STJ ST. Jude Medical, Inc.

Medical devices giant St. Jude Medical (STJ) recently announced that it has won European CE Mark approval for its Accent MRI pacemaker and Tendril MRI lead. The company has designed and tested this system for safe usage with Magnetic Resonance Imaging (“MRI”) equipment and it received approval as MR-Conditional. The system allows patients to receive full-body high-definition MRI scans.

Earlier, in February 2011, the US Food and Drug Administration (“FDA”) approved rival Medtronic’s (MDT) Revo MRI SureScan pacemaker, which is designed to ensure safety in certain MRI scans.

On a global basis, about a million pacemakers are implanted each year. Almost three-quarter of pacemaker recipients stand to gain from an MRI scan at some point. The latest Accent MRI pacemaker system is a sophisticated pacing technology that includes algorithms and wireless telemetry to provide answers for specific patient conditions with the additional benefit of safety during MRI scans.

The technology provides an MRI Activator device, which provides a hassle-free option for programming the device to the correct MRI mode at the time of the scan. Both manpower and clinical efficiency are improved as there is no requirement for a programmer. The MRI Activator can also be utilized to re-program the device back to its original settings once the scan has been done.     

St. Jude’s Tendril MRI pacing lead, developed on the well-established Tendril lead platform, offers new design benefits for safe MR-Conditional scanning. Its narrow diameter means that it is easier for doctors to implant while it retains the convenient handling features of the Tendril platform of pacing leads.

Furthermore, the Accent MRI pacemaker system has InvisiLink telemetry, which permits safe wireless communication between the programmer and the implanted device. The Accent MRI pacemaker system carries other features that help with patient management. One of these features is the AutoCapture Pacing System know-how, which gauges the heart’s reaction to pacing on a beat-by-beat basis.

We remain impressed with St. Jude’s ability to deliver consistent revenue and earnings growth and believe that its first quarter results to be supported by new products. Notably, the company’s Fortify and Unify devices should help it gain share in the ICD space. However, St. Jude and its peers Medtronic and Boston Scientific (BSX) are increasingly in a tug-of-war to grab market share in the soft CRM market.

While we are impressed with St. Jude’s solid fundamentals, strong product mix, healthy growth trajectory and operating leverage, we remain wary of competition-driven pricing pressure and the dilutive impact of acquisitions and any unfavorable currency exchange fluctuations on the bottom line. Currently, we are Neutral on the stock, backed by a short-term Zacks #3 Rank (Hold).

 
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