Medtronic (MDT) recently entered into an agreement with Nile Therapeutics for the latter’s proprietary peptide ‘cenderitide’, which is meant to treat heart failure and renal disease. Medtronic will provide adequate funding and offer its drug-device expertise to carry out Nile’s phase I clinical trial which is expected to be completed by the first quarter of 2012.
In this trial peptide will be delivered to the patients with the help of Medtronic diabetes pump technology. The financial terms of the deal were however not disclosed. A broader Phase II clinical study will take place after the completion of Phase I study.
The market for innovative heart treatment is booming. According to American Heart Association, heart failure is a rapidly growing disease with over 5 million annual cases (with 1 million of hospitalization cases which includes acute heart failure cases) in the US. The partnership with Nile helps Medtronic explore alternative treatment methods for heart failure.
Over the past few years, Medtronic has been reallocating resources for developing emerging therapies that would drive growth and elevate its position in the tough competitive landscape. Also Medtronic is emphasizing on research as well acquisition of technologies to strengthen its product pipeline.
Recently, the company’s major Structural Heart division received encouragement with the result of a study published in The Journal of Thoracic and Cardiovascular Surgery. The study shows that the patients with aortic valve or mitral valve replacement and using Medtronic’s Mosaic bioprosthetic heart valve, will see retardation in the speed of structural valve deterioration. This study supports the long-term durability of this third generation heart valve, which got the approval from the U.S. Food and Drug Administration (FDA) in 2000.
However, Medtronic faces stiff competition from major players like Boston Scientific Corporation (BSX), 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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