MDT Resolute for Diabetic Patients - Analyst Blog


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Studies have demonstrated that Medtronic 's ( MDT ) Resolute drug eluting stent ("DES") benefits patients suffering from coronary artery diseases ("CAD") with or without diabetes even after two years of follow-up. The Resolute Integrity stent had received approval from the US Food and Drug Administration ("FDA") in February 2012. With this approval Resolute became the first DES to be suitable for patients even with diabetes, a condition that complicates the treatment.

The stent will be of an immense help to diabetics who are at increased risk of developing CAD with high rates of mortality. Implantation of stents in patients with high blood sugar levels has hitherto been fraught with risk. As a result, conventional treatment in this patient population has been open heart surgery involving lengthy hospital stays and longer recovery periods compared to stent implants.

The study compared the effectiveness of Resolute DES in 878 diabetes patients to 1,903 patients without diabetes enrolled in the clinical program. Results demonstrated low event rates for two years in both the groups in spite of a higher risk associated with diabetic patients.  Certain adverse events like cardiac deaths or the necessity of a repeat procedure at two years of follow-up were low despite the diabetic arm recording a slightly higher number (9.6% versus 7.1% in the comparison group).

During the most recent quarter, the company recorded a 12% increase in sales from its Coronary business (globally at constant currency) with 24% growth in the US based on the successful launch of the Resolute DES. We are also encouraged to note that the launch led to doubling of DES market share in the US on a sequential basis. Pricing in the US DES market in the fourth quarter of fiscal 2012 was relatively stable on a sequential basis but down in the mid-single digits year over year.

In the international markets, Medtronic gained 150 basis points of DES share sequentially on the continued strength of Resolute Integrity, with particularly strong performances in Europe and China. Continued expansion in the US market coupled with prospective launch of Resolute in Japan should further bolster the company's market share.

Acknowledging the challenges at play in its core segments, Medtronic is in the process of launching several new products that are likely to drive growth in this difficult scenario. Many of the recently launched products are contributing significantly to the top line. Besides, the company is increasing its focus on the emerging markets. This strategy is also being followed by its peers such as Boston Scientific ( BSX ) and St Jude Medical ( STJ ).

Over the long term we have a 'Neutral' recommendation on the stock. Our recommendation corresponds to a Zacks #3 Rank ("Hold") held 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 Nasdaq, Inc.

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