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Medtronic’s Positive Study Results May Boost CSH Business


Medtronic plc MDT recently presented encouraging outcome from the U.S. Pivotal Extreme Risk Study and the real-world NOTION trial (Nordic Aortic Valve Intervention Trial) on the CoreValve TAVR system. The data was presented at the American College of Cardiology’s ("ACC") 67th Annual Scientific Session.

This development remains part of the company’s consistent effort to strengthen its position in the high-potential transcatheter aortic valve replacement ("TAVR") market which is projected to reach around $6.5 billion by 2022 (data by Cision).

Study Results in Detail

The NOTION trial enrolled around 280 patients, aging at least 70 years, and was subjected to surgical aortic valve replacement ("SAVR") or TAVR with the CoreValve System. Notably, the studies evaluated patients at five years post-implant with the CoreValve TAVR system.

The results demonstrated patients to experience an enhanced quality of lifealong with strong hemodynamic performance within five years. We believe, these results may boost the uptake of the CoreValve TAVR system.

Developments in CoreValve TAVR Platform

The CoreValve Evolut platform comprises CoreValve, CoreValve Evolut R and the CoreValve Evolut PRO system. Notably, in July 2017, Medtronic received FDA approval for the extended use of its self-expanding CoreValve Evolut TAVR system. With this approval, patients with symptomatic severe aortic stenosis and at an intermediate risk for open-heart surgery became eligible for treatment using the technology. Again, in March, CoreValve Evolut PRO system received FDA approval to be used on symptomatic patients who are at high or extreme risks for open heart surgery.

Continuing with the slew of developments, last September, Medtronic announced initiating a post-market FORWARD PRO Clinical Study to measure the performance of CoreValve Evolut PRO transcatheter aortic valve implantation ("TAVI") system in regular clinical treatments.

Thus, we believe, a clinical study data displaying the efficiency of the product will help the company gain traction in the Coronary & Structural Heart ("CSH") space.

Interestingly, Medtronic’s CSH third-quarter fiscal 2018 revenues were up 18% (14% at constant exchange rate) to $886 million on the back of low constant currency growth in transcatheter aortic valves, as a result of strong customer uptake of the CoreValve Evolut PRO platform and expanded FDA approval, to include patients at intermediate risk.

Market Prospects

Per a report by Medgadget, the global heart valve repair and replacement market is expected to grow from $2,281.2 million in 2014 to $3,767.0 million in 2020, at a CAGR of 8.7%.

We believe that unhealthy lifestyle and a rise in ageing population will continue to result in a high incidence of cardiovascular diseases. This is further supported by data provided by GBI Research. Per the report, the global cardiovascular diseases market will see a CAGR of 4.1% by 2019, and within this space, the U.S. market is expected to witness the highest momentum at a CAGR of 4.7%. Thus, the release of positive study data will help Medtronic cash in the abundant opportunities in the pancreatic cancer therapeutics market.

Share Price Movement

Over the past six months, the company’s share price has underperformed the broader industry. The stock has gained 1.7% in comparison with the broader industry’s 8.8% gain. We believe that the latest development will help the stock rebound.

Zacks Rank & Key Picks

Medtronic carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical sector are Bio-Rad Laboratories BIO, athenahealth, Inc. ATHN and PerkinElmer PKI.

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).

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