Medtronic (MDT) has launched its ‘Achieve’ mapping catheter in Europe, which is used to evaluate pulmonary vein isolation when treating paroxysmal atrial fibrillation (PAF). The product is designed tor use with the company’s Arctic Front Cardiac CryoAblation catheter system.
Earlier, in December 2010, the company had received approval from the US Food and Drug Administration (FDA) for its Arctic Front Cardiac CryoAblation catheter system, to treat drug refractory PAF. This is a type of AF where irregular heartbeats in the upper chambers start and stop suddenly on their own. This approval is significant as the company’s Cardiac Rhythm Disease Management (CRDM) has been witnessing declining sales in the past few quarters.
Over the past few years, Medtronic has been reallocating resources towards emerging therapies to drive growth and witnessed strong performance by its transcatheter valves, AF, and InterStim. The company expects revenue contribution from emerging therapies to double over the next five years.
Viewing the huge potential of the AF market, Medtronic in October 2008, initiated the AF solutions business to provide breakthrough therapies to patients and physicians. If left untreated, AF patients have five times higher risk of stroke. More than seven million people globally suffer from AF.
To expand this business, the company acquired CryoCath Technologies (flagship product, Arctic Front) in November 2008 and Ablation Frontiers (product, ablation frontiers catheters) in February 2009. With these acquisitions, the company has been aiming to expand its CRDM business into the under-penetrated market of catheter based treatment of AF.
During the third quarter of fiscal 2011, the CRDM segment recorded a 2% year over year decline in sales to $1.221 billion. Slower market growth was primarily responsible for the decline in CRDM revenues, partially offset by continued acceptance of Protecta ICDs in Europe and growth in AF solutions business.
AF sales were partly driven by the US launch of Arctic Front Cardiac CryoAblation catheter system. In February, the FDA approved the Revo MRI SureScan pacemaker, which can be used in an MRI environment. Based on these product launches and a gradual recovery in the economic scenario, Medtronic is confident of recording higher revenues from its CRDM segment going forward.
We are currently ‘Neutral’ on the stock.
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