QUOTE AND NEWS
StreetInsider.com  4 hrs ago  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/St.+Jude+Medical%2C+Inc.+%28STJ%29+Prot%C3%A9g%C3%A9+IPG+Approved+by+U.S.+FDA/9353112.html for the full story.
newratings.com  Mar 24  Comment 
WASHINGTON (dpa-AFX) - St. Jude Medical Inc. (STJ) announced Monday that it has received approval from the U.S. Food and Drug Administration or FDA for the Allure Quadra Cardiac Resynchronization Therapy Pacemaker or CRT-P, which provides...
StreetInsider.com  Mar 24  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/St.+Jude+Medical+%28STJ%29+Launches+Optisure+Defibrillation+Lead+Globally/9308383.html for the full story.
StreetInsider.com  Mar 20  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/St.+Jude+Medical+%28STJ%29+Receives+CE+Mark+for+Prodigy+CPS+w+BT%3B+Launches+in+Europe/9300813.html for the full story.
SeekingAlpha  Mar 19  Comment 
By SA Editor Miriam Metzinger: Stocks discussed on the Lightning Round segment of Jim Cramer's Mad Money Program, Tuesday March 18. Bullish Calls: Vodafone (VOD): "It has a great opportunity and impressive management. What's not to...
StreetInsider.com  Mar 18  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/St.+Jude+Medical+%28STJ%29+Announces+First+Enrollments+in+LEADLESS+Pacemaker+Observational+Study/9291228.html for the full story.
TheStreet.com  Mar 4  Comment 
NEW YORK (TheStreet) -- There isn't much a company can do when investors have fallen in love with their stock. Shares of St. Jude Medical have soared close to 40% over the past six months, management has done nothing to taper the optimism. This...
StreetInsider.com  Feb 24  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/St.+Jude+Medical%2C+Inc.+%28STJ%29+Raises+Quarterly+Dividend+8%25+to+%240.27%3B+1.6%25+Yield/9205643.html for the full story.
TheStreet.com  Feb 22  Comment 
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. NEW YORK (TheStreet) -- Every night, Jim Cramer sits down with CEOs and executives on his "Mad Money" show to discuss their business, the...
Benzinga  Feb 10  Comment 
In a report published Monday, Morgan Stanley analyst David R. Lewis reiterated an Overweight rating and $75.00 price target on St. Jude Medical (NYSE: STJ). In the report, Morgan Stanley noted, “End market stability and pipeline catalysts...




 
TOP CONTRIBUTORS

St. Jude Medical (NYSE:STJ) makes devices for cardiovascular and neurological conditions, including mechanical heart valves, pacemakers, and catheters. The company generates the majority of its revenue from its Cardiac Rhythm Management (CRM) division, which makes implantable cardiac rhythm devices (ICDs) and pacemakers. The company earned $4.7 billion in revenue and $777 million in 2009.[1]

St. Jude is dependent on the market for implantable cardiac defibrillators; roughly one-third of the company's revenue came from its ICD business. Sales of ICDs have have stagnated in recent years. Several studies suggest that a majority of patients eligible to receive ICDs don't actually receive referrals for the devices from their doctors, implying that the market for ICDs may be smaller than initially estimated by ICD manufacturers.

Company Overview

Business Segments[2]

St. Jude has four main business segments: Cardiac Rhythm Management (CRM), Cardiovascular, Neuromodulation, and Atrial Fibrillation.

  • Cardiac Rhythm Management (59% of net sales) includes two main products -- Implantable Cardiac Rhythm Devices (ICDs) and pacemakers. ICDs treat patients with hearts that beat inappropriately fast and pacemakers treat patients with hearts that beat too slowly. These devices are in patients suffering from lethal heart conditions such as sudden cardiac arrest.
  • Cardiovascular (20% of net sales) focuses on both cardiology and cardiac surgery therapy areas. This segment includes products such as heart valves and heart valve repair products, which are used during heart valve surgeries. St. Jude mechanical heart valves have been implanted in over 1.8 million patients worldwide.
  • Atrial Fibrillation (AF) (14% of net sales) is a rapid and inconsistent heart rhythm that occurs in the heart. People suffering from AF may experience fatigue and shortness of breath, and AF has been shown to increase the risk of stroke. St. Jude has a line of AF products such as catheters and 3D hearth mapping system which help physicians diagnose and treat irregular heart rhythms.
  • Neuromodulation (7% of net sales) is generally used to manage sharp, intense and constant pain from nerve damage or nervous system disorders. It basically applies pacemaker-like technology to treat diseases such as chronic pain, Parkinson's, and epilepsy.

Business Growth

FY 2009 (ended January 2, 2010)[1]

  • Net sales increased 7.2% to $4.7 billion. Net sales increased in all of the company's business segments.
  • Net income more than doubled to $777 million.

Trends and Forces

Medicare approval drives neuromodulation segment

Health coverage is an important determining factor when patients and doctors choose among various treatment options. Medicare coverage is particularly significant in that it directly affects over forty million Americans, how much patients have to pay for St. Jude's products, and how much the company will receive in payments from Medicare. Medicare and other third party payors are emphasizing more cost-effective medical devices, by limiting the reimbursement they will cover. Furthermore, even if a new medical device is cleared by the FDA, St. Jude faces limited demand for the device until Medicare and other payors approve the device for reimbursement.

Saturation of Implantable Cardiac Rhythm Devices (ICD) Market

ICDs are stopwatch-sized devices that monitor the heart and deliver appropriate therapy when an abnormal heart rhythm is detected. St. Jude is the second largest producer of ICDs with 20% market share for ICDs and over $1.5 billion in ICD sales.[3] ICDs usage has grown substantially over the years, due to trial results which showed ICDs reduced death by 23% in people with moderate heart failure compared to those who did not receive ICDs. Analysts are concerned, however, that initial market estimates of market size may have been over stated. Growth has been well below industry projections and a study suggests that only one in four patients that are eligible for the device actually receive referrals from their primary care physicians .[4]


Competition

St. Jude faces competitors in each of its business segments:[5]

Cardiac Rhythm Management (CRM)

St. Jude is one of the three principal manufacturers and suppliers in the global Cardiac Rhythm Management (CRM) market. The company's two larger competitors in this market are:

Atrial Fibrillation Therapy

The atrial fibrillation therapy area is broadening to include multiple therapy methods that include drugs, delivery of diagnostic and ablation catheters, and implantable fibrillators among others. The company's primary competitors include:

Neuromodulation

In the neuromodulation market, St. Jude is one of three principal manufacturers of nerustimulation devices. The principal competitors are Boston Scientific (BSX) and Medtronic (MDT). The company also faces competition from smaller competitors:

References

  1. 1.0 1.1 STJ 2009 10-K "Consolidated Statements of Earnings" pg. 24
  2. STJ 2009 10-K "Principal Products" pg. 1-7
  3. STJ 2009 10-K Exhibit 13 "Cardiac Rhythm Management" pg. 7
  4. U.S. Department of Health and Human Services, Experts Debate Limits on Implanted Defibrillator Use
  5. STJ 2009 10-K "Competition" pg. 7-8
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