CHICAGO, June 23, 2011 /PRNewswire/ -- Today, Zacks Equity
Research discusses the Medical Devices industry, including:
Medtronic Inc. (NYSE: MDT), Boston Scientific
Corporation (NYSE: BSX) and St. Jude Medical (NYSE:
STJ).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
A synopsis of today's Industry Outlook is presented below. The
full article can be read at
http://www.zacks.com/stock/news/55667/Medical+Devices+Stock+Outlook+-+June+2011
With a slew of new products, the Big Three players --
Medtronic Inc. (NYSE: MDT), Boston Scientific
Corporation (NYSE: BSX) and St. Jude Medical (NYSE: STJ)
-- in the $6.5 billion implantable
cardioverter defibrillator ("ICD") market are well positioned to
gain market share, despite the challenging business environment and
several other barriers to growth. These companies represent a good
bet for long-term investors.
Among the names above, Medtronic, the undisputed leader in the
MedTech space, has a diversified presence in cardiovascular, neuro,
spinal, diabetes and ENT and boasts an attractive pipeline.
Although the company witnessed slower market growth of ICD in the
U.S. in the most recent quarter, new products should gradually
contribute to growth and help it maintain/gain ICD share.
The long-awaited issue of the FDA warning letters, relating to
Medtronic's Mounds View facility and manufacturing unit in
Puerto Rico, was finally resolved
in March 2011, paving the way for the
U.S. approval and launch of new products including the
much-anticipated Protecta ICD device.
We believe that the recently approved REVO MRI SureScan
pacemaker and Arctic Front catheter should provide some support to
Medtronic's CRM business. REVO is already gaining positive initial
market acceptance and is expected to be key growth drivers going
ahead. The company's struggling spinal franchise should also
benefit gradually from the recent product launches.
Moreover, Medtronic plans to adopt restructuring initiatives
(including workforce reduction) to sustain long-term growth. The
company is also blessed with strong cash flows which it prudently
uses for maximizing shareholder value. Medtronic is active on the
acquisition front and is investing in emerging markets, which it
considers an increasingly important growth driver.
Boston Scientific has maintained its leadership position in the
drug eluting stent ("DES") market with 46% share in the U.S.
market. The launch of Taxus Element stent (commercialized as Ion)
in the U.S. in April 2011 strongly
places the company to gain DES share. Moreover, its pipeline DES
product Promus Element (expected launch in the U.S. in mid-2012) is
shaping up to be a major driver of its stent business. Besides, the
acquisition of asthma-treatment company Asthmatx has enabled Boston
Scientific to target the pulmonary devices area.
Boston Scientific has undertaken a series of management changes
and restructuring initiatives that are expected to contribute to
the bottom line moving forward. The company plans to expand its
footprint in the emerging markets by reinvesting the savings from
restructuring efforts. In this context, we reckon the company's
divestiture of its Neurovascular business as a smart move, enabling
it to prepay a portion of the debt and invest in high growth
markets.
We remain intrigued by St. Jude's ability to consistently
produce positive earnings surprises and revenue growth. The company
is poised for incremental opportunities in CRM on the back of
strong product momentum. St. Jude's Fortify and Unify lines of ICDs
are already gaining notable traction. Moreover, launch of several
products (including the quadripolar CRT systems) should boost the
company's CRM market share in 2011.
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