STJ ST. Jude Medical, Inc.

Medical devices major St. Jude Medical (STJ) has reached another milestone having registered the first use of its new renal denervation catheter and generator system. The technology has been developed for treating resistant hypertension, high blood pressure, which does not respond well to conventional medical therapy. The first procedure was performed at the Royal Adelaide Hospital in South Australia.

Roughly 75 million people are afflicted by hypertension in the U.S., of which, 5 million are resistant to drug therapy. The direct annual cost to treat hypertension is roughly $500 billion globally.

Renal denervation is a novel procedure, which treats hypertension by the deactivation of the nerves (which stimulate high blood pressure) adjacent to the renal arteries using a catheter-based probe. St. Jude hopes that the new renal denervation system will offer physicians a potential alternative therapy option for treating patients with resistant hypertension. The technology is expected to mitigate health care costs associated with hypertension by reducing (or potentially eliminating) the use of costly drug therapy. 

The emerging renal denervation business is a part of St. Jude’s Cardiovascular division and represents a major growth prospect. The company plans for a limited market launch of the renal denervation system in Europe before end-2012. St. Jude’s larger peer Medtronic’s (MDT) Simplicity renal denervation catheter system is currently undergoing clinical evaluation in the U.S. The product is commercially available in Europe and Australia.   

St. Jude’s Cardiovascular division (roughly 20% of annual sales) deals with vascular closure devices, angiography catheters, guidewires, hemostasis introducers and mechanical and tissue heart valve replacement and repair products.

The acquisition of cardiac devices maker AGA Medical has considerably strengthened St. Jude’s Cardiovascular franchise, providing it with the opportunity to expand into fast-growing new therapy areas beyond the legacy ICD and pacemaker markets. Revenues from the division are growing at a solid double-digit pace boosted by the contributions from AGA Medical. We are currently Neutral on St. Jude, which is in line with a short-term Zacks #3 Rank (Hold).

 
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