MDT Advances in CoreValve US Trial - Analyst Blog


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Leading medical devices player, Medtronic ( MDT ) has taken one step forward in its CoreValve US pivotal trial with completion of enrollment in the extreme risk category of patients.

The company has also received approval from the US Food and Drug Administration ("FDA") to continue enrolling extreme risk patients for further investigation under a Continued Access Study protocol. Medtronic is conducting another study with high risk patients, enrollment of which is scheduled for completion by year end.

The CoreValve trial in the US is studying Medtronic's self-expanding CoreValve system in three sizes of 26mm, 29mm and 31 mm through three delivery routes - transfemoral, subclavian and directly through the aorta.

The CoreValve System is designed to replace diseased aortic valves without open-heart surgery. Globally, approximately 300,000 people have been diagnosed with this condition and roughly one-third of these patients are deemed at too high a risk for open-heart surgery.

The trial plans to enroll more than 1,500 patients, with two-thirds of patients in the high risk study. Patients in the extreme risk category are being evaluated against a performance goal while those in the high risk group are randomized equally to receive either transcatheter aortic valve implantation with the CoreValve System or to surgical aortic valve replacement.

Although Medtronic is working on getting the US approval for CoreValve, the device is already approved in Europe since 2007. During the most recent quarter, the company recorded robust growth in the Structural Heart portfolio driven by strong adoption of CoreValve in the international markets. The company is witnessing strong early adoption of the 31mm CoreValve that received CE Mark approval in July and anticipates receiving CE Mark approval for the 23 mm CoreValve in the second half of fiscal 2012.

Our Take

We are impressed with the company's regulatory progress of CoreValve in the US market. However, Edwards Lifesciences ( EW ) has the first mover advantage in this region with FDA approval of Sapien clinched in November last year.

Over the last few quarters Medtronic reported weaker sales from its two largest segments - defibrillators and spinal implants. The challenges witnessed in the US ICD market have also been felt across the board and impacted Medtronic's competitors, Boston Scientific ( BSX ) and St Jude Medical ( STJ ). To overcome these challenges, Medtronic is trying every means to revive growth. This includes penetration of international markets, portfolio expansion, focus on high-potential segments and restructuring initiatives. These should benefit the company over the long term.

Medtronic currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain our long-term Neutral recommendation on the stock.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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