QUOTE AND NEWS
SeekingAlpha  Jul 27  Comment 
By SA Editor Miriam Metzinger: Stocks discussed on the Lightning Round segment of Jim Cramer's Mad Money Program, Friday July 25 Bullish Calls: Rite Aid (NYSE:RAD): "I still believe in RAD. I understand it is churning. I want to stay...
StreetInsider.com  Jul 22  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/St.+Jude+Medical%27s+%28STJ%29+FlexAbility+Ablation+Catheter+Receives+CE+Mark/9678128.html for the full story.
Motley Fool  Jul 17  Comment 
St. Jude Medical investors have been pleased with this company's progress over the past year, but did the device maker's Q2 shed light on this company's direction?
Motley Fool  Jul 16  Comment 
St. Jude Medical's momentum in CRM is proving more resilient than the skeptics would believe
Reuters  Jul 16  Comment 
Heart device maker St. Jude Medical Inc said it has no plans to jump on the consolidation bandwagon that has swept the healthcare sector in recent months and is not seeking the...
Benzinga  Jul 16  Comment 
Shares of St. Jude Medical (NYSE: ABT) are down 0.09 percent following its second-quarter earnings release. Below are some highlights and key takeaways from the company's conference call. Results and Growth: • Sales for the quarter...
SeekingAlpha  Jul 16  Comment 
St. Jude Medical Inc. (NYSE:STJ) Q2 2014 Results Earnings Conference Call July 16, 2014 8:00 AM ET Executives Dan Starks - Chief Executive Officer John Heinmiller - Executive Vice President Mike Rousseau - Chief Operating Officer ...
TheStreet.com  Jul 16  Comment 
NEW YORK (TheStreet) -- St. Jude Medical shares are down -0.7% to $67.79 on Wednesday despite positive second quarter earnings results that saw the cardiovascular medical device manufacturer report a 6% year over year earning increase to $1.02...
Motley Fool  Jul 16  Comment 
St. Jude Medical, Abbott Laboratories, Eli Lilly, and Pfizer are the top health care stocks to watch this morning.
Wall Street Journal  Jul 16  Comment 
St. Jude Medical said its second-quarter earnings more than doubled as the medical-device maker's revenue improved, though the year-earlier period was weighed down by debt-extinguishment costs.




 
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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