GIVN Given Imaging Ltd. - Ordinary Shares (MM)

Medical Device major – Medtronic (MDT) recently won European CE Mark approval for its portfolio of Attain Performa Quadripolar leads. Following the approval, European launch of the same has been made. Medtronic remains optimistic about this new set of leads as, according to the company, these are perfectly compatible with the company’s newest portfolio of devices, Viva/Brava Quad cardiac resynchronization therapy defibrillators (CRT-D), which significantly improves response rate to therapy of the heart failure patients.

As stated by Medtronic, combined with Viva Quad CRT-Ds, Attain Performa leads can provide added features leading to the possibility of therapy optimization based on the individual needs of heart failure patients. In contrast to the unipolar and bipolar leads, these leads consist of 4 electrodes with 16 pacing configurations. Moreover, 3 distinct lead shapes are found in this category of leads, which are Dual Cant, S-Shape and Straight.

The Attain Performa Quadripolar Lead study is a worldwide clinical trial based on data on Attain Performa leads in patients indicated for a CRT-D.  Enrollment for this single-arm trial has begun across 140 centers globally. These centers will enroll up to 1,210 patients who will receive Attain Performa leads.  Enrollments have already occurred in Australia, Europe, South America and the U.S.

We are impressed with the company’s efforts to augment/diversify its product range. We are optimistic that over the long term, stability in the US implantable cardioverter-defibrillator(ICD) market along with a deep pipeline/portfolio that includes – CoreValve, Resolute Integrity, Atrial Fibrillation (AF), renal denervation and peripheral businesses – will be the driving factors for the company going ahead.

However, we are still concerned about Medtronic’s Pacing and Spine business, which continued to remain sluggish, in turn affecting the company’s overall performance. Moreover, headwinds such as unfavorable currency movement and global economic uncertainties remain. However, the company is enjoying market share gain on the back of the Resolute Integrity DES for the treatment of coronary artery disease.

Moreover, the company is gradually showing some signs of stability in the US Core Spine business. Medtronic is trying every means to revive growth. This includes penetrating the international markets, expansion of portfolio and restructuring initiatives, which should benefit the company over the long term.

Estimate revision trend for Medtronic’s ongoing and next fiscal reflects a glaring lack of clarity. Accordingly, the stock carries a Zacks Rank #3 (Hold). While we have a non-committal stance on Medtronic, other medical stocks carrying a favorable Zacks Rank are Cyberonics (CYBX), Given Imaging (GIVN) and Medical Action (MDCI). These stocks carry a Zacks Rank #1 (Strong Buy).

 
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