Medtronic (MDT) has strengthened its Surgical Technologies portfolio with the receipt of 510(k) clearance from the US Food and Drug Administration (FDA) for Aquamantys3 System along with 8.2L Bipolar Sealer with Cutting and 6.0 Bipolar Sealer hand pieces. Subsequently, the company’s Transcollation technology and radio frequency (RF) cutting functions will be available to new and existing hand pieces.
The addition of the 8.2L Bipolar Sealer with Cutting creates a combination of Transcollation technology and cutting capability, which can potentially reduce device exchanges during surgery. According to an orthopedic surgeon, Dr. Michael Huo, the combination of Aquamantys3 System and 8.2L Sealer enables surgeons to do away with the need to use different devices for dissection during surgery.
The Transcollation technology has been used in more than 650,000 patients undergoing a variety of surgical procedures, including orthopedic reconstruction, spine surgery and surgical oncology.
Revenues from the Surgical Technologies segment increased 13% to $266 million (9% at CER) during the most recent quarter driven by strong performances in international markets and balanced growth across the portfolio of power systems, navigation product lines, monitoring, imaging and hydrocephalus management. Medtronic has strengthened its presence in the advanced surgical devices market with the recent acquisition of Salient Surgical Technologies and Peak Surgical.
Given the slowdown in its core business of pacemakers and defibrillators, over the past few years, Medtronic has been reallocating resources toward new therapies to drive profitability. Moreover, the company has adopted restructuring initiatives to align its cost structure to current market conditions to prepare the ground for long-term growth.
However, the company faces tough competition from players such as St Jude Medical (STJ) and Boston Scientific Corporation (BSX). We are currently Neutral on Medtronic, in line with our recommendation for St Jude Medical, both corresponding with the Zacks #3 Rank (Hold) in the short term.
