Reuters is breaking newsthat an FDA advisory panel has backed drug-coated stents for heart patients manufactured by Medtronic (MDT). CNBC’s Mike Huckman joins the desk, reporting that the panel of outside experts appears to have voiced unanimous approval for the strents but will advise the FDA to require that Medtronic conducts a large post-market study following thousands of patients to ensure the stents are safe.
The news is great for MDT, but it’s a setback for Boston Scientific (BSX) and Johnson and Johnson (JNJ) which has had a duopoly in the stent space. With Medtronic entering the fray, and Abbott Labs developing its own products, “the competition is heating up,” Huckman says.
Other than the manufacturers of the stents, investors could look to the makers of the drugs that coat the stents and the polymers that keep the drugs in place as potential trades on the back of this news. SurModics (SRDX), Abbott Labs (ABT), Novartis (NVS) and Wyeth (WYE) all stand to benefit.
Pete Najarian is negative on the whole industry. It’s a “lawsuit waiting to happen,” he says. Several stent manufacturers have already been sued over safety issues and Pete thinks the bigger the industry gets, the bigger the class-action suits will as well. He is sticking with diagnostic companies like Myriad Genetics (MYGN) that manufacture drugs that are cheaper and less prone to lawsuits than drug-coated stents.
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Trader disclosure: On Oct 10, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Macke Owns (DIS), (INTC); Pete Najarian Owns (LXK), (ZMH), (VCLK), (GOOG); Finerman's Firm And Finerman Own (TEL), (TYC); Finerman's Firm Owns (COP), (DAI), (MSFT), (NVT), (TGT), (WMT), (YHOO); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; Seygem Asset Management Owns (AA), (F), (GLD), (IRBT), (MSFT), (SBUX), (SSL); Seygem Asset Management Is Short (TKC); Lukoil Trades Over The Counter In The U.S. But Trades On The Exchange In London; Jon Najarian Owns (GOOG), (YHOO), (BHI)