STJ ST. Jude Medical, Inc.

Results of  two major clinical studies of Medtronic (MDT) presented at the annual conference of American College of Cardiology, proved Resolute drug-eluting stent (DES) to be a significant breakthrough in treating patients with coronary artery disease. Based on the success story, management remains highly confident about Medtronic’s stent business going ahead.

The company presented data from one-year RESOLUTE US and two-year RESOLUTE All Comers trials. The studies were based on more than 5000 patients’ data worldwide. As a single-arm study, the RESOLUTE US ensured high level of safety and efficiency of the Resolute DES in US patient population and the All Comers study as the first randomized controlled trial showed that the success rate of the Resolute DES matches with that of the Xience V DES.

Additionally these data will also help meet the requirements of the US Food and Drug Administration (FDA) for the pre-market approval of Medtronic’s Resolute DES which is expected by mid 2012.

Medtronic reported a 7% year-over-year increase in CardioVascular segment’s sales during the third quarter of fiscal 2011 driven by the robust international performance of all its businesses, particularly in emerging markets where revenues increased by 30%. Out of Medtronic’s total CardioVascular segment’s sales, 24% of revenue was derived from DES business.

Medtronic has taken several strategic initiatives to maintain its leadership position in the fiercely competitive medical devices industry as it battles for capturing a considerable DES market from other major player such as Boston Scientific (BSX) with its Promus DES and St. Jude Medical (STJ).

Given the huge potential in the cardiovascular segment’s DES therapy market, Medtronic has been reallocating resources for developing new therapies to drive growth. Along with world’s leading clinicians, researchers and scientists Medtronic is presently focusing on presenting wide range of improved medical technology for the interventional treatment of cardiovascular disease and cardiac arrhythmias.

Medtronic is currently targeting the under-penetrated emerging economies. Moreover, its restructuring initiatives should help it sustain long-term growth. We are currently Neutral on Medtronic which corresponds to a Zacks #3 Rank (Hold).

 
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