Medtronic (MDT) Expands In The U.S. With 2.0mm DES Launch

Medtronic plc (NYSE:MDT) announced the FDA nod and U.S. launch of the Resolute Onyx 2.0 mm Drug-Eluting Stent (DES). The new 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.

The stent has been exclusively designed to help interventional cardiologists treat patients with coronary artery disease (CAD). These patients have small vessels and are often untreatable with larger stent technologies during percutaneous coronary intervention (PCI).

Management believes the introduction of Resolute Onyx 2.0 mm DES enables doctors to broaden treatment options for patients with smaller vessels. Notably, the Resolute Onyx DES platform is the only DES to feature Core Wire Technology (an evolution of Continuous Sinusoid Technology).

It is also to be noted that the RESOLUTE ONYX 2.0 mm Clinical Study supports the Resolute Onyx 2.0 mm DES. This study was presented at the 2017 EuroPCR Annual Meeting and simultaneously published in the Journal of the American College of Cardiology (JACC): Cardiovascular Intervention.

Coronary & Structural Heart 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) to $886 million 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, the continued uptake of the Resolute Onyx drug-eluting stent in the United States and Japan revived the business.

Market Potential

Medtronic’s strategy to gain traction in the CSH sub-segment seems to be aligned with data provided by Transparency Market Research. Per the report, the global coronary stents 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 & Estimate Revision

Over the last three months, Medtronic has underperformed the industry, declining 0.1% as compared to the industry’s 3.8% gain over the last three months. It also underperformed the 5.8% gain of the S&P 500 market over the same time frame.

Also, the estimate revision trend for the current year remains unfavorable with nine estimates moving south over the last two months, compared to two movements in the opposite direction. Earnings estimates rose around 0.4% to $4.75 per share over the same time frame.

Zacks Rank & Key Picks

Medtronic carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical sector are PerkinElmer (NYSE:PKI) , Bio-Rad Laboratories (NYSE:BIO) and Becton, Dickinson and Company (NYSE:BDX) .

Bio-Rad Laboratories sports a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company has a long-term expected earnings growth rate of 25%.

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

Becton, Dickinson and Company is a Zacks #2 Ranked player. The company has a long-term expected earnings growth rate of 13.3%.

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