STJ ST. Jude Medical, Inc.

St. Jude Medical (STJ), one of the top-tier medical devices companies, has announced positive results from the first controlled study of its deep brain stimulation (“DBS”) systems geared for the treatment of Parkinson’s disease. The data, published in The Lancet Neurology journal, confirmed the benefits of the company’s DBS constant current systems in patients with this debilitating condition.

DBS therapy is used to treat the symptoms of Parkinson’s disease, a neurological disorder that gradually reduces a person's control over movements and speech. Roughly 6.3 million people globally are afflicted by this disease. According to the National Parkinson Foundation, Parkinson’s disease affects over 1 million people in the U.S.

DBS uses mild electrical pulses from a neurostimulator (an implanted device) to stimulate specific targets in the brain. The U.S. market for DBS systems is estimated to reach roughly $1.4 billion by 2012.

The goal of the controlled study was to assess St. Jude’s Libra and LibraXP DBS constant current systems to determine their safety and effectiveness in managing the symptoms of Parkinson’s disease. These neurostimulators are currently approved for use in Europe, Latin America and Australia for managing the symptoms of Parkinson’s disease.

The trial, which enrolled 136 patients and was conducted at 15 centers across the U.S., was designed to compare patients implanted with DBS systems with those without stimulation. The published results demonstrated statistically significant increases in symptom control and improved quality of life. Moreover, there was a statistically significant decline in the amount of medications needed to manage disease symptoms in the patients receiving stimulation compared to the group without stimulation.

St. Jude’s Neuromodulation division, which was formed through its acquisition of Advanced Neuromodulation Systems in November 2005, offers various neurostimulation systems. The company is one of the three major manufacturers of neurostimulation devices along with Medtronic (MDT) and Boston Scientific (BSX).

Neuromodulation represents a lucrative platform for St. Jude, which offers its spinal cord stimulators and DBS systems in this nascent but fast-growing market. More than 75,000 patients across 40 countries have been implanted with the company’s neurostimulation devices.

The neurostimulation market is growing at a healthy pace driven by growth in age-related neurological conditions and significant need for effective alternative therapies. This market is forecast to grow 15% annually, offering a compelling opportunity for the incumbent players.

We believe that growth in St. Jude’s Neuromodulation franchise will be fostered by the adoption of DBS systems and sustained uptake of the Eon Mini implantable neurostimulator. Currently, we have a Neutral recommendation on the stock, which is supported by a short-term Zacks #3 Rank (Hold).

 
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