Medtronic’s New Product Launch Boosts Its Rather Sluggish Spinal Division

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Medtronic (NYSE:MDT) is resorting to all possible means to boost growth. This includes the recently completed acquisition of Covidian,  increased penetration into emerging markets, expansion of product portfolio and restructuring of initiatives, all of which should benefit the company over the long term. The two key FDA approvals that the company has secured of late, for the CoreValveEvolut R and the Advisa SR MRI SureScan Pacing System, are encouraging. As planned, the combined company (Medtronic-Covedien) is currently focusing on the execution of its three growth strategies, namely therapy innovation, globalization and ramping economic value. As part of this, the company recently launched its novel CD Horizon Solera Voyager Spinal System designed to facilitate minimally invasive spine procedures in the global market. The product release marks yet another significant addition to Medtronic’s innovative Surgical Synergy Spinal Platform, intended to promote spinal healthcare. [1]

  • 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

According to the Markets and Markets research firm, the global spine surgery devices market is expected to grow at a CAGR of 5.1% from 2012 to reach $14.8 billion by 2017. We believe Medtronic will be able to capture a large share of this market potential, buoyed by the excellence of its recently launched VOYAGER Spinal System. 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. [2]

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With the CD Horizon Solera Voyager System, surgeons have the flexibility to use either a percutaneous or Wiltse minimally invasive approach for rod insertion depending upon their preference. The system also features a low-profile, extended-tab screw with inner threading, which eases rod insertion and facilitates rod reduction. In addition, the system is part of Medtronic’s Surgical Synergy Spinal Platform – the most integrated portfolio of navigated surgical technologies – which seeks to protect the operating room from interruptions and constraints, so as to give surgeons the freedom to focus wholly on their patients.

Medtronic’s Spinal business is the global leader in today’s spine market and is committed to advancing the treatment of spinal conditions. Medtronic’s Spinal business collaborates with world-renowned surgeons, researchers and innovative partners to offer state-of-the-art therapies for spinal, neurological, orthopaedic and oral maxillofacial conditions. Medtronic is committed to developing affordable, minimally invasive procedures that provide lifestyle friendly surgical therapies. Medtronic is known for its life-changing innovations and groundbreaking technologies. That legacy – along with the broad portfolio and collaborative partnerships – enables the company to truly make an impact on patient care.

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Notes:
  1. Medtronic (MDT) Launches Minimally Invasive Spinal System, Zacks, July 10th, 2015 []
  2. Spine device market report: 5 key concepts for future growth, September 22nd, 2014 []