Shares of major medical devices manufacturer
St. Jude Medical Inc.
) reached a new lifetime high of $71.90 in mid-day yesterday.
Shares of the company eventually closed at $70.32 on the same day,
reflecting a market cap of $19.9 billion.
The closing price representing a solid one-year return of 54.2%,
which is much higher than the S&P 500 return of roughly 25.0%
as well as returns of 22.9% and 39.0% depicted by the company's
Boston Scientific Corporation
Catalysts for Growth
Shares of St. Paul, MN-based St. Jude Medical started escalating
following the announcement of completing its acquisition of
privately-held CardioMEMS, Inc. at the beginning of last month.
With the closure of the CardioMEMS acquisition, St. Jude Medical
expects accelerated growth in its cardiovascular segment.
In Sep 2010, St. Jude Medical had acquired a 19% stake in
CardioMEMS for $60 million, with an exclusive option to buy the
remaining 81% of the company for $375 million. Following the FDA
clearance of the CardioMEMS HF System in May this year, St. Jude
Medical exercised its option to acquire the Atlanta-based company.
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 and improves the quality of life for patients.
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.
Recently, St. Jude Medical also received the 2014 Innovation Award
at Cardiostim 2014, the 19th World Congress in Cardiac
Electrophysiology and Cardiac Techniques for its Nanostim leadless
A congress committee of electrophysiologists has chosen St. Jude
Medical's Nanostim leadless pacemaker for the award being the most
innovative product in electrophysiology and cardiac technique.
The Nanostim leadless pacemaker measures less than 10% of the size
of a conventional pacemaker and can be implanted directly into the
heart by a non-surgical procedure (through femoral vein with a
steerable catheter), unlike conventional pacemakers, which require
a more invasive surgery.
Last year, Nanostim pacemaker obtained CE Mark approval in Europe.
After its approval, the pacemaker has been implanted in patients
located in the U.K., Germany, Italy, Czech Republic, France, Spain,
and the Netherlands.
St. Jude Medical posted a 4.3% rise in adjusted net earnings per
share to 96 cents for the first quarter of 2014 from 92 cents a
year-ago. With this, earnings beat the Zacks Consensus Estimate by
a penny and met the company's guidance of 94-96 cents per share for
Revenues grew about 2.0% to $1,363 million for the quarter,
exceeding the Zacks Consensus Estimate of $1,355 million as well as
the company's own guided range of 1,280 to $1,360 million.
Unfavorable foreign currency translation reduced revenues by
roughly $25 million.
For full year 2014, St. Jude Medical upgraded its revenues guidance
to the range of $5,610 to $5,760 million from the prior range of
$5,600 million to $5,750 million. It also upgraded its adjusted
earnings per share guidance to $3.95-$4.00 from the prior range of
$3.94-$3.99. The current Zacks Consensus Estimates for earnings per
share and revenues for the year are pegged at $3.98 and $5,700
Currently, St. Jude carries a Zacks Rank #3 (Hold). A better-ranked
stock in the medical products industry is
Nxstage Medical, Inc.
), which carries a Zacks Rank #1 (Strong Buy).
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