$43.12
-0.50 (-1.15%)
Medtronic, Inc. (MDT)
CAPS Rating:
A medical technology Company alleviating pain, restoring health, and extending life for millions of people around the world.
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Medtronic, Inc. engages in the development, manufacture, and marketing of medical devices worldwide. It is the world leader in medical technology providing lifelong solutions for people with chronic disease. The company functions in seven operating segments that manufacture and sell device-based medical therapies. These segments include Cardiac Rhythm Disease Management (CRDM), Spinal and Navigation, Neurological, Vascular, Diabetes, Cardiac Surgery, and Ear, Nose and Throat.
The company posted solid third quarter results with the revenues surging up by 10%. Although the implantable cardioverter defibrillators (ICDs) catering to CRDM segment took a sharp dip, the company is recently launched a direct-to-consumer advertising campaign to highlight the benefits of ICDs. This initiative from the company is expected to generate greater awareness of the devices among potential end users.
Medtronic is on its way to launch its drug-coated stent and artificial discs domestically in 2007 and also expects to launch three artificial disc systems, including the first cervical discs through the same period. Moreover the company’s new spinal bone graft product is the only one of its kind in the market and it is one of the leading company’s in developing sensors that constantly monitor blood sugar levels in diabetics.
Medtronic is the largest medical-equipment maker with more than 50% share in its core heart devices segment. It also holds market-leading positions in spinal products and insulin pumps. Additionally its diversified portfolio and strategy to develop products for a wide range of chronic diseases puts Medtronic well ahead of its peers to take advantage of new trends in disease management.
The company has recently acquired Transneuronix which is expected to put the company way ahead in the path of using implantable gastric devices to induce weight loss which is a growing market. Hence looking at its diversified portfolio, market leading positions in most of its segment and ability to develop new products ahead of time, the company is expected to post solid growth in the coming months.
Medtronic, the world’s leading medical technology company, in May, formed a strategic alliance with J&J's Biosense Webster unit to advance the care of patients with cardiac arrhythmias, also known as irregular heartbeats. Under the terms of the agreement, the two companies plan to collaborate on three key areas of interest: a clinical trial, a technology development initiative and educational programs. This new strategic alliance will strengthen the relations of Medtronic and J&J and leverage the unique resources and technologies of the two companies together; the same will benefit the millions of patients who suffer from cardiac arrhythmias around the world.
In the latest quarterly results, Medtronic reported a 7% increase in sales and 9.7% increase in net profit due to the sales of Implantable Cardiac Defibrillators (ICD), the company's top product, which grew by 1.6% to $770 million. The market for the heart devices, known as ICDs, has been rocky since 2005, but recent quarter reports from Medtronic competitors’ Boston Scientific Corp. (BSX) and St. Jude Medical Inc. (STJ) indicated some stabilization. The results from Medtronic, the largest ICD maker, appeared to back those positive signs. Also, sales outside the U.S. grew 20% which shows high growth potential for the company in international markets. The quarter included more than 10 percent sales growth in the neurological, diabetes, vascular and spinal divisions.
Currently, ICD market is mostly untapped. Of the 1.3 million U.S. patients medically eligible for the devices, only about 35 percent have had one implanted and these are central to the company's performance because these devices have 75 percent profit margins. Medtronic holds about half of the $5.6 billion-a-year implantable defibrillator market. With increasing market of ICDs, Medtronic has huge potential to grow in the future.