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Medtronic Initiates Study on DES for Expanded Use in the US


Medtronic plc MDT recently announced the initiation of a clinical study — The Bifurcation Cohort — to evaluate the efficiency and safety standards of drug-eluting stents (DES) for treating bifurcation lesions.

Study in Details

The Bifurcation Cohort, part of the RESOLUTE ONYX Post-Approval Study, will cover 250 patients with bifurcation lesions from 30 sites in the United States and Europe. It will be enrolling patients suffering with coronary artery disease (CAD) and receiving Resolute Onyx DES in diameter sizes varying from 2.0-5.0 mm. Notably, the Resolute Onyx DES is not approved for treating bifurcation lesions in the United States. Further, the primary endpoint for the study will be target vessel failure at 12 months.

Per Medtronic, data from the study will be submitted to the FDA for expanded indication approval including bifurcation lesions for the Resolute Onyx DES. Further, the company stated that bifurcation lesions are responsible for 20% of all percutaneous coronary interventions. Thus, we believe the positive data will provide impetus to the company’s efforts to achieve expanded FDA approval for the Resolute Onyx DES and accelerate business growth.

CSH Performance

Medtronic is consistently trying to enhance its Coronary & Structural Heart (CSH) segment, which is part of the Cardiac & Vascular Group (CVG) segment.

CSH revenues in third-quarter fiscal 2018 were up 14% at CER (18% as reported) on low-30s 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.

Moreover, continued uptake of the Resolute Onyx drug-eluting stent in the United States and Japan revived the business.

We encouragingly note that Medtronic recently received FDA nod for the U.S. launch of the Resolute Onyx 2.0 mm drug-eluting stent. The stent is the smallest in size in the market presently. The Resolute Onyx DES is available for use in all sizes in the United States, Europe and in countries that recognize the CE Mark.

Market Potential

Medtronic’s strategy to gain traction in the CSH segment seems to be aligned with data provided by Transparency Market Research. Per the report, the global coronary stent market is expected to see a CAGR of 6.6% from 2013 to 2019.

More specifically, the DES market within the Coronary stents market is expanding fast. It is estimated to witness a CAGR of 9.54% in the 2013-2019 period. The market is likely to expand 9% in the United States, 10% in the Asia Pacific, and 3.1% in Europe as well as the Rest of the World.

Stock Performance

Over the past three months, Medtronic has outperformed the industry, gaining 2.7% as compared with the industry’s 1.8%.

Zacks Rank & Key Picks

Medtronic currently carries a Zacks Rank # 3 (Hold).

A few better-ranked stocks in the broader medical sector are Intuitive Surgical ISRG, Illumina, Inc ILMN and The Cooper Companies, Inc. COO. While Intuitive Surgical and Illumina sport a Zacks Rank #1 (Strong Buy), Cooper Companies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuitive Surgical has a long-term expected earnings growth rate of 12.1%.

Illumina has a long-term expected earnings growth rate of 20%.

Cooper Companies has a long-term expected earnings growth rate of 10.8%.

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