With several tailwinds gradually flowing in, opportunities are growing enormously within the medical device space. The sector is currently enjoying the investment world’s attention. While investors are putting their efforts in picking a subindustry that is beaming with prospects, the name which pops up first is the cardiovascular devices market.
Per World Health Organization (WHO), cardiovascular diseases are disorders of the heart and blood vessels. It includes coronary heart disease, cerebrovascular disease, rheumatic heart disease and other conditions.
Going by the latest Heart Disease and Stroke Statistics 2018 report by American Heart Association, around 92.1 million U.S. adults are living with some form of cardiovascular disease or the after-effects of stroke. Further, cardiovascular diseases have been deemed to be a major cause of death of around 836,546 people in the United States. Notably, this is gradually taking the shape of a deadly epidemic.
Globally, the scenario is quite intriguing. Per a WHO report, cardiovascular diseases are the major cause behind 31% of all global deaths and took the lives of 17.7 million people in 2015.
Notably, projections related to the disease hint at the continuation of the present trend. In this regard, the number of deaths globally due to cardiovascular diseases is expected to increase to more than 23.6 million by 2030. Moreover, total direct expenditures related to cardiovascular diseases are expected to rise to $749 billion in 2035.
It goes without saying that the rising incidence of cardiovascular diseases globally has opened up opportunities for cardiovascular device makers. The market is expected to witness CAGR of 6.7% to reach $81.38 billion between 2017 and 2027 (per a report by Visiongain).
Accordingly, for investors who are keen to effectively put their money for longer-term gains, the cardiovascular devices market undoubtedly holds immense potential.
Factors Driving Cardiovascular Devices Market
Rising healthcare expenditures, unhealthy lifestyle practices along with expanded treatment options have been driving demand. Per a Centers for Medicare and Medicaid Services report published by Advisory Board, U.S. healthcare spending is projected to rise to around $5.5 trillion by 2025, representing 19.9% of GDP (based on the assumption that the Affordable Care Act will continue through 2025).
The cardiovascular devices market is largely dependent on the aging population. Per the U.S. Census Bureau report, in 2050, people aged 65 or more are likely to total 83.7 million, almost double its estimated population of 43.1 million in 2012. Data also shows that the median age is increasing in most areas of the country and the global scenario is pretty similar.
Strengthening emerging markets have been contributing largely to the rise in demand for cardiovascular devices. Per an article by a leading market intelligence firm, Life Science Intelligence, the demand for some cardiovascular devices has been growing at solid double-digit rates in many emerging countries, including the BRIC nations (Brazil, Russia, India, and China) and Turkey of late.
AI Brings a New Era
According to a research firm TechEmergence, AI is being broadly used in the following three categories for better management of cardiovascular diseases.
Artificial intelligence is being applied to automate the Atrial fibrillation process falling under the ECG monitoring category. It is also being used by companies to accurately predict the risk of cardiovascular disease and its related impacts. Finally, the companies are also involved in actively using the AI platform to improve the accuracy of patient scans for detecting cardiovascular diseases.
There are certain developments, which deserve a mention here. A leading digital health company Analytics 4 Life is actively involved in designing a machine learning algorithm to detect coronary artery disease non-invasively (without radiation or accelerating the heart).
Cardiotrack, an India-based start-up, recently introduced a technology platform that uses a hand-held device, cloud storage and artificial intelligence to capture and analyze electrocardiogram signals for specific heart conditions.
Stocks to Watch Out For
We have selected three companies, which we believe can tap the promising prospects of the cardiovascular devices market.
Boston Scientific Corporation (BSX - Free Report) : This Zacks Rank #2 (Buy) company has Cardiovascular and Cardiac Rhythm Management (CRM) as two of its three reportable segments. Cardiovascular includes Interventional Cardiology and Peripheral Interventions businesses. The company is one of the leading players in the interventional cardiology market with its coronary stent product offerings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company also markets balloon catheters, rotational atherectomy systems, guide wires, guide catheters, embolic protection devices, and diagnostic catheters, as well as intravascular ultrasound imaging systems.
Within the CRM segment, the company deals with implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities.
Boston Scientific’s projected earnings growth rate for the current year is 10.3%. The stock delivered positive earnings surprise in two of the trailing four quarters with an average beat of 2.4%.
Over the past three months, Boston Scientific outperformed its industry. The stock has improved 19.9% compared with the industry’s 7.5% gain during the period.
Medtronic plc (MDT - Free Report) : This Zacks Rank #3 (Hold) company has Cardiac & Vascular Group (CVG) as one of the reportable segments. CVG comprises Cardiac Rhythm & Heart Failure (CRHF), Coronary & Structural Heart (CSH) and Aortic & Peripheral Vascular divisions (APV).
The CRHF division develops, manufactures, and commercializes products for the diagnosis, treatment, and management of heart rhythm disorders and heart failure. The APV division offers a comprehensive portfolio of products and therapies to treat aortic disease (such as aneurysms, dissections, and transections) as well as peripheral vascular disease, and critical limb ischemia.
Further, CSH division offers therapies to treat coronary artery disease and heart valve disorders.
Medtronic has an expected earnings growth rate of 7.3% for the current year. The stock has delivered positive earnings surprise in all the trailing four quarters with an average beat of 3.9%.
Over the past three months, Medtronic outperformed its industry. The stock has improved 10.4% compared with the industry’s 7.5% gain during the period.
Abbott Laboratories (ABT - Free Report) : This Zacks Rank #3 company has Cardiovascular and Neuromodulation business under the broader Medical Devices segment. The company offers a wide range of rhythm management, electrophysiology, heart failure, vascular and structural heart devices for the treatment of cardiovascular diseases, as well as neuromodulation devices for the management of chronic pain and movement disorders. These products are manufactured, marketed and distributed globally.
Heart failure related products, including the HeartMate left ventricular device family, vascular products, including the XIENCE family of drug-eluting coronary stent systems developed on the Multi-Link Vision platform, and rhythm management products, including Assurity MRI and Endurity MRI pacemaker systems are some of the prominent products offered by the company.
Abbott has an expected earnings growth rate of 14.4% for the current year. The stock has delivered positive earnings surprise in all the trailing four quarters with an average beat of 2%.
Over the past six months, Abbott outperformed its industry. The stock has improved 10.4% compared with the industry’s 9.1% gain during the period.
As they say, strike while the iron is hot. It is the opportune time to cash in on the bountiful opportunities in the rapidly-growing cardiovascular devices market.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>