Medtronic’s Two Year Study Reveals Positive Results For Its CoreValve System
Medtronic‘s (NYSE: MDT) CoreValve transcatheter aortic valve replacement (TAVR) system continued to report positive data at two years for high-risk patients. The study shows the efficacy of TAVR for high-risk patients over surgical aortic valve replacements (SAVR). TAVR therapy is used to replace impaired heart valves in patients who are too weak for traditional open-heart surgery.
The clinical trial randomized 795 patients between SAVR and TAVR with the CoreValve System across 45 locations in the U.S. The study reported consistent results with the one-year data with an all-cause mortality rate of 22.2% in TAVR patients compared to 28.6% in SAVR patients. Last June, the FDA approved the CoreValve system to be used on extreme and high risk patients. The CoreValve system has been in the international market since 2007, when it received CE approval. We expect the recent two-year study results to boost sales of Medtronic’s CoreValve device in the U.S. and improve its market share. ((Medtronic CoreValve® System Sustains Superior Survival Benefit Over Open Heart Surgery at Two Years, Medtronic))
We currently have a $69 price estimate for Medtronic, implying a slight discount to the current market price.
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CoreValve U.S. Pivotal Trial Results
Medtronic presented the two-year results of its CoreValve U.S. pivotal trial for high-risk patients at the 64th Annual Scientific Session of the American College of Cardiology. As mentioned above, the two-year results were consistent with the one-year trial data of the CoreValve system, with all-cause mortality at 22.2% and major stroke chances at 6.8%. The results were also consistent in other performance parameters such as hemodynamics, the study of blood flow.
The study continued to report low levels of paravalvular leaks (PVL) at 6.5% for moderate and severe patients. This figure was consistent with the rates reported at one year, which was 6.4%. A paravalvular leak is the leakage of blood through the implanted valve in the cardiac tissue. This can be caused by inaccurate implantation.
Market for TAVR
The CoreValve system, which is a part of the Structural Heart business, falls under Medtronic’s Cardiovascular division. Since the CoreValve received the CE mark, the device has been implanted in more than 75,000 patients around the world. It is estimated that there are about 100,000 severe aortic stenosis patients in the U.S. alone.
The primary competitor for Medtronic’s CoreValve is Edwards Lifesciences’ Sapien Valve device. According to data by Jefferies, the global market for transcatheter aortic valves was $1.5 billion in 2014. Edwards’ share of the total market was about 65%, whereas Medtronic accounted for about 31% of the global market that amounts to around $341 million. This is expected to increase as the CoreValve continues to show efficacy relative to SAVR. CoreValve reported $131 million in transcatheter valve revenues in the last quarter, a 60% year-over-year increase. The strong performance of this device improved the sales of Medtronic’s structural heart business by 22% in the same quarter.
Cost-Effectiveness of the CoreValve
A TAVR device could cost as much as $30,000, while the cost of SAVR can range from $4000-$7000. [1] Even though TAVR is a more expensive procedure than SAVR, Medtronic’s cost effectiveness study in September 2014 based on one-year data revealed that TAVR therapy can actually be more cost-effective. This was based on a number of parameters including length of stay, ICU time, patients recommended for rehab services at discharge and Quality of Life. [2] There is no updated data for the two year study yet. We expect the two-year cost-effectiveness study to be largely consistent with the one-year results. We will be looking out for any developments in this regard. [3]
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Notes:
- FDA Approves Medtronic’s CoreValve Heart Device, The Wall Street Journal [↩]
- Cost Effectiveness-Press Release, Medtronic, Sept 13 2014 [↩]
- Medtronic CoreValve Data Demonstrate Favorable Cost Effectiveness Compared to Open-Heart Surgery in High Risk Patients, Market Watch [↩]