Leading medical devices player Medtronic (MDT) presented positive results for Valiant thoracic stent graft system after one-year patient follow-up in the US pivotal study, VALOR II, involving 160 patients. The data was presented at the annual meeting of the Society for Vascular Surgery.
It was observed that Valiant stent graft is a safe and effective treatment for patients with descending thoracic aortic aneurysm (TAA) of degenerative etiology. TAA entails dangerous swelling in the body’s main artery, which if ruptures usually results in death.
As per estimates, about 60,000 people in the US suffer from TAA. Treatment with stent graft or invasive surgery is possible if the condition is detected early. According to the principal investigator, Dr. Ronald Fairman, during the 12-month study period, there were no cases of rupture or conversion to open surgery.
Medtronic’s CardioVascular revenues during the fourth quarter of fiscal 2011 were $879 million, up 16% year over year driven by growth at Coronary & Peripheral (up 15% at $440 million), Structural Heart (up 15% at $274 million) and Endovascular (21% at $165 million). Revenue growth was driven by strong international performance (15% growth), particularly in emerging markets.
During the reported quarter, in Europe, Medtronic gained 700 bps and 600 bps of share in the abdominal and thoracic markets, respectively (on a sequential basis) based on the continued strength of the Endurant abdominal and Valiant Captivia thoracic stent grafts.
During fiscal 2012, the company plans to combine its peripheral vascular business with endovascular to take advantage of customer synergies, and expect the combined business to generate approximately $750 million in revenues.
Although the two largest segments of Medtronic – CRDM and Spinal continue to witness several challenges, the CardioVascular segment has been recording robust growth. Meanwhile, the company is directing its attention towards emerging markets and emerging therapies with an expectation that these will turn up to be major growth drivers going ahead.
Acquisitions should enable the company to record higher revenues in the forthcoming period. However, pricing pressure continues to be a major concern. The company also operates in a highly competitive environment with the presence of players such as Boston Scientific Corporation (BSX) and Johnson & Johnson (JNJ).
We are currently Neutral on the stock, which also corresponds to Zacks #3 Rank (Hold) in the short-term.
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