Investment Research
