Promising Therapy From Medtronic - Analyst Blog
August 16 2011 - 1:38PM
Zacks
Leading medical devices player,
Medtronic (MDT) recently announced positive data
for its InterStim therapy. It was observed that the therapy could
improve the quality of life in a majority of patients after three
years of follow -up. Earlier, in April 2011, the company had
received approval from the US Food and Drug Administration (FDA)
for its InterStim therapy for bowel control. The therapy was also
prescribed for treating overactive bladder and non-obstructive
urinary retention.
The three-year follow-up data on
120 patients was published in the September issue of “Diseases
of the Colon and Rectum”. The analysis was carried out to
check the safety and effectiveness of the InterStim therapy. Among
the 77 patients who completed all the three follow-up assessments,
86% witnessed a 50% reduction in the number of incontinent episodes
per week compared to baseline. Moreover, patients experienced
significant improvements in overall quality of life at 12, 24 and
36 months of follow-up.
In the third quarter of fiscal
2011, this segment generated $432 million in sales, up 5% (4% at
CER) from the year-ago period. Following the FDA approval of
InterStim therapy for bowel control, the company is working on
securing reimbursement as it plans to expedite its launch in fiscal
2012.
Fiscal 2011 has been one of the
most challenging years for Medtronic precipitated by the
macroeconomic downturn and decreased utilization. According to the
company’s estimates, its markets are currently growing in the
low-single digits versus 6−7% in the previous year. Although the
situation is improving gradually, the two biggest segments at
Medtronic – CRDM and Spinal continue to remain under pressure. As a
result, the company is focused on developing new technologies to
make up for lost sales.
Over the past few years, Medtronic
has been reallocating resources towards new therapies and emerging
markets to drive growth. Meaningful acquisitions include Ardian,
Invatec, Osteotech and ATS Medical. Following the launch of
Protecta and Revo MRI in the US, pricing and market share are
expected to improve. However, the company faces tough competition
from players like St Jude Medical (STJ) and
Boston Scientific Corporation (BSX).
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