Leading medical devices player, Medtronic‘s (MDT) CardioVascular product line has added to its fortunes based on an independent study. The study shows that the aortic valve disease patients using Medtronic’s CoreValve system will be getting speedy and consistent clinical benefits.
The study concludes that there is 98% chance of procedural success using CoreValve along with significant improvement in cardiac function. Medtronic’s CoreValve system, a vital product of its CardioVascular segment, is meant to treat unhealthy aortic valves without open-heart surgery or surgical removal of the original valve. This system is inserted via transcatheter aortic valve implantation (TAVI).
Earlier In October, 2010, the company received conditional approval from the US Food and Drug Administration (FDA) for studying its CoreValve system for TAVI. Later in January 2011, Medtronic received conditional approval from FDA to modify its CoreValve US pivotal clinical trial.
The trial includes two studies on two types of patient population – high risk to aortic valve surgery and extreme risk patients. Subsequent to the changes in the trial design, patients at extreme risk will not be considered for medical management but will only receive CoreValve devices in the study. Medtronic plans to enroll more than 1300 patients in the trial.
Medtronic earns revenues from seven divisions – Cardiac Rhythm Disease Management (CRDM), Spinal, CardioVascular, Neuromodulation, Diabetes, Surgical Technologies and Physio-Control. The CardioVascular segment generated sales of $774 million, up 7% year over year during the last reported quarter.
This strong result was driven by robust performance in all businesses, particularly in emerging markets where revenue increased 30%. Revenues from Structural Heart increased 12% ($241 million) on the back of growth in transcatheter valves and the acquisition of ATS Medical.
The CoreValve system has been implanted in more than 12,000 patients outside the US since it received CE Mark approval in March 2007. As most of the aortic valve disease patients globally are unfit to undergo open-heart surgery, Medtronic’s huge potential exists in the TAVI market in immediate and medium term.
However Edwards Lifescience (EW), a major competitor of Medtronic in the valve market, expects to receive approval for its Sapien heart valves in the US by the end of 2011 which which could lead to a tough encounter.
However, recently, the US District Court of Delaware denied Edwards’ request for a permanent injunction to prohibit Medtronic from manufacturing CoreValve in the US.
Medtronic is increasing its focus on emerging markets and emerging therapies and expects these to be major growth drivers going forward. Besides, the study showing the success of CoreValve device should significantly boost revenues.
However, the company operates in a highly competitive landscape with stiff competition from larger players like Boston Scientific Corporation (BSX), St. Jude Medical (STJ), Johnson & Johnson (JNJ) and Zimmer (ZMH). The company is also exposed to the risk of currency movement.
We currently have a Neutral rating on Medtronic.
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