The torrential downpour over Medtronic (NYSE: MDT) has lifted and there are clear skies overhead. Last week, the company announced an approval of Consulta and Syncra cardiac resynchronization therapy pacemaker systems and yesterday gained an approval of the Protecta family of implantable cardioverter defibrillators and cardiac resynchronization therapy defibrillators.
The quick succession of approvals wasn't a coincidence. Approvals had been hung up while the medical-device maker cleared up warning letter issues at two of its manufacturing plants. After getting the Food and Drug Administration to sign off earlier this month, the pending approvals could finally make their way through the system.
In the medical device business, the company with the newest toys usually wins. Companies are always pushing the envelope to add new features to the devices; the Proteca reduces unnecessary shocks from the defibrillator and the Consulta and Syncra allow for remote monitoring of patients. Without the ability to gain new approvals, Medtronic was at a disadvantage when competing with Boston Scientific (NYSE: BSX) and St. Jude Medical (NYSE: STJ) in the pacemaker-defibrillator space.
A company can only rely on current products for so long until a competitor's product passes them up. Clearing up the warning letters also ensures that the company's new Resolute drug-eluting stent can be approved and compete with offerings from Boston Scientific, Johnson & Johnson (NYSE: JNJ), and Abbott Labs (NYSE: ABT).
Now that the approvals are rolling in, the biggest concern is doctors' reaction to the manufacturing issues. My bet is that they'll be forgiving; Boston Scientific bounced back fairly well after its FDA snafu. Doctors love trying out the newest toys, and Medtronic certainly has enough for them to play with.
Interested in keeping track of Medtronic as it launches new products? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on Medtronic.
