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Medtronic (MDT) Launches Resolute Onyx DES Device in Japan

Medtronic plc MDT, a leading global player in medical technology, services and solutions, is set to make another encouraging move with respect to its highest-revenue-grossing Cardiovascular segment. Following the successful launch of its highly innovative and sophisticated Drug Eluting Stent (DES), Resolute Onyx in the U.S. in May 2017, Medtronic is now planning to start selling it in the high-growth Japan market from Jul 10, as per a Cardiovascular Business report released on Jul 7. 

This is in line with the company’s strategy to focus on research and development of high-end medical device products within its core business lines. Notably, the FDA-approved Resolute Onyx DES had also received CE mark in Europe in 2014.

Resolute Onyx DES is an upgraded version of Resolute Integrity DES which works on the Core Wire Technology, an evolution of Continuous Sinusoid Technology (CST). Thus, Resolute Onyx DES provides enhanced visibility to surgeons, delivering superior clinical performance.

Interestingly, Medtronic’s cardiovascular segment contributed 35.98% to total revenues in fourth-quarter fiscal 2017 banking on strong growth in Arrhythmia Management as well as transcatheter aortic valves and HeartWare International acquisition. Moreover, the company’s latest development in Japan will help boost the company’s performance in this segment.

Medtronic’s strategy to gain traction in its Coronary and Structural Heart sub-segment seems to be aligned with data provided by Transparency Market Research.  Per the report, the global coronary stents market is expected to see a CAGR of 6.6% from 2013 to 2019.

More specifically, the DES market within the Coronary stents market is expanding fast. It is estimated to witness a CAGR of 9.54% in the 2013–2019 period. The market is likely to expand 9% in the U.S., 10% in the Asia Pacific, and 3.1% in Europe as well as the Rest of the World

We believe the high incidence of atherosclerosis diseases due to unhealthy lifestyle, penetration by the DES providing companies in the untapped markets and increasing awareness among people will continue to stimulate the global acceptance of this technology. In the view of these encouraging factors, we believe that the company’s Japanese launch plans for Resolute Onyx is strategic and will broaden its customer base in the densely populated Asia-Pacific market.

Though based in a highly fragmented Coronary Stents market, Medtronic faces strong competition from global leaders like Boston Scientific Corp. BSX, Abbott Laboratories ABT and others. Boston Scientific’s PROMUS Element Plus Stent System and Abbott’s XIENCE V and XIENCE nano Everolimus Eluting Coronary Stent System are worth a mention in this regard.

Medtronic has been performing better than the broader Medical Instruments market, gaining 18.2% as compared to the industry’s 16.3% over the last six months. It also outperformed the 6.8% gain of the S&P 500 market over the same time frame.

Zacks Rank & Key Picks

Medtronic currently carries a Zacks Rank #3 (Hold). A better-ranked medical stock is Inogen, Inc. INGN, with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 23.5% over the last three months.

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