Weekly Medical Technology Update: Medtronic And Boston Scientific

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It was an eventful week for medical technology and healthcare majors Medtronic, Inc. (NYSE: MDT) and Boston Scientific (NYSE:BSX). Medtronic ‘s stock touched a new record high on account of positive results of its IN.PACT SFA trial as well as new product launches in the spine and cardiac monitoring domains. Boston Scientific received CE approval for a new device to treat tremor and clinical trial results of its Lotus Valve system demonstrated strong performance.

Medtronic

It was an immensely eventful week for Medtronic. The medical device major released results of its IN.PACT SFA Trial, which showed that the company’s IN.PACT Admiral drug-coated balloon (DCB) was clinically superior, as well as more cost effective than standard percutaneous transluminal angioplasty (PTA) in the treatment of atherosclerotic lesions in the superficial femoral artery (SFA), or proximal popliteal artery (PPA), at 12 months. The IN.PACT Admiral DCB is still an investigative drug in the U.S. and has yet to receive FDA approval. ((Press release, Medtronic, Sept 16 2014))

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In addition, the company launched a new product for the treatment of vertebral compression fractures (VCFs) called the Kyphon Express II Balloon Kyphoplasty (BKP) platform. Kyphon BKP is a percutaneous minimally invasive technique to treat painful VCFs using inflatable bone tamps. [1] Medtronic also launched the SEEQ Mobile Cardiac Telemetry (MCT) system in the U.S., which is a wire-free heart monitor used to detect irregular heartbeats. The adhesive monitor was developed using technology developed by Corventis, Inc., which was acquired by Medtronic in June this year. [2]

– We currently have a stock price estimate of $61 for Medtronic, approximately 10% below its current market price. The company’s stock price surged by about 3% over the past week.

– We currently estimate that Medtronic will post revenues of $17.6 billion and earnings of $3.69 per share in 2014, about 3% lower than its consensus earnings of $3.82 per share.

See our complete analysis of Medtronic here

Boston Scientific

Last week, Boston Scientific reported strong performance data of its Lotus transcatheter aortic valve replacement (TAVR) system from the REPRISE II clinical trial, at one year. This follows the strong performance results for the TAVR system from the same trial in terms of safety and efficacy at six months, according to data presented by the company at EuroPCR 2014 in Paris in May. [3] ((Press release, Boston Scientific, May 21 2014)) TAVR therapy is used to replace impaired heart valves in patients who are too weak for traditional open heart surgery. The Lotus TAVR system is currently not approved for sale in the U.S. but the company competes with Medtronic’s CoreValve TAVR system and Edwards Lifesciences’ (NYSE:EW) Sapien Valve device in international markets.

The company also received CE mark for its Vercise Deep Brain Stimulation (DBS) system, used in the treatment of tremors. It is the first device which allows doctors to customize treatment for patients with essential tremor (ET) and its rechargeable battery can last up to 25 years. [4]

– We currently have a stock price estimate of $13.10 for Boston Scientific, approximately 5% ahead of its current market price.

– Boston Scientific’s stock price dropped by about 2% over the past week.

– We currently estimate Boston Scientific to post revenues of $7.5 billion and earnings of $0.79 per share in 2014, roughly in line with its consensus earnings of $0.82 per share.

See our complete analysis of Boston Scientific here

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Notes:
  1. Press Release, Medtronic, Sept 17 2014 []
  2. Press release, Medtronic, Sept 15 2014 []
  3. Press Release,Boston Scientific, Sept 15 2014 []
  4. Press Release,Boston Scientific, Sept 17 2014 []