Global medical device company,
St. Jude Medical Inc.
) completed its acquisition of privately-held CardioMEMS, Inc. -
the developer of the CardioMEMS Heart Failure (HF) System. The
buyout followed the recent U.S. Food and Drug Administration (FDA)
approval of the device.
In Sep 2010, STJ 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, STJ immediately exercised its option to
acquire the Atlanta-based company.
The CardioMEMS HF System
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.
A miniature wireless sensor that is threaded into the pulmonary
artery is used to track the level of pressure borne by
heart-failure patients. The implantable device is designed to
detect early signals of rising pressure and worsening heart
failure. Patients can wirelessly transmit the readings to their
doctor who can proactively manage medications and other treatment
options to avoid a crisis that could result in hospitalization.
The FDA approved CardioMEMS' HF System based on a study of patients
with Class III heart failure who had been hospitalized in the
previous 12 months.
The study found that monitoring the amount of pressure in the
pulmonary artery via the implanted device lowered hospitalization
rates for heart failure by 28% at six months and 37% after an
average of 15 months.
The FDA held that there is reasonable assurance that the device is
safe and effective for heart failure management. Nevertheless, the
agency requires the company to conduct a thorough post-approval
study to ensure no unexpected risks or performance problems emerge
when the device is used outside a clinical trial.
The CardioMEMS HF System already enjoys CE Mark approval in the EU.
STJ now plans to initiate the system's strategic launch in the U.S.
STJ continues to provide innovative medical device solutions that
ease the complexities of diseases like heart failure, both for
patients and health care systems. The CardioMEMS HF System has set
a new treatment paradigm for heart failure that reduces the need
for hospitalizations and improves the quality of life for patients.
With the closure of the CardioMEMS acquisition, STJ expects
accelerated growth in its cardiovascular segment. In its recent
first-quarter earnings release, STJ stated that it expects the
monitoring system to generate $15-$20 million in sales in 2014.
Currently, STJ retains a Zacks Rank #3 (Hold). Some better-ranked
medical product stocks worth considering are
Eagle Pharmaceuticals Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
ST JUDE MEDICAL (STJ): Free Stock Analysis
EAGLE PHARMACT (EGRX): Free Stock Analysis
NEUROMETRIX INC (NURO): Free Stock Analysis
CARDICA INC (CRDC): Free Stock Analysis Report
To read this article on Zacks.com click here.