Medtronic Wins Neuromodulation Patent Dispute Against Axonics

Medtronic MDT recently announced a patent litigation win related to its sacral neuromodulation device and termed it as ‘an important victory’. Specifically, the company’s sacral neuromodulation device family, the InterStim systems won a patent dispute over intellectual property, claimed by the company’s peer in the field of implantable sacral neuromodulation (SNM) devices, Axonics Modulation Technologies.

The Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office entirely rejected Axonics' attempt to invalidate a key Medtronic patent.

The Chronology

Last November, Medtronic had filed charges of infringement of seven patents against Axonics.

In response, in March, Axonics Modulation Technologies filed seven inter partes review (IPR) petitions contesting the validity of seven Medtronic patents. However, PTAB’s latest verdict has rejected without hearing the challenge to Medtronic's U.S. Patent No. 9,463,324 ('324 patent) and found that Axonics' arguments lack merit.

 

Last week, the PTAB also decided to institute full IPR proceedings related to the six additional patents that are at issue. For these IPR proceedings, the PTAB will hear testimony and argument of both the parties. The decision of the full IPR process will be announced within the next 12 months.

Medtronic's Sacral Neuromodulation at a Glance

The Medtronic InterStim system for bladder control and bowel control addresses symptoms of overactive bladder, non-obstructive urinary retention, and chronic fecal incontinence through direct modulation of the nerve activity.  The InterStim system electrically stimulates the sacral nerves to normalize neural communication between the bladder and brain, and between the bowel and brain.

InterStim therapy can improve the condition of a pelvic floor disorder and allow a patient to lead a full life.

In August, the company commenced the enrolment for a prospective, multicenter, global, post-market study of its InterStim Micro neurostimulator — Evaluation of InterStim Micro System Performance and Safety (“ELITE”) — for sacral neuromodulation (“SNM”) therapy. Notably, the neurostimulator was cleared by the FDA in the same month and subsequently launched in the United States. It had received the CE Mark in January.

Per the medical fraternity, although the SNM therapy has already been established as safe and effective, the ELITE study is expected to reinforce the same in patients implanted with the new InterStim Micro system. This is expected to encourage more patients to seek the SNM therapy.

Industry Prospects

Per a report by Reports and Data published on GlobeNewswire, the global SNM market was valued at $2189.1 million in 2018 and is projected to reach $3153.4 million by year 2026 at a CAGR of approximately 4.9%. Factors like rising elderly population, increasing incidents of neurological diseases and failure of conventional treatments are likely to drive the market.

Given the market potential, the study is expected to further establish the efficacy of the SNM therapy and boost Medtronic’s business.

Price Performance

Shares of the company have lost 5.1% in the past year compared with the industry’s 2.6% fall.

Zacks Rank & Key Picks

Currently, Medtronic carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are QIAGEN N.V. QGEN, Thermo Fisher Scientific Inc. TMO and Hologic, Inc. HOLX.

QIAGEN’s long-term earnings-growth rate is estimated at 22.3%. It currently sports a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher’s long-term earnings-growth rate is estimated at 15.5%. It currently carries a Zacks Rank #2 (Buy).

Hologic’s long-term earnings-growth rate is estimated at 16.4%. The company presently sports a Zacks Rank #1.

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