Medtronic ([stock]MDT[/stock]) has strengthened its diabetes portfolio with the launch of Enlite Sensor in more than 35 countries outside the US. The product is an advanced glucose sensor for continuous glucose monitoring (CGM) and help type I diabetic patients to predict and detect hypoglycemia (low blood sugar).
The Enlite Sensor can be used with MiniMed Paradigm Real-Time system, MiniMed Paradigm Veo system, Guardian Real-Time CGM system, and the iPro2. Medtronic is working with the US Food and Drug Administration for approval of the Enlite Sensor in the US.
Results from the STAR 3 trial revealed that patients with diabetes could monitor glucose level better when sensors are integrated with insulin pump therapy. Recent studies also suggest that patients can achieve better glucose control without increasing hypoglycemia by using the CGM system more often. In this scenario, the Enlite Sensor should witness greater acceptance as its improved design makes it more comfortable and increases its ease of use.
A statement issued by the American Association of Clinical Endocrinologists (AACE) in 2010 favors the use of CGM technology in improving the life of diabetic patients. Moreover, it also recommends CGM particularly for children, adolescents and adults with frequent hypoglycemia or hypoglycemia unawareness, higher A1C levels and large variability in glycemic levels.
Medtronic is one of the leading players in integrated diabetes management solutions including insulin-pump therapy, CGM systems, and therapy management software. However, the market is competitive with players such as Abbott Laboratories ([stock]DXCM[/stock]). This segment contributes about 8% to the company’s total sales. In the third quarter of fiscal 2011, revenues from this segment increased 10% year over year to $ 341 million driven by strong sales of CGM products and double-digit growth in global insulin pumps. Both its Veo and Revel pumps continued to perform well.
Recommendation
For the past several quarters, Medtronic has been recording declining sales from its largest segment – Cardiac Rhythm Disease Management (CRDM) due to pricing pressure and retardation in market growth. Moreover, its Spinal segment is also witnessing various challenges. In this respect, the company is concentrating on other segments such as Diabetes and Surgical Technologies to improve its top line.
We are currently ‘Neutral’ on the stock.
ABBOTT LABS (ABT): Free Stock Analysis Report
DEXCOM INC (DXCM): Free Stock Analysis Report
MEDTRONIC (MDT): Free Stock Analysis Report
Zacks Investment Research
Be the first to comment