CE Mark for St. Jude's EnligHTN - Analyst Blog

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St. Jude Medical Inc. ( STJ ) has received CE Mark approval for its EnligHTN renal denervation system for treating patients ailing from hypertension. The company launched the product during the EuroPCR 2012.

The unique multi-electrode system is a specialized ablation procedure used to control systolic blood pressure in patients not responding to conventional medical treatments. The radiofrequency energy from the ablation catheter forms tiny abrasions on the renal sympathetic nerves, which in turn interrupts nerve supply. This interruption helps in lowering systolic blood pressure and hence minimizes the risk of cardiovascular death.

Physicians at St. Jude's cardiovascular unit believe that this alternative form of treatment of resistant hypertension represents a significant advancement in the field of medical science. Hypertension affects approximately 1 billion people worldwide at an estimated annual health care expenditure of roughly $500 billion. EnligHTN, the first multi-electrode ablation catheter in the medical device industry, is expected to enhance clinical accuracy and reduce procedural time.

In the most recent quarter, St. Jude's net revenues rose 1% (up 2% in constant currency) to $1,395 million. Healthy growth across the company's smaller Atrial Fibrillation (AF) and Neuromodulation segments were largely offset by the decline in the core CRM segment.

Revenues from the Cardiovascular segment moved up 3%, both in terms of reported and constant currency, to $336 million. Within Cardiovascular, structural heart devices sales increased 8% to $155 million offset by lower revenues from vascular offerings, which fell 2% year over year to $181 million.

St. Jude is consistently recording revenue growth and positive earnings surprises over the past several quarters. We are impressed by its solid fundamentals, healthy growth trajectory, strong product mix, robust pipeline and cost management initiatives.

While a host of new growth drivers (including new products and emerging markets) are expected to boost results in 2012 and beyond, we remain cautious about increased competition, a still soft CRM market and the dilutive impact of acquisitions.

A still choppy CRM space overhangs on St. Jude and its peers Medtronic ( MDT ) and Boston Scientific ( BSX ). Our long-term Neutral recommendation on St. Jude is in agreement with a short-term Zacks #3 Rank (Hold).

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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 Nasdaq, Inc.

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

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