Medtronic Notes: Launch of New Products In Focus

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Medtronic (NYSE:MDT) continues to bring new medical innovations to the table as it received FDA clearance for several of its products recently. These include the Arctic Front Advance ST CryoAblation catheter, Zevo Anterior Cervical Plate system and the Euphora semicompliant balloon dilatation catheter. Below, we discuss these products in brief.

  • Trefis has a $70 price estimate for Medtronic, which is slightly below the market price.
  • We estimate the company’s FY 2015 revenues to be around $18.6 billion and earnings per share of $4.23, compared to a Reuters-compiled consensus estimate of $4.22.

See our full analysis for Medtronic

Arctic Front Advance ST CryoAblation Catheter

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Medtronic recently received FDA clearance for its Arctic Front Advance ST CryoAblation catheter in the U.S., and has also received the CE (Conformité Européenne) mark in Europe. This catheter will be used for the treatment of patients with drug refractory, recurrent and symptomatic paroxysmal atrial fibrillation. When compared to the older version of the CryoAblation catheter, the Arctic Front Advance System is equipped with a tip that is 40% shorter and has improved maneuverability for accessing some pulmonary vein anatomies. [1]

This product is a part of Medtronic’s largest division – Cardiac Rhythm Disease Management (CRDM) – which accounts for over 30% of total sales. This division primarily consists of defibrillators and pacemakers. In the last quarter, operational sales in the division grew by 12% year over year to $1.27 billion backed by robust domestic sales of Pacemakers and Atrial Fibrillation (AF) devices, and strong international performance of the implantable cardioverter defibrillator business. AF division sales grew about 50% on a constant currency basis on account of solid demand for the Arctic Front CryoAblation system. The new version of the catheter is likely to further accelerate growth within this division going forward.

Zevo Anterior Cervical Plate System

Last week, the company received FDA clearance for its Zevo Anterior Cervical Plate system that will be used for anterior cervical discectomy with fusion (ACDF) procedures. This system will aid in treating cervical degenerative disc disease, trauma, tumors, deformity, pseudarthrosis, and unsuccessful previous fusion. The approval comes shortly after the company launched the Divergence™ Anterior Cervical Fusion System for the treatment of single-level cervical disc disease in October last year. [2]

The Zevo system comprises of shorter plating options combined with hyper-screw angulations, which allows the physician to select the smallest possible plate for the patient and place it as far as possible from the adjacent disc. This avoids incidences of Adjacent Level Ossification Development (ALOD) or bone growth in the treated area.

Currently, the company’s Spinal division represents around 17% of the total valuation of the company, according to our estimates. In 2014, this division generated around $3 billion in revenues. The United States is currently the world’s leader in the spinal fusion market with around 150,000 ACDF procedures performed annually. [3] [4]

Euphora Semicompliant Balloon Dilatation Catheter

Medtronic also launched the Euphora Semicompliant Balloon Dilatation catheter in the U.S. recently, following FDA clearance of the device. This product received the CE Mark in December 2014 and is available for sale in Europe as well. It uses pre-dilatation during stent implantation to reopen a narrowed coronary artery that has been infected. The launch of this product in Europe and the U.S. is likely to help expand Medtronic’s sales and market share in the global Cardiovascular market. [5]

Medtronic’s Cardiovascular division, consisting of the Coronary, Structural Heart and Endovascular businesses, offers products such as stents, heart valves and renal denervation systems for treating hypertension. The division reported a 2.7% year over year growth in sales to $3.5 billion in sales, in 2014. It contributes over 20% of Medtronic’s total value, according to our estimates.

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Notes:
  1. Medtronic Receives FDA Approval and CE Mark for Arctic Front Advance® ST Cryoballoon to Treat Atrial Fibrillation, Press Release []
  2. Medtronic Receives FDA Clearance for ZEVO(TM) Anterior Cervical Plate System, Press Release []
  3. Comparison of Inpatient vs. Outpatient Anterior Cervical Discectomy and Fusion: A Retrospective Case Series, Medscape []
  4. Spine device market report: 5 key concepts for future growth, Becker’s Spine []
  5. Medtronic Announces FDA Clearance and U.S. Launch of the Euphora(TM) Semicompliant Coronary Balloon, Press Release []