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Medtronic's CoreValve Wins Regulatory Approval in Japan - Analyst Blog

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Medical device major Medtronic plc’s MDT renowned transcatheter aortic valve replacement (TAVI) system – the CoreValve – has recently received Japanese regulatory approval for implantation in patients with severe aortic stenosis (AS), for whom surgery is not an option.

Aortic stenosis is a medical condition which causes narrowing of the aortic valve that obstructs blood flow from one’s heart thereby forcing the heart muscles to over exercise. This may eventually lead to serious cardiac problems.

In the TAVI procedure, an artificial heart valve is implanted in the heart to replace the diseased aortic valve, thereby restoring the size of the aortic opening.

Impressed with the outcomes of studies like the CoreValve U.S. Pivotal Trials and the Medtronic CoreValve Japan Trial, the Japanese Ministry of Health, Labour and Welfare approved the self-expanding CoreValve system for utilization in the TAVI procedure.

Results from both the Extreme and High Risk Studies in the CoreValve U.S. Pivotal Trial demonstrated the safety and efficacy of the CoreValve system, reflected by the high survival rates observed among patients as well as some of the lowest rates of stroke and valve leakage reported.

On the other hand, the Medtronic CoreValve Japan Trial – the first study to evaluate a self-expandable transcatheter valve involving the Japanese population – also demonstrated functional and anatomical effectiveness of CoreValve system. Evidently, among all the trial patients, 90.8% were free from all-cause mortality within 6 months.

We believe this news will enhance the demand for Medtronic’s CoreValve in the international market.

Currently, management plans to work with Japan's Ministry of Health, Labour and Welfare to obtain reimbursement coverage for its CoreValve system in the country. We believe there is significant opportunity for adoption of this system, once reimbursed, resulting in revenue growth for Medtronic.

Remarkably, a couple of weeks ago, 2-year outcomes from the High Risk Study of the CoreValve U.S. Pivotal Trial demonstrated the superior survival benefit of Medtronic’s CoreValve System in patients undergoing transcatheter aortic valve replacement (TAVR), as against conventional surgical aortic valve replacement (SAVR).

Buoyed by the progress, an increased number of physicians have now been found to gradually accept CoreValve as a more suitable alternative for Transcatheter Aortic Valve Implantation (TAVI) in high-risk surgery patients. Evidently, the CoreValve System has been used for more than 75,000 patients in an excess of 60 countries, ever since it won the CE (Conformité Européenne) Mark in 2007.

We believe, on the back of these developments, Medtronic will be able to capture a larger share in the global TAVR market, which is expected to grow 20% to 25% annually over the next year. This, in turn, is expected to bolster investors’ confidence in this stock.

Currently, the stock carries a Zacks Rank #3 (Hold). Some better-ranked medical products stocks are LeMaitre Vascular, Inc. LMAT, SurModics, Inc. SRDX and Capricor Therapeutics, Inc. CAPR. While LeMaitre and SurModics sport a Zacks Rank #1 (Strong Buy), Capricor Therapeutics holds a Zacks Rank #2 (Buy).


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