(MDT) Medtronic Introduces Spinal Device

Leading medical devices player, Medtronic (MDT), strengthened its Spinal portfolio with the launch of CD Horizon Fenestrated Screw Spinal System in Europe. The product will be used in combination with Fenestrated Screw Cement. Over the next few months, this product will be launched in India, Singapore and Australia. However, CD Horizon Fenestrated Screw Spinal System is not available in US.

With CD Horizon Fenestrated Screw Spinal System, surgeons will be able to treat patients with poor bone quality that might arise from osteoporosis. Specially formulated bone cement can be injected into a patient’s vertebral body through the pedicle screw of the system that contains additional holes at the tip.

During the last reported quarter, Medtronic’s Spinal segment generated $875 million in sales compared to $880 million in the year-ago period, down 1% (down 2% at CER). Revenues from Core Spinal and Biologics were $648 million (down 2% year over year) and $227 million (up 5%).

The fiscal 2011 has been one of the most challenging years for Medtronic based on macroeconomic downturn, decreased utilization and increased payer pushback. Although the situation is improving gradually, the two biggest segments of the company – CRDM and Spinal continue to remain under pressure. However, the company has been planning several product launches to revive the Spinal segment.

Medtronic witnessed some stability in the global spine market in the quarter, with market recording low single-digit growth. Although the U.S. market continues to remain challenging, new products induced a 6% growth in the international business. Solera witnessed strong double-digit growth and is driving the overall posterior fixation category.

Meanwhile, Medtronic is increasing its focus on emerging markets and emerging therapies and expects these to be major growth drivers going ahead. The company also faces tough competition from players such as Boston Scientific Corporation (BSX) and St. Jude Medical (STJ).

We are currently ‘Neutral’ on the stock, which also corresponds to the Zacks #3 Rank (hold) in the short-term.

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