St. Jude Medical Completes Acquiring Pain Solutions Maker - Analyst Blog

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St. Jude Medical Inc. ( STJ ) revealed that it has completed acquiring privately held chronic pain solutions maker NeuroTherm for cash payment of roughly $200 million. However, shares of St. Jude Medical slid 2.6% following the announcement till the last trading session.

The acquisition boosted St. Jude Medical's chronic pain portfolio and made it the only medical device producer with a chronic pain portfolio that offers both radiofrequency ablation (RFA) for spinal pain and spinal cord stimulation.

NeuroTherm uses minimally invasive RFA, a medical procedure aimed at reducing back pain by pinpoint application of heat using radio frequency waves on nerves around the facet joints. With this, the method helps destroying the ability of the nerves to send pain signals to the brain, a process known as ablating the nerves.

RFA technique is being used for over 25 years for interventional pain therapy for chronic pain patients. About 1.5 billion people around the world suffer from chronic pain. Last year, there were 230 million patients in the U.S. suffering from chronic pain.

NeuroTherm's products are available in more than 65 countries. Its facilities are located in the metro-Boston area, Amsterdam, Dusseldorf, and London.

St. Jude Medical had previously revealed that the acquisition of NeuroTherm is expected to contribute $10 to $15 million its sales in 2014. The acquisition is expected to be neutral to St. Jude Medical's earnings per share in 2014 but accretive thereafter.

Recently, St. Paul, MN-based St. Jude Medical also completed its acquisition of privately-held CardioMEMS, Inc. following the U.S. Food and Drug Administration (FDA) clearance of the CardioMEMS HF System in May this year. With the closure of the CardioMEMS acquisition, St. Jude Medical expects accelerated growth in its cardiovascular segment.

The CardioMEMS HF System is a first-of-its-kind FDA-approved heart failure monitoring device that has been proven to significantly reduce heart failure-related hospitalizations. It has set a new treatment paradigm for heart failure that reduces the need for hospitalizations.

The CardioMEMS HF System has already obtained the CE Mark approval in the EU. St. Jude Medical now plans to initiate the system's strategic launch in the U.S.

Currently, St. Jude Medical carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry include Hospira Inc. ( HSP ), Medtronic, Inc. ( MDT ) and Symmetry Medical, Inc. ( SMA ). All of them carry a Zacks Rank #2 (Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MDT , HSP , STJ , SMA

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