Medtronic's Endurant II in Europe - Analyst Blog


Leading medical devices player, Medtronic ( MDT ) announced the receipt of CE Mark followed by the launch of Endurant II AAA stent graft system in the international market. The launch of this device will enable physicians to treat patients with abdominal aortic aneurysms ("AAA") through minimally invasive endovascular aortic repair ("EVAR").

Endurant II has been developed in collaboration with more than 250 physicians from across the world. It is the advanced version of the currently available Endurant stent graft platform with additional design features that enhance its ease of use. In the US, Medtronic expects to receive approval for Endurant II in 2012.

The AAA condition leads to weakening in the body's main artery, aorta that crosses through the abdomen. Development of the device will be of immense benefit to the patient population as AAA is often labeled as the "silent killer". This is because AAA often does not give rise to symptoms until rupturing, which usually results in death.

Medtronic has been recording robust growth in its Endovascular and Peripheral business based on strong performance of the original Endurant system since it received approval from the US Food and Drug Administration (FDA) in December 2010. 

Medtronic's CardioVascular segment has been a point of focus for the company and has lately been recording impressive growth. During the most recent quarter, this segment reported revenues of $830 million, up 12% year over year (up 8% at CER) driven by growth from Coronary (up 7% to $376 million or 3% at CER), Structural Heart (up 12% to $266 million or 8% at CER) and Endovascular & Peripheral (up 25% to $188 million or 20% at CER). Revenues increased 6% in the US with 9% growth in international markets.

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 The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BSX , MDT , STJ

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