St. Jude Devices Get Japanese Nod - Analyst Blog
June 23 2011 - 2:20PM
Zacks
Medical technology giant St. Jude Medical (STJ)
has received clearance of the Japanese Ministry of Health, Labor
and Welfare (“MHLW”) for its Fortify ST implantable cardioverter
defibrillator (“ICD”) and Unify cardiac resynchronization therapy
defibrillator (“CRT-D”).
The Minnesota-based company has launched these products, the
smallest available in the industry, in the lucrative Japanese
market.
ICDs treat
abnormally fast heartbeats, which can lead to sudden cardiac arrest
- a risk to life. CRT-Ds resynchronize the beating of the
heart’s lower chambers that often beat abnormally in patients with
heart failure.
Fortify ST ICD and Unify CRT-D feature advanced battery
technology and circuitry along with more energy capacity and rapid
charge times while having extended longevity. These devices
also feature
40J of delivered energy, which ensures that
treatment will be successful for patients requiring a higher
energy shock for defibrillation. The narrower shape of these
devices enables physicians to implant them using a smaller
Incision.
Fortify ST, which incorporates the company’s ST segment
monitoring diagnostic algorithm, continuously monitors and records
for small changes in the ST segment of the electrocardiogram that
can indicate the onset of serious conditions such as ischemia.
Moreover, Fortify ST and Unify feature the company’s ShockGuard
technology (approved in April 2011), geared to reduce the
occurrence of inappropriate and unnecessary shocks to patients. The
ShockGuard technology features DecisionTx programming which
distinguish rhythms that require defibrillation and those that do
not. Together, they offer an advanced sensing technology which
avoids sensing unwanted signals and the need for high voltage
shocks.
The ShockGuard technology has demonstrated the ability to
reduce inappropriate defibrillation, which is encouraging. A
study revealed that 98.5% of patients with this
breakthrough
technology did not experience inappropriate shocks following one
year with the implant.
St. Jude’s Fortify and Unify devices (approved in the U.S. in
May 2010) are already gaining notable traction and the company is
poised to expand its position through increased penetration with
these new devices. The company recently launched these products in
India.
St. Jude is well placed to broaden its global ICD market share
with a strong pipeline of new ICD devices (including the
quadripolar CRT systems) scheduled for launch in the U.S. in 2011.
The company’s bigger rival Medtronic (MDT)
is the
undisputed leader in the global ICD market.
We remain intrigued by St. Jude’s ability to deliver consistent
revenue and earnings growth. Moving forward, revenue growth should
be fueled by numerous product launches.
While we are impressed by St. Jude’s solid fundamentals, strong
product mix, healthy growth trajectory and operating leverage, we
remain wary
of competition-driven pricing pressure and a soft CRM
market, which may dent future operating results. Our Neutral
recommendation for the stock is in tandem with a Zacks #3 Rank
(Hold).
MEDTRONIC (MDT): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
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