St. Jude's Approvals Further Roil CRT Market
The already hotly-contested high-voltage cardiac resynchronization therapy defibrillator (CRT-D) device market became even more competitive at the end of June with the long-anticipated FDA approval of two systems from St. Jude Medical Inc.
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Last summer, when St. Jude Medical announced that the company was creating a new division dedicated exclusively to interventional cardiology, the question was when would St. Jude do its first deal in that space. The answer came recently with St. Jude's acquisition of Velocimed.
St. Jude Medical's recent announcement that it will acquire Endocardial Solutions represents the latest step in St. Jude's aggressive strategy to become a dominant player in the atrial fibrillation (AF) market.
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.