St. Jude's New Customer
St. Jude thinks that a single specialist, the electrophysiologist, will make the purchasing decisions for arrhythmias, buying from the company with the most interesting technologies. St. Jude's recent deals are designed to make sure it's on the EP'sradar screen.
You may also be interested in...
The ICD market in cardiac rhythm management has been one of the medical device industry's fastest growing markets over the past several years. Yet for all its success, only about 20% of the patients who could benefit from an ICD get one. Why is that? Officials from Cameron Health argue that the complexity of current devices frustrate many cardiologists and force them to hand patients over to electrophysiologists, a move that they often resist. Now, Cameron hopes to blow open the untapped portion of the market with a device that is simpler to use, one that cardiologists will feel comfortable implanting.
It's not unusual for medical device firms to buy overseas distributors who have been successful in selling their products. But in the case of St. Jude and Getz Brothers, the deal raises questions about both companies' future relationships with past partners.
In the early 1990s, St. Jude Medical was the market leader in its sole product area: mechanical heart valves, which placed it among the most profitable of device companies. Demographics, however, limited heart valves' future growth opportunities and St. Jude needed to diversify, moving into cardiac rhythm management (CRM), cardiology catheters, and vascular access devices, while also expanding in cardiac surgery. The diversification process went anything but smoothly, the company missed its numbers, and investors were quick to punish St. Jude for its integration missteps. In the past year, however, the company has become one of Wall Street's few device darlings, ranking number one in 2000 for returns among device stocks. The company's growth is largely the result of sticking to a strategy that has St. Jude well-positioned in CRM's traditional markets, while also poised to pursue huge new opportunities in atrial fibrillation and, to a lesser degree, congestive heart failure. And St. Jude has not forgotten its base: cardiac surgery, where the company has introduced new sutureless anastomotic technology for minimally invasive coronary bypass surgery.