Health & Fitness
Health and Fitness
Health and Fitness
Wed, December 8, 2010
Tue, December 7, 2010
Medtronic, Boston Scientific, St. Jude Medical, ZOLL Medical and Abiomed
CHICAGO--([ BUSINESS WIRE ])--Today, Zacks Equity Research discusses the Medical Devicesa™ Industry, including: Medtronic Inc. (NYSE: [ MDT ]), Boston Scientific Corporation (NYSE: [ BSX ]), St. Jude Medical Inc. (NYSE: [ STJ ]), ZOLL Medical (Nasdaq: [ ZOLL ]) and Abiomed Inc. (Nasdaq: [ ABMD ]).
A synopsis of todaya™s Industry Outlook is presented below. The full article can be read at [ http://www.zacks.com/stock/news/44275/Medical+Devices+Industry+Outlook+%96+Dec.+2010 ]
In our portfolio, we see growth potential in companies dealing with cardiovascular devices, Neuro and blood-related products. Names include Medtronic Inc. (NYSE: [ MDT ]), Boston Scientific Corporation (NYSE: [ BSX ]), St. Jude Medical Inc. (NYSE: [ STJ ]), ZOLL Medical (Nasdaq: [ ZOLL ]) and Abiomed Inc. (Nasdaq: [ ABMD ]). Although these companies have Neutral ratings, they remain well placed in the current environment. We continue to closely monitor their performances for possible upgrades.
MedTech Giants Lead the Way
The above-listed companies produce life-sustaining products and are less affected by economic turbulence. As evident from their recent quarter results, some of these companies have been successful in weathering the storm (pricing, currency and procedure growth headwinds) in the cardiovascular space in the wake of recovery.
These companies are all leading players in their respective fields and are potential winners in the long run. In particular, with a slew of new products, the big three players (MDT, BSX and STJ) in the roughly $6.5 billion implantable cardioverter defibrillator (aICDa) market are well positioned to gain market share, despite the sluggish business environment. However, we do acknowledge the fact that a soft CRM market may prove to be a drag on these stocks.
Among the names above, Medtronic, the undisputed leader in MedTech space, has a diversified presence in Cardiovascular, Neuro, Spinal, Diabetes and ENT. The company boasts of an attractive pipeline including its new Protecta ICD and REVO pacemaker devices, which are currently awaiting final regulatory approval. Moreover, Medtronic is blessed with strong cash flows which it prudently uses for maximizing shareholder. The company is active on the acquisition front and is investing in emerging markets, which it reckons as an increasingly important growth driver.
Boston Scientific is the leader in the drug eluting stent (aDESa) market and is better placed with the recent resolution of all issues cited in its 2006 FDA corporate warning letter regarding serious regulatory problems and corrective actions at three of its facilities. The companya™s return to the ICD market (after one month absence due to product recall) represents another boost.
Moreover, Boston Scientica™s restructuring initiatives are expected to contribute to the bottom line moving forward. Importantly, the companya™s pipeline DES product Promus Element is shaping up to be a major driver of its stent business. Moreover, we are also encouraged by Boston Scientica™s acquisition of asthma-treatment company Asthmatx, which will enable it to target the pulmonary devices area.
St. Jude is poised to grow its market share in the CRM segment (especially in ICDs) driven by its new Fortify and Unify lines of devices. Moreover, we are optimistic about the emerging opportunity in intravascular imaging market, enabled by the companya™s LightLab acquisition in July 2010.
In a bid to boost its cardiovascular business St. Jude is acquiring Minnesota-based heart devices maker AGA Medical Holdings for $1.3 billion. The acquisition, which was completed recently, will eventually make the company a clear leader in the structural heart market.
The top-tier U.S. cardiovascular devices companies such as MDT, BSX and STJ are exploring new avenues of growth beyond the mature pacemaker and ICD markets. These companies are increasingly seeking opportunities to expand into fast-growing new therapy areas within or outside the cardiology space, including markets such as atrial fibrillation and neuromodulation.
Another interesting pick in our portfolio is resuscitation devices maker ZOLL Medical. ZOLL is a leading player in the global market for external defibrillators, which is worth more than $1 billion. The company is expanding its presence in the international markets, which should significantly push growth.
Notably, ZOLLa™s LifeVest wearable defibrillator business continues to grow at a healthy quarterly run rate, benefiting from increased awareness of the product and associated sales force enhancements. We are impressed with ZOLLa™s solid fundamentals, its broad product range, healthy revenue/margin mix and upbeat prospect for LifeVest.
We also believe that cardiac assist devices maker Abiomed represents another favorable opportunity for the investors. The company possesses a broad portfolio of products that are life-sustaining in nature and has been able to deliver sustainable growth in a challenging economy. Abiomed enjoys strong demand for its Impella cardiac pumps. Higher Impella sales continue to fuel double-digit revenue growth.
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