Medtronic plc (MDT - Free Report) has presented positive data from an at-home pediatric study on patients aged between seven and 13 years. Notably, the data is based on MiniMed 670G system and was demonstrated at the Advanced Technologies & Treatments for Diabetes’ 11th International Conference in Vienna, Austria.
Study Results in Detail
The multi-center study had enrolled 105 participants within the 7-13 years’ age group. The trial consisted of a two-week run-in phase along with a study phase of three months. 97% of the participants chose to continue using the system as part of a Continued Access Program. Moreover, the study results demonstrated data from the pivotal trial of MiniMed 670G system on patients aged 14 years and above.
Using the study results, the company has applied for an expanded FDA approval to include the patients ranging from seven to 13 years as eligible for using the MiniMed 670G system. At the same time, the company is working to expand the usage of the product on children aged between two and six years. Hopes are harbored on the effectiveness of this system, which should get greater customer adoptability over time.
MiniMed 670G at a Glance
Post the receipt of the FDA approval in 2016, Medtronic had commercially launched the MiniMed 670G system in June 2017. It is a Hybrid Closed Loop insulin delivery system for Type I diabetic patients aged 14 years or older. The MiniMed 670G system features Medtronic’s latest Guardian Sensor 3, a glucose sensor with increased accuracy and enhanced performance. This is the only FDA approved sensor to control a hybrid closed loop system including diagnostic technology that continuously checks sensor health. The system also carries Medtronic’s most advanced algorithm known as, SmartGuard HCL technology.
Developments in Diabetes Business
Medtronic witnessed sluggish growth in Diabetes business last quarter. However, the company gained on a strong uptake of new sensor-augmented insulin pump systems in the United States as well as in the international markets. This growth was temporarily offset by a limited supply of continuous glucose monitor (CGM) sensors. Moreover, a strong customer enrollment under the Priority Access Program briefly affected revenues.
Per management, the diabetes business should witness revenue growth in the third quarter of fiscal 2018 as the company has finished shipping pumps for the Priority Access Program. Also, the company is moving steadily with its sensor capacity expansion plans, scheduled to be completed in fourth-quarter fiscal 2018.
Additionally, Medtronic geared up for the international launch of the MiniMed 670G and the U.S. launch of CGM system Guardian Connect with sugar IQ in late 2018 and its new professional CGM iPro 3 in 2019. In this regard, the company also announced favorable results supporting the use of CGM on people with type 2 diabetes in October 2017.
This apart, we are upbeat about Animas Corporation’s (one of the Johnson & Johnson Diabetes Care Companies) exit from the insulin pump business with Medtronic as partner to support a smooth transition for patients, caregivers and healthcare providers. Notably, patients using an Animas insulin pump will be offered the choice to switch to a Medtronic pump.
An ageing population, unhealthy lifestyle and a rising awareness and expenditure in healthcare are likely to drive growth in the diabetes market. Per a report by Mordor Intelligence, the global market for diabetes care devices is projected to reach a value of $30.25 billion by 2021 at a CAGR of 5.93%. Given the bullish market sentiments, we believe the latest positive study results have come at an opportune moment.
Share Price Movement
Medtronic has been gaining investor confidence on consistently positive results. Over the past three months, the company’s share price has outperformed the broader industry. The stock has gained 4.7% in comparison to the broader industry’s 1.8% increase.
Zacks Rank & Key Picks
Medtronic carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical sector are PerkinElmer (PKI - Free Report) , Bio-Rad Laboratories (BIO - Free Report) and Becton, Dickinson and Company (BDX - Free Report) .
PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).
Bio-Rad Laboratories has a Zacks Rank of 2. 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%.
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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