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Medtronic's Expanded IN.PACT Admiral FDA Nod to Aid APV Arm

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Medtronic plc (MDT - Free Report) has made another encouraging move with respect to its Aortic & Peripheral Vascular (APV) business. The company recently announced the receipt of FDA approval for 200mm and 250mm lengths of the IN.PACT Admiral Drug-Coated Balloon (DCB) for treating long superficial femoral artery (SFA) lesions in patients with peripheral artery disease (PAD).

Per the company, in April, Medtronic received approval to treat SFA lesions of up to 360mm in length, on the back of supporting clinical data from the complex lesion imaging cohorts of the IN.PACT Global Study, also covering long lesion, in-stent restenosis and chronic total occlusion groups with lesion lengths >180mm.

We note that the IN.PACT Admiral DCB received FDA approval in December 2014, to treat superficial femoral and popliteal arteries. Moreover, it is commercially available in Europe since its receipt of the CE mark approval in 2009. So far, more than 200,000 PAD patients in Europe have been treated with the device.

A Glimpse of APV Business

Interestingly, Medtronic’s revenues from the APV division improved 8.8% year over year (up 4.8% at constant exchange rate) in fourth-quarter fiscal 2018. Moreover, the Peripheral Vascular business grew on a low-single digit. The latest development should boost the company’s performance in this segment.

Market Prospects

Medtronic’s strategy, to gain traction in the peripheral vascular sub-segment, seems to be aligned with data provided by MarketsAndMarkets. Per the report, the interventional cardiology & peripheral vascular devices market is expected to see a CAGR of 7.1% to reach a value of $31.47 billion from 2016 to 2021.

We believe, the high incidence of peripheral artery disease due to unhealthy lifestyle and aging population, penetration by the companies in the untapped markets, rising need for minimally-invasive angioplasty procedures, technological advancements and increasing awareness among people will continue driving global acceptance for this technology. In view of these encouraging factors, we believe that the company’s development regarding IN.PACT Admiral DCB is strategic and it is expected to broaden its customer base.

Share Price Performance

However, over the past month, Medtronic has been underperforming the broader industry. The stock has gained 1.7% in comparison with the industry’s 2.1% increase. Nevertheless, we believe, the latest FDA approval will boost investor confidence in the stock.

 

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 - Free Report) , Illumina, Inc (ILMN - Free Report) and Amedisys, Inc. (AMED - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

Illumina expects long-term earnings growth of 19.3%.

Amedisys has an expected long-term earnings growth rate of 18.6%.

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