Medical devices major,
St. Jude Medical, Inc.
) recently won European CE Mark approval for its 23 mm Portico
Transcatheter Aortic Heart Valve Implant ("TAVI") and
Transfemoral Delivery System. The clearance has positioned the
device from the company's Cardiovascular and Ablation
Technologies Division to garner incremental revenues from the
The Portico valve, made of bovine tissue, has been designed to
improve physicians' control and accuracy in valve placement. The
valve has the unique ability to be completely re-sheathed (the
process of bringing the valve back into the delivery catheter),
repositioned at the implant site and retrieved before it is
released from the delivery system. St. Jude has designed the
Portico valve to overcome several key limitations associated with
first-generation transcatheter valves.
The European approval is supported by positive results from a
clinical trial, where it was established that the Portico valve
is safe and efficient to treat heart complications. St. Jude
further plans to initiate a European study to evaluate its 25 mm
Portico valve to win CE Mark clearance before year end.
The target market for the Portico valve are patients with
severe aortic stenosis, considered to be at high-risk (or
inoperable) for the legacy open-heart valve replacement surgery.
The valve can be implanted using a transcatheter technique rather
than through open-heart surgery.
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With several growth constraints in the mature legacy markets,
medical devices makers are aiming to expand into the fast-growing
emerging therapy areas. The TAVI market is emerging as a
substantial new growth opportunity for the top-tier MedTech
companies. St. Jude's larger rival
) TAVI product CoreValve is currently approved for marketing in
With a market cap of $11.01 billion, St. Jude is a leading
medical device manufacturer maintaining a solid rate of growth
over the past decade. We believe that new product development and
penetration into emerging markets will drive long-term growth for
However, we are wary of internal as well as external shortcomings
at the company's core Cardiac Rhythm Management ("CRM") business.
A weak foreign exchange, competitive pressures along with the
ongoing difficult macroeconomic environment continue to affect
the company's results.
Our long-term 'Neutral' recommendation on St. Jude is in
agreement with a short-term Zacks #3 Rank (Hold).