Medtronic Endurant II/IIs Stent Graft System Wins CE Mark

Medtronic plc (NYSE:MDT) , a leading player in the medical device and technology space, recently won CE mark for its Endurant II/IIs stent graft system to treat abdominal aortic aneurysm (AAA) patients through a ChEVAR procedure. ChEVAR is a parallel graft chimney method that uses commercially available balloon expandable covered stents combined with a standard aortic stent graft.

This development is expected to boost Medtronic’saortic and peripheral vascular (APV) group business, particularly in Europe.

Medtronic has been doing quite well in the last six months, outperforming the Zacks categorized Medical Products industry trend with respect to share price. However, the trend was disturbed by the company’s mixed second-quarter fiscal 2017 results. Since the release, the stock has lost 14.0%, much wider than the Medical Products industry’s decline of 8.2%. Additionally, the company’s estimates for the full year reflect an unfavorable trend. There have been 18 downward revisions with no upward revision for the last one month. Similarly, for the same period, current year estimates have slipped by 8 cents to $4.57. The narrowed outlook for fiscal 2017 also adds to the concerns.

On a positive note, Medtronic recorded a CAGR of 15.5% over the last five years for revenues, reflecting strong fundamentals. We believe Medtronic’s initiatives like product launches and regulatory approvals may boost the share price in the near future.

We note that the Endurant II/IIs stent graft system is based on Medtronic`s leading Endurant stent graft system under the APV group. The graft system is used for almost one of every two endovascular AAA repairs globally and has resulted in more than 250,000 successful implants. The original version of Endurant system received the CE Mark in Jun 2008.

AAA is a localized enlargement of the abdominal aorta which may result in pain in the abdomen or back, low blood pressure, or unconsciousness, and often death. It has been a challenge for clinicians to treat aneurysm patients with short aortic necks by performing endovascular aneurysm repair (EVAR).

The CE mark has been granted based on the flagship PROTAGORAS study where outcomes were tracked with radiologic follow up over an average of two years. The study used a standardized procedural approach with the Endurant system and balloon expandable covered stents. The results demonstrated that standardized use of the Endurant II/IIs stent graft system with ChEVAR in 128 patients led to 100% technical success.

As per ReportsnReports.com, the global aortic stent grafts market is expected reach a worth of $1.9 billion, growing at a CAGR of 6.7% by 2020. This opens up considerable scope for Medtronic in the growing market.

In the recently concluded quarterly release, Medtronic’s APV segment recorded an improvement of 5% year over year. The upside was fuelled by the recent positive findings for its Heli-FX EndoAnchor system. The system improves outcome and durability in patients with complex aortic abdominal aneurysm (AAA) anatomy, especially those with hostile aortic neck anatomy. The CE mark for the new version of stent graft system should strengthen Medtronic’s APV division significantly.

Zacks Rank & Key Picks

Medtronic currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the medical sector are NxStage Medical Inc. (NASDAQ:NXTM) , Baxter International Inc. (NYSE:BAX) and Bovie Medical Corporation (NYSE:BVX) . NxStage Medical and Baxter International sport a Zacks Rank #1 (Strong Buy) while Bovie Medical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NxStage Medical surged 27.3% over the last one year compared to the S&P 500’s 7.2% over the same period. The company has a four-quarter average positive earnings surprise of 50.00%.

Baxter International rallied 18.3% over one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.

Bovie Medical recorded a 124.3% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.

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