Medtronic confirms forecast direction change, the market reacts, and brains are stimulated

The ‘reasons why’ we (and others like David Shaywitz in Forbes) proposed back on 12 August for Medtronic’s purchase of Cardiocom were fully confirmed by their CEO Omar Ishrak in Bloomberg (21 August) and an analysis in Forbes (24 August). However, the Forbes article continues on to dump a bucket of cold water on Mr. Ishrak’s  ‘solutions provider’ strategem (so reminiscent of 2008-9 with different companies), positing that telehealth belongs with wireless/mobile companies (Qualcomm), companies further downstream (Allscripts, a major US pharmacy benefits manager) or other technology/monitoring companies. Mr. Market held the roses though (Deutsche Bank’s reiterated hold rating in Benzinga reflecting the consensus in Yahoo Finance).

What is interesting are their advances in brain stimulation to relieve pain in two areas. Earlier this month, Medtronic received FDA approval for their RestoreSensor SureScan MRI neurostimulation system, an implant in the spinal cord to treat chronic back pain that also allows the patient to undergo an MRU with the implant in place. Following this was an announcement for the Activa PC+S deep brain stimulation system to record brain activity while delivering electronic therapy to treat Parkinson’s symptoms, essential tremors and epilepsy. It received its CE Mark in January but is still in progress with FDA (Medical Xpress). Medtronic is also pursuing contracts with about a dozen large European medical centers to manage their cardiac catheterization laboratories. All ways that a traditional medical device company is attempting to counter the slowdown in its base business.

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