Device Medtronic Acquired In $800M Deal Found Ineffective
Med-tech giant Medtronic, Inc., said Thursday that a clinical trial found one of its medical devices to be ineffective—news that caused shares of the company’s stock to dip.
In early 2011, Fridley-based Medtronic paid $800 million in cash to acquire California-based Ardian, Inc., along with its flagship product, the Symplicity Catheter System. The product is approved in many countries outside of the United States but recently underwent a clinical trial domestically.
Medtronic said Thursday that the U.S. trial for Symplicity, which is designed to treat high blood pressure, or “hypertension,” found the device to be safe.
“Importantly, however, the trial did not meet its primary efficacy endpoint,” Deepak L. Bhatt, a professor of medicine and co-principal investigator for the device, said in a statement.
The Symplicity therapy was designed for those whose hypertension is found untreatable through traditional drugs. It delivers low-level radio frequency through the wall of arteries that sends blood to the kidneys. But the study found it to be ineffective.
Medtronic said that, based on the clinical trial’s findings, it’s suspending enrollment in the three countries in which trials are being conducted: Japan, India, and the United States.
The company also said that it plans to bring together a panel of independent advisors, comprising both physicians and researchers, who make recommendations about Medtronic’s “global hypertension clinical trial program” and also “provide advice on continued physician and patient access to the Symplicity technology in countries with regulatory approvals.”
“We believe this course of action is the most prudent and will help us thoroughly evaluate these findings and determine the appropriate next steps for renal denervation therapy,” Medtronic Chief Medical Officer Rick Kuntz said in a statement. The company is “disappointed” that the trial found the product to be ineffective, he said.
Medtronic said an unspecified “one-time impairment charge in the future” is “likely,” although it’s sticking with its previous revenue and earnings guidance for the current fiscal year.
The company also said it’s reevaluating the value of its assets that are focused on “renal denervation,” or the treatment of hypertension. The company's renal denervation assets fall under the umbrella of Medtronic's larger Cardiac and Vascular Group business.
Shares of the company’s stock were trading down about 2.3 percent late Thursday morning at $59.43.