St. Jude Medical (STJ): Heart Device Failure Linked to Two Deaths
Shares of St. Jude Medical, Inc. (STJ) were trading down $2.43 (-3%) to $78.85 per share in Tuesday’s premarket after the company issued a warning early this morning that some of its heart devices were at risk of premature battery depletion, which was linked to two deaths.
This likely won't spiral out of controlMinnesota based St. Jude Medical Inc. was founded in 1976 to develop bi-leaflet artificial heart valves originally devised at the University of Minnesota in 1972.
The company has since become a major transnational medical device company with more than 20 main manufacturing and operations facilities worldwide, marketing its products in over 100 countries in the Americas, Europe and Asia.
The company received a $25 billion bid from Abbott Laboratories (ABT) in April.
The warning by St. Jude, which was released earlier today, said that some of the company’s implanted heart devices carried a risk of early battery depletion, which was linked to two patient deaths and may require the replacement of some of the devices.
The letter noted that this type of problem with the lithium batteries that run the devices was rare and could be detected by patients with battery monitoring tools from their homes.
St. Jude said that from 400,000 devices manufactured through May of last year, the company had found 841 implanted cardioverter defibrillators that had lithium clusters which form after the device sends electricity to the heart.
Still, St. Jude is doing damage controlIn a letter to physicians, St. Jude Vice President of Quality Control Jeff Fecho stated that, “There have been two deaths that have been associated with the loss of defibrillation therapy as a result of premature battery depletion."
The company’s Chief Medical Officer Mark Carlson said in a statement that, “We encourage any patient with questions about their medical device to contact their doctor,” He added that, “While this risk is very small, we have provided doctors with information so that they can discuss the most appropriate course of action for each individual patient”.
St. Jude advised physicians to immediately replace the devices with damaged batteries, but warned against replacing devices which were operating normally due to the potential complications associated with those procedures.
The company launched a website today as a result of the battery issue, where patients could find out which devices were affected.
The news was first disseminated late Monday by short selling firm Muddy Waters that tweeted a copy of the advisory directed at physicians on the issue. St. Jude has denied allegations by Muddy Waters and research firm MedSec Holding Inc. which are currently under investigation for the claims by the U.S. Food and Drug Administration.
St. Jude denied the allegations and is suing both companies, alleging they disseminated the information to influence the company’s stock price.
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