St. Jude Battling Supplier Over Durata Lead Insulation

AorTech International plc, a Scottish company that manufactures insulation for St. Jude Medical Inc.’s Durata lead wires, is accusing St. Jude of breaching their contract. AorTech has served St. Jude a rectification notice that accuses the company of material breaches. AorTech is giving St. Jude 30 days to correct the breaches, but company officials are not convinced the breaches can be corrected.

If AorTech is not satisfied after 30 days, the company can end its relationship with St. Jude.

AorTech specializes in biostable implantable polymers used in cardiology, orthopedic and urological applications. Products include pacing leads, cardiac cannulas, stents and implantable sensor technology. St. Jude is AorTech’s largest existing contract.

“The allegations raised by AorTech are without merit,” said a St. Jude company spokesperson. “The rectification notice St. Jude Medical has received from AorTech is based on inaccuracies and misrepresentations, and we will vigorously defend against these claims. St. Jude Medical has a sufficient supply of inventory from AorTech to continue manufacturing Optim-insulated leads and we have adopted other contingencies that will prevent any supply disruptions of Optim in the future. The manufacture and supply of our Optim-insulated leads will not be interrupted.”

AorTech officials acknowledge that St. Jude still would be able to manufacture polymers if their relationship ends, but assert that the company no longer will have rights to Aortech’s intellectual property and “know-how” to make proprietary AorTech materials.

Meanwhile, just last month AorTech informed shareholders that it had failed to attract a buyer for the company. Instead, the company received offers for various segments of its business, including its polymer business. In the letter to shareholders, however, the company said there was “no guarantee the transaction can be consummated.”

St. Jude has been unable to escape trouble with its defibrillator lead wires. From the accusation that its Riata leads caused death in patients, to doubts about the insulation of the Durata leads, the St. Paul, Minn.-based company has been tripping up with this product. St. Jude is a major supplier of medical devices across a range of applications.