MDT Progresses in CoreValve Trial - Analyst Blog

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Leading medical devices player, Medtronic ( MDT ) has progressed with respect to its CoreValve US pivotal trial. The company has completed the enrollment of high-risk patients in the trial. More than 1,500 patients have been enrolled with severe aortic stenosis in two studies - high or extreme risk - for aortic valve surgery. Approximately two-thirds of the patients enrolled are in the high risk study. Enrollment of extreme risk patients is currently ongoing as part of the Continued Access Policy of the US Food and Drug Administration ('FDA).   

Medtronic also received conditional approval from the FDA to study the CoreValve System in patients at intermediate risk for open-heart aortic valve replacement. Intermediate risk patients represent huge potential as estimates put the patient size in this category at almost double compared to the existing patient population that has been studied so far in the pivotal study.

Patient enrollment in the US is expected to begin shortly as part of the SURTAVI (CoreValve Su rgical R eplacement and T ranscatheter A ortic V alve I mplantation) trial. Within the SURTAVI Trial, CoreValve implantation can be performed by transfemoral, subclavian or direct aortic access, depending on the needs of the patient.

Since 2007, the CoreValve System has been implanted in more than 30,000 people in more than 60 countries outside the US. Medtronic is expecting approval of the system in the US in fiscal 2015. Besides, the company is working on getting the device approved in Japan.

Recommendation

We are encouraged by Medtronic's focus on portfolio expansion along with its aim to boost revenues from emerging markets. Although the company is progressing with its CoreValve program in the US, Edwards Lifesciences ( EW ) has the first mover advantage in the region with its Sapien transcatheter heart valve. Moreover, both Medtronic and Edwards are vying to increase their respective market share in Europe.  

Meanwhile, Medtronic continues to target returning 50% of free cash flow to shareholders. However, unfavorable currency and macroeconomic uncertainties in Southern Europe adversely affected sales during the recently reported first quarter. These headwinds have also adversely affected the company's peers including St Jude Medical ( STJ ) and Boston Scientific ( BSX ).

We have a Neutral recommendation on Medtronic. The stock retains a Zacks #3 Rank (Hold) in the short term.


 
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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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BSX , EW , MDT , STJ

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