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Leading medical devices player, Medtronic (MDT - Analyst Report) recently announced the online availability of encouraging data from a randomized study called Symplicity HTN-2.

Symplicity HTN-2 evaluated the Symplicity renal denervation system. Results showed that no adverse events or device-related complications were observed in the patients after one year. Rather, patients under observation sustained a significant decline in blood pressure compared to baseline at 12 months. The data demonstrates that Medtronic’s Symplicity renal denervation system provides superior and sustained blood pressure reduction in patients with treatment-resistant hypertension.  

The Symplicity system was cleared in Canada by the Therapeutic Products Directorate in the fourth quarter of fiscal 2012. While the Symplicity system has received both CE Mark and Australia’s Therapeutic Goods Administration listing, it is yet to receive approval in the U.S. Medtronic expects the U.S. launch of the system for treatment-resistant hypertension in fiscal 2015. Medtronic’s peer in the renal denervation space St. Jude Medical (STJ - Analyst Report), which manufactures the EnligHTN system, is yet to obtain U.S. Food and Drug Administration clearance.

Hypertension is a primary risk factor for cardiovascular events such as stroke, heart attack or heart failure. Even with optimal drug therapy, 30% of the patients remain in conditions of uncontrolled hypertension. Treatment-resistant hypertension affects approximately 120 million globally and approximately 300 million patients would need some sort of additional therapy by 2020.

Accordingly, this indication alone holds a $2−$2.5 billion market opportunity by 2020, excluding the other potential applications of renal denervation. With a largely underpenetrated market, the expected launch of Symplicity system in the U.S. is an opportunity to drive growth. Also worth mentioning in this context is Medtronic’s ongoing clinical trial for the Symplicity system in Japan.

Approval in two of the largest markets for medical devices will enable Medtronic to garner sizeable revenues for its Cardiac and Vascular franchise. This should have a profound impact on the company’s growth trajectory in the long-term.   

We currently have a ‘Neutral’ recommendation on the stock which carries a short-term Zacks #3 Rank (Hold). Its peers in the neuromodulation space Urologix and Allergan (AGN - Analyst Report) carry a Zacks #2 Rank (Buy).

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