Medtronic’s (MDT: 36.20 0.00 0.00%) subsidiary, Physio-Control, is working towards fixing certain battery related issues with its defibrillator/monitors that were manufactured before January 9, 2009. The resolution of the issue is significant since the loss of battery power may occur during the course of an operation also, which could result in serious injury or death. Medtronic is in the process of informing all its customers.The US Food and Drug Administration (FDA) assigned a class I recall status to 42,943 Lifepak 20 and Lifepak 20e defibrillator/monitors, which were distributed between 2002 and 2007. These devices are meant to monitor patient heart rhythms and treat patients experiencing cardiac arrest. Although unconfirmed, there has been one instance of adverse patient event.
Earlier, in April 2010, Medtronic had to correct a different model, Lifepak 15 defibrillator/monitors because of a potential electrical problem. However, no adverse patient events were reported.
In fiscal 2010, Medtronic’s Physio-Control segment generated $425 million in sales and accounted for 3% of total sales of the company. The company manufactures external defibrillators, including manual defibrillator/monitors used by hospitals and emergency response personnel and automated external defibrillators (AEDs) used in commercial and public settings. The company also offers related data management solutions and support services.
Medtronic is one of the world’s leading medical technology companies, specializing in implantable and interventional therapy devices and products. Apart from Physio-Control, Medtronic’s other business segments include Cardiac Rhythm Disease Management (CRDM), Spinal, CardioVascular, Neuromodulation, Surgical Technologies and Diabetes.
Medtronic has made some strategic acquisitions in the recent past which should boost revenues in the forthcoming period. Although the company is witnessing pricing pressure in the domestic market, new product launches should enable it to offset the impact to some extent. Moreover, a strong balance sheet augurs well for further suitable acquisitions. We are currently Neutral on Medtronic.
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