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Abbott's MitraClip Therapy Wins Reimbursement Nod From MHLW

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The Ministry of Health Labour and Welfare ("MHLW") in Japan granted national reimbursement to Abbott’s (ABT - Free Report)   MitraClip therapy. The move is likely to improve the company’s Structural Heart business.

MitraClip is a FDA approved and CE Marked system. Also in nearly 50 countries, more than 50,000 people have been treated with the MitraClip. MHLW approved the MitraClip System in Japan in November 2017.

What is MitraClip?

MitraClip therapy is used to treat patients with mitral regurgitation. The reimbursement will be effective from April 1, 2018 in Japan. This reimbursement will entitle patients to access the therapy through the country's health insurance plans.

 

 

Per the company, mitral regurgitation is a serious, progressive heart disease in which the mitral valve does not close properly, allowing blood to flow backward into the heart.

The MitraClip system is approved in Japan for the treatment of both severe degenerative mitral regurgitation ("DMR") and functional mitral regurgitation ("FMR") heart diseases.

A Glimpse of the Structural Heart Business

Abbott’s Medical Device segment presently comprises the new Cardiovascular and Neuromodulation, Heart Failure, Electrophysiology, Structural Heart, Rhythm Management, Vascular businesses along with the Diabetes Care business.

Sales improvement at this segment was driven by double-digit growth in Heart Failure, Electrophysiology, Structural Heart, Neuromodulation and Diabetes Care in the last quarter.

Notably, the Structural Heart business accounted for 9.3% of total revenues in the Medical devices segment. The upside was led by continued double-digit growth of MitraClip. We believe the latest development will boost the company’s top line.

Recently, the company announced the receipt of FDA approval for the world’s smallest rotatable, bileaflet mechanical heart valve — Masters HP 15mm. With the approval, the company has expanded the Masters Series portfolio under the Structural Heart business.

Market Prospects

Per a report by Allied Market Research, Tanscatheter Mitral Valve Repair & Replacement Market is estimated to worth $1,878 million (both repair and replacement valves) by 2023, at a CAGR of 30% from 2017 to 2023. A noteworthy company in this space is Edwards Lifesciences Corporation (EW - Free Report) .

Share Price & Estimate Revision Trend

Abbott has been gaining investor confidence on consistent positive results. Over the last three months, the stock has outperformed the industry. The stock has moved up 9.4%, in comparison with the broader industry’s 4.1% gain.

The current estimate revision trend is favorable. For the current year, 12 estimates moved north compared with one movement in the opposite direction over the last two months. As a result, the Zacks Consensus Estimate for the full year has risen 1.1% to $2.86 per share.

Zacks Rank & Key Picks

Abbott carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) and Varian Medical Systems, Inc. .

Bio-Rad Laboratories sports a Zacks Rank of 1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The company has a long-term expected earnings growth rate of 20%.

Varian Medical has a long-term expected earnings growth rate of 8%. The stock carries a Zacks Rank #2 (Buy).

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