Good news seems to keep coming for medtech company Medtronic.
Good news seems to keep coming for medtech company Medtronic.
A few days ago, the company reported it took a smaller financial hit than expected due to Hurricane Maria causing a shut down of manufacturing operations in Puerto Rico. The company’s four facilities on the island were closed ahead of the storm. Due to the severity of Hurricane Maria, Medtronic has braced itself for an estimated $250 million blow to revenue and non-GAAP net earnings for the second quarter. However the company said it now only expected to see a loss of $55 to $65 million from the storm, far less than what it feared.
Coupled with last month’s decision by Animas Corporation to exit the insulin pump space and shift its customers to Medtronic, the Minnesota-based company is well-positioned for the future. In October, Animas, a division of Johnson & Johnson, announced it was exiting the $1.7 billion market space due to the changing needs of customers, market dynamics and increased competition. The company told its customers about its decision and informed them of options they could find with Medtronic.
In addition to Animas leaving the space, other companies have also ceased insulin pump operations or have cut programs. The Minneapolis Star Tribune reported that Asante stopped selling its Snap Insulin pump in 2015. Roche also stopped its Accu-Chek insulin pump and referred patients to Medtronic, the Star Tribune said.
Not only has Medtronic benefitted from the Animas exit, but the company is also seeing positive results from insurance companies. The Star Tribune reported that coverage policies from companies like UnitedHealthcare and the federal Medicare program have provided Medtronic with a “financial edge” over other insulin pump makers.
But it’s not only in the insulin pump space that Medtronic is expected to see growth. Medtronic said it anticipates the “expected strength of new product demand, particularly in the Cardiac and Vascular Group and Diabetes Group” to mitigate those losses. In September, the company’s HeartWare HVAD System was approved by the U.S. Food and Drug Administration as a destination therapy for patients with advanced heart failure who are not candidates for heart transplants.
Earlier this month, Medtronic won European approval for its Intellis platform for both Spinal Cord Stimulation and Peripheral Nerve Stimulation as an aid in the management of certain types of chronic pain. Data is tracked through a smartphone. The Intellis platform can help optimize treatment and improve patient-physician communication by tracking and sharing daily activities, body positions and therapy usage and giving physicians an objective look at mobility and progress.
Shares of Medtronic are down slightly this morning, trading at $78.69 as of 11:30 a.m.
