A panel advising the U.S. Food and Drug Administration has concluded that an experimental device from Medtronic poses a potential health risk that outweighs its benefit to patients.
Medtronic sought FDA approval of the device for treatment of a condition in which the heart's upper chambers beat rapidly and ineffectively, a condition known as atrial fibrillation. The catheter in the device uses extreme heat to correct irregular heartbeats.
In 2009, Medtronic paid $225 million for the company that developed the device.
Edward Jones analyst Aaron Vaughn says the deal isn't looking so good for Medtronic now.
"Investors weren't anticipating great things from the product. But it's disappointing," Vaughn said. "It's another example of an acquisition that hasn't quite worked out as the company expected."
The panel's recommendation isn't binding. The FDA will consider it when the agency by the FDA when it reviews Medtronic's request to bring the device to market.
Jan Wald, an analyst with Morgan Keegan, says that atrial fibrillation was one of the growth areas that Medtronic targeted as a way to boost its growth.
"This is an area where they wanted to have at last two devices. So, it's a blow to their strategic plan," she said.
The panel's recommendation isn't binding. But the FDA will consider it when the agency reviews Medtronic's request to bring the device to market.