QUOTE AND NEWS
Benzinga  Apr 25  Comment 
SunTrust Robinson Humphrey initiated coverage on Medtronic PLC (NYSE: MDT) with a Buy rating. The target price for Medtronic is set to $93. Medtronic shares gained 0.04 percent to close at $79.02 on Friday. Analysts at Keefe Bruyette & Woods...
MarketWatch  Apr 20  Comment 
Medtronic PLC said Wednesday it is voluntarily recalling about 10,000 battery packs used in medical devices that monitor patient breathing because of the risk of heat damage. The company said seven of the defective battery packs reportedly had...
Yahoo  Apr 12  Comment 
Medtronic's $53 billion merger with Covidien has done little for the medical-device giant's stock price.
newratings.com  Apr 7  Comment 
FRIDLEY (dpa-AFX) - The U.S. Food and Drug Administration said that it approved the first pacemaker that does not require the use of wired leads to provide an electrical connection between the pulse-generating device and the heart. While the...
MedPage Today  Apr 6  Comment 
(MedPage Today) -- Micra demonstrated efficacy in 98% of implanted patients
MarketWatch  Apr 6  Comment 
Medtronic, which moved its headquarters to Ireland last year, says the government’s new tax rules on inversion deals won’t have a big impact on its finances.
Motley Fool  Apr 5  Comment 
Study results may give the company an edge in the battle for market share in aortic stenosis.
Benzinga  Mar 24  Comment 
On March 15, 2016, United Therapeutics Corporation (NASDAQ: UTHR) was informed by Medtronic Inc. (NYSE: MDT) that the U.S. Food and Drug Administration ("FDA") had issued a response letter to Medtronic's premarket approval application ("PMA") for...




 

Medtronic (NYSE:MDT) is the world's largest medical device company. MDT is best known for its pacemakers but also produces a wide range of other medical devices, including external defibrillators, insulin pumps and image guided surgery systems.

Business Overview

Business & Financial Metrics[1]

In 2010, MDT generated a net income of $3.10 billion on revenues of $15.81 billion. This represents a 49.7% increase in net income on a 8.4% increase in revenues from 2009, when the compoany earned $2.07 billion on revenues of $14.60 billion.

Business Segments[2]

MDT operates in seven main divisions that are aggregated into a single operating segment:[2]

  • Cardiac Rhythm Disease Management: MDT is the world’s leading supplier of pacemakers.[3]
  • Spinal: spinal products and image guided surgery systems that are used by surgeons during precision cranial and orthopedic surgeries. [4]
  • CardioVascular: products and therapies such as stents which are to treat coronary artery disease, aneurysms, and peripheral vascular disease. [5]
  • Neuromodulation: devices for the treatment of neurological, urological, and gastrointestinal disorders. One of the main devices is a neurostimulation system, which is about the size of a stopwatch and can be implanted under the skin to deliver electrical pulses to the spinal cord. [6]
  • Diabetes: devices such as external insulin pumps and glucose monitoring (CGM) systems for maintaining control of glucose levels and supporting the treatment of diabetes. [7]
  • Surgical Technologies: products used for procedures such as heart valve repair and replacement. These include perfusion systems, which oxygenate and circulate a patient’s blood during heart surgery, and products used for the repair and replacement of heart valves, etc.[8]
  • Physio-Control: products such as external defibrillators which are used on victims of cardiac arrest. [9]

Key Trends and Forces

Medicare coverage patterns

Health coverage is an important determining factor when patients and doctors choose among various treatment options. Medicare coverage is particularly significant in that it directly affects over forty million Americans, how much patients have to pay for Medtronic products, and how much Medtronic will receive in payments from Medicare. Currently, Medicare and other third party payors are emphasizing more cost-effective medical devices, by limiting the reimbursement they will cover. Furthermore, even if a new medical device is cleared by the FDA, Medtronic faces limited demand for the device until Medicare and other payors approve the device for reimbursement.

Government Regulation

Medtronic and its competitors are all heavily affected by government regulation, especially by the FDA, which is responsible for regulating food, dietary supplements, drugs, medical devices, and other products in the United States. Without FDA approval, Medtronic cannot sell any of its medical devices to the public. If any of Medtronic's devices fail FDA approval, it can adversely affect the company's sales.

Diabetes

Diabetes currently affects around 200 million people worldwide, including 21 million people in the U.S. It is estimated that more than $132 billion is spent annually on diabetes and its complications. One of the key risk factors for diabetes is obesity, which has been on the rise in the United States. MDT currently has several products that serve the diabetic market, and it represents an opportunity for MDT to generate additional revenue in this large and expanding market.

Saturation of Implantable Cardiac Rhythm Devices (ICD) Market

ICDs are stopwatch-sized devices that monitor the heart and deliver appropriate therapy when an abnormal heart rhythm is detected. Medtronic holds over 50% market share for ICDs and this product contribute about 25% of Medtronic's sales. ICDs usage has grown substantially over the years, due to trial results which showed ICDs reduced death by 23% in people with moderate heart failure compared to those who did not receive ICDs. [10] However, growth in this market has been declining recently as the patient population which ICDs serve is substantially penetrated. If MDT can't sell as many ICDs as it has in the past, its sales may be adversely affected.

Competition

MDT faces strong competition in nearly every segment that it operates in. Primary competitors in their various business lines include:

References

  1. MDT 2009 10-K pg. 85  
  2. 2.0 2.1 MDT 2009 10-K pg. 1  
  3. MDT 2007 10k, Pg 2
  4. MDT 2007 10k, Pg 5
  5. MDT 2007 10k, Pg 9
  6. MDT 2007 10k, Pg 13
  7. MDT 2007 10k, Pg 15
  8. MDT 2007 10k, Pg 16
  9. MDT 2007 10k, Pg 20
  10. MDT 2007 10k, Pg 4
  11. MDT 2007 10k, Pg 2
  12. MDT 2007 10k, Pg 5
  13. MDT 2007 10k, Pg 9
  14. MDT 2007 10k, Pg 13
  15. MDT 2007 10k, Pg 15
  16. MDT 2007 10k, Pg 16
  17. MDT 2007 10k, Pg 18
  18. MDT 2007 10k, Pg 20
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