Positive Outcome on MDT's CoreValve - Analyst Blog

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Leading medical device player Medtronic ( MDT ) recently came out with the results of two studies conducted on the company's CoreValve System delivered through the direct aortic implantation approach. The data demonstrated at the 48 th Annual Meeting of the Society of Thoracic Surgeons ( STS ) showed positive result from this kind of implantation.

Earlier, in November 2011, CoreValve System with direct aortic implantation approach got the CE (Conformité Européenne) Mark approval. This direct aortic approach has also been assessed in the CoreValve US Pivotal Trial of Medtronic.

Data in this regard showed procedural success in 92 of 93 patients treated at 12 centers across Europe. The overall 30-day mortality rate stood at 9.7%. Among the patients, 83.9% were initially detected with peripheral vascular disease and almost one-third underwent previous coronary artery bypass surgery (indicating significant preoperative risk of mortality with standard surgery).


A separate study in Italy also illustrated positive outcome of implantation of the CoreValve System through the direct aortic approach. The data of 25 patients demonstrated 92% (23 of 25 patients) survival rate at 30 days. None of the patients experienced strokes and 4 patients were implanted with pacemakers post-procedurally. All of these patients had previously diagnosed peripheral vascular disease.

The CoreValve System is designed to replace diseased aortic valves without undergoing an 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. This system is available in three sizes (26mm, 29mm and 31mm), and is the only transcatheter aortic valve implantation (TAVI) system approved for direct aortic implantation.

Although CoreValve is already approved in Europe since 2007, Medtronic is working on getting the US approval for the device. Earlier this month, the company completed the enrollment in the extreme risk category of patients for its CoreValve US Pivotal Trial.

During the most recent quarter, the company experienced 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 CE Mark approval for the 23 mm CoreValve in the second half of fiscal 2012.

Recommendation

We are impressed with Medtronic's continuous efforts to achieve the US approval for CoreValve and expect its further contribution in the international business as well. A pivotal trial for CoreValve began in Japan earlier in November.

In October, CoreValve received approval in Korea and the company is further working to get the device approved in several countries including the US, Thailand, Singapore, China, Hong Kong and Taiwan. However, Edwards Lifesciences ( EW ) has the first mover advantage in US with FDA approval of Sapien clinched in November last year.

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 leaving no stones unturned 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 , EW , MDT , STJ , STS

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