St. Jude Medical Inc.
) revealed that it will acquire privately held chronic pain
solutions maker NeuroTherm for cash payment of roughly $200
million. The acquisition will boost St. Jude Medical's chronic pain
portfolio as NeuroTherm uses minimally invasive radiofrequency
ablation (RFA) for treating spinal pain, which the company does not
RFA is 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, it helps destroy the ability of the
nerves to send pain signals to the brain, a process known as
ablating the nerves.
RFA technique is used for over 25 years for interventional pain
therapy to 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 uses multi-lesion RF generator for continuous delivery
of energy to each site resulting in complete treatment of each
targeted spinal nerve. 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 expects to complete the acquisition by the end of
the third quarter. The acquisition of NeuroTherm is expected to
contribute $10 to $15 million to St. Jude Medical's sales in 2014.
Further, 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
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
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.
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 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 Estimate for earnings per
share and revenues for the year are pegged at $3.98 and $5,701
Currently, St. Jude Medical carries a Zacks Rank #2 (Buy). Some
better-ranked stocks in the medical products industry include
OraSure Technologies, Inc.
). Both Hospira and OraSure Technologies sport a Zacks Rank #1
(Strong Buy), while CareFusion carries the same rank as St. Jude
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