Leading medical devices player,
) has strengthened its growing atrial fibrillation (AF) business.
This is on account of the fact that it has received the
U.S. Food and Drug Administration's (FDA) approval for its new
FlexCath Advance Steerable Sheath for the Arctic Front Advance
Cryoballoon System. Accordingly, the company also announced the
commercial launch of this second-generation sheath, which
provides greater flexibility and efficiency while delivering and
positioning the cryoballoon catheter in the left atrium to treat
paroxysmal atrial fibrillation (PAF).
Last year in August Medtronic received both CE Mark and FDA
approvals for its Arctic Front Advance Cardiac Cryoballoon. This
second generation system with its EvenCool Cryo technology is
meant for the treatment of PAF.
The cryoballoon treatment is a minimally invasive procedure
that isolates the pulmonary vein, a possible source of erratic
electrical signals that cause atrial fibrillation (AF). The use
of EvenCool Cryo technology allows the delivery of coolant inside
the balloon, thereby making the process of isolating the
pulmonary vein easier. As compared with the original system,
Medtronic's Arctic Front Advance system helps physicians to
better treat patients with complex anatomies.
During the second quarter of 2013, Medtronic's AF Solutions
business grew nearly 20% globally (at constant exchange rates)
with more than 30% growth in the U.S. market. This was driven by
the strong performance of the Arctic Front cryoballoon system
with EvenCool Cryo Technology, especially following the launch of
the Arctic Front Advance system in both the U.S. and Europe.
According to the company, AF is the most common and one of the
most under-treated heart rhythm disorders, affecting more than 7
million people worldwide. Furthermore, approximately half of the
diagnosed AF patients fail drug therapy, and if left untreated,
patients have up to five times higher risk of stroke and an
increased chance of developing heart failure. PAF results in
irregular heartbeat in the upper chambers, which start and stop
suddenly on their own, usually for minutes or days at a time.
We are encouraged by Medtronic's focus on portfolio expansion
along with its aim to boost revenues from the emerging markets.
Moreover, the company is enjoying market share gain on the back
of the Resolute Integrity drug eluting stent for the treatment of
coronary artery diseases. Meanwhile, Medtronic continues to
target returning 50% of the free cash flow to shareholders.
However, unfavorable currency and macroeconomic uncertainty in
Southern Europe adversely affected sales. These headwinds have
also adversely affected the company's peers including
St. Jude Medical
We have a Neutral recommendation on Medtronic. The stock
retains a Zacks Rank #3 (Hold). Some of the Zacks Rank #1 (Strong
Buy) stocks are
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