Last week, leading medical devices player, Medtronic ( MDT - Analyst Report ) announced that the US Food and Drug Administration (“FDA”) has selected one of its stent grafts for a pilot program. The Valiant Mona LSA system, one of the nine products selected for the early feasibility program, is a stent graft designed to repair a descending thoracic aortic aneurysm (“TAA”) encroaching on the left subclavian artery.

The FDA to encourage and facilitate early feasibility studies of innovative medical devices in the US had published a guidance document in 2011. We are encouraged with the agency choosing Medtronic’s device for the pilot program.

A thoracic aortic aneurysm (TAA) is a swelling in the body’s main artery near where it originates from the heart. If left untreated, a TAA can burst, leading to a situation where extensive internal bleeding usually leads to death. A thoracic stent graft, delivered through a pre-loaded catheter inserted in the patient’s femoral artery, conforms to the wall of the aorta creating a new path for blood flow that reduces pressure on the aneurysm and the risk of rupture.

Medtronic’s Valiant Captivia Stent Graft is approved by the FDA for endovascular repair of aneurysms. The device selected for the pilot program is based on the Valiant Captivia Thoracic Stent Graft technology.

During the most recent quarter, revenues from the company’s Endovascular & Peripheral segment recorded a robust 10% growth. This was due to the worldwide success of the Endurant abdominal stent graft, including Japan where it was recently launched. While Endurant II is performing well in Europe (CE Mark approved December 2011), its recent launch in the US should enable the company to garner additional revenues in the quarters ahead.

Acknowledging the challenges at play in its core segments, Medtronic is in the process of launching several new products that are likely to drive growth in this difficult scenario. Many of the recently launched products are contributing significantly to the top line. Besides, the company is increasing its focus on the emerging markets. Such a strategy is also being followed by its peers Boston Scientific ( BSX - Analyst Report ) and St Jude Medical ( STJ - Analyst Report ) .

We have a Neutral recommendation on Medtronic. The stock retains a Zacks #3 Rank (hold) in the short term.