07.23.08
$3.8 Billion
Daniel J. Starks, Chairman, President and CEO
John C. Heinmiller, Exec. VP and CFO
Joseph H. McCullough, Group President
Michael T. Rousseau, Group President
Eric S. Fain, President, CRM Division
Christopher G. Chavez, President, ANS Division
Frank J. Callaghan, President, Cardiovascular Division
Jane J. Song, President, Atrial Fibrillation Division
St. Jude Medical may not top MPO’s “Top Companies” list in terms of net sales, but it can brag about a different impressive accolade: For the second consecutive year, Fortune magazine recently named the company the top-ranked medical and other precision equipment company. Indeed, reputation is key for any medical device manufacturer, and in spite of all the challenges 2007 brought to all the players in the cardiac rhythm management (CRM) market, St. Jude still managed to raise net sales 14% from $3.3 billion in 2006 to $3.78 billion in 2007 and grow cash flow from operations by 33% (from $648.8 million in 2006 to $865.6 million in 2007). Along its upward climb, the device manufacturer even managed to record fourth-quarter revenues topping $1 billion—a first for the company.
The success story was fueled by investments in new people, products and programs, with approximately 13% of sales allocated to R&D, according to Daniel J. Starks, St. Jude’s chairman, president and CEO. More than 20 new products were introduced in the company’s lines of implantable cardioverter defibrillators (ICDs) and pacemakers alone.
Revenues for the CRM division were $2.37 billion in 2007, a 15% increase from 2006. Among the contributors were new introductions such as Current and Promote, St. Jude’s first radiofrequency wireless devices to treat heart failure and arrhythmias. CRM also saw US and European approvals of the Zephyr pacemaker, which automatically performs standard follow-up testing; US approval of the Merlin.net Patient Care Network, a Web-based remote monitoring system for patient device data; launches of the Atlas+ HF CRT-D and Epic HF CRT-D heart failure devices in Japan; and expansions in the company’s high-voltage leads for heart failure devices.
Although the global ICD market has suffered in recent years after a slew of product recalls, Stark said the company believes the growth rate ultimately will improve in the United States (if not elsewhere), and St. Jude will continue to roll out new ICD products in the future—that strategy focus is bolstered by the knowledge that ICD and pacemaker sales were leading contributors of the company’s double-digit net sales growth in 2007. ICD sales grew nearly 19% to $1.3 billion in 2007, while pacemaker sales grew 11% to approximately $1.06 billion, compared with 2006. US-based ICD sales grew 11% to $887.8 million, and international sales grew nearly 38% to $417.1 million. Pacemaker sales in the United States totaled $507.9 million, a 9% gain from 2006; international sales grew 13% to $555.3 million in 2007.
The Atrial Fibrillation (AF) unit, meanwhile, had revenue increases of 26% to an approximate total of $410.7 million, compared with $325.7 million in 2006. Among the various regulatory approvals for AF technologies used in the diagnosis and treatment of arrhythmias was US and European clearance for St. Jude’s EnSite System Version 7 (which later was followed by approval in both regions for the EnSite Fusion Registration Module) used during electrophysiology procedures.
Neuromodulation is another area showing great promise for St. Jude Medical in years to come, and the company reported that its sales force additions and expanded geographic footprint led to increased sales for its Advanced Neuromodulation Systems division, with revenue growth of 17% to $209.9 million for 2007. Some of the notable introductions included enhancements to the Eon Neurostimulation System with NeuroDynamix technology, which was integrated with Rapid Programmer 3.1 to provide customized, targeted pain coverage; the company also received FDA approval for the Lamitrode Tripole 16C paddle leads for low-back pain. A large focus for the Neuromodular group moving forward will be its clinical trial evaluating deep brain stimulation for the treatment of depression; other trials also are being held to evaluate this technology for Parkinson’s disease, essential tremor and migraines, among other indications.
One of the largest changes made in 2007 was St. Jude’s move to combine its cardiac surgery and cardiology businesses into one unit, now known as the Cardiac Division. Sales of cardiovascular products increased nearly 7% to $790.6 million, compared with $741.6 million in 2006. One area of interest in this unit is in a new stented pericardial tissue valve, which began US investigational device exemption clinical trials in 2007. This follows on the heels of strong volume growth for St. Jude’s tissue heart valves. Net sales of vascular closure devices grew 4% for the year, due in part to increase sales of the company’s Angio-Seal product.
For all units combined, the United States captured the lion’s share of sales at $2.1 billion, while Europe, Japan and Asia-Pacific markets had total net sales of $937 million, $322 million and $193 million, respectively.
In all these regions, physician customers will see a new side of St. Jude Medical as 2008 progresses. Physicians attending the 88th Annual Meeting of the American Association of Thoracic Surgery in May were the first to see St. Jude’s unveiling of its new corporate brand identity, designed to communicate the company’s mission to develop products and services that put more control into the hands of those who treat cardiac, neurological and chronic pain patients. A new logo fashioned with eight small squares organized into a larger square, with an unaligned ninth square in the middle, is intended to evoke the risks present in any medical procedure (ie, the ninth square) and the company’s commitment to helping doctors control those risks (ie, the surrounding squares).
Branding initiatives aside, new product rollouts will continue to dominate in 2008, as evidenced by clearance in May by the FDA and Europe officials for St. Jude’s CPS Duo stylet and guidewire system, as well as the CPS Courier guidewire—not to mention FDA approval for the Mond stylet. In April, the company also announced an agreement to acquire EP MedSystems, Inc., a provider of CRM and AF products, for $92.1 million.
Indeed, the company is on a roll, with the first quarter of 2008 surpassing the $1 billion mark for the second consecutive quarter. With total net sales of $1.01 billion for the quarter, sales increased 14% compared with the same quarter in 2007. CRM products increased 15% compared with a year ago, while ICD, pacemaker, AF, and neuromodulation sales grew 20%, 10%, 28% and 8%, respectively.
KEY EXECUTIVES:
Daniel J. Starks, Chairman, President and CEO
John C. Heinmiller, Exec. VP and CFO
Joseph H. McCullough, Group President
Michael T. Rousseau, Group President
Eric S. Fain, President, CRM Division
Christopher G. Chavez, President, ANS Division
Frank J. Callaghan, President, Cardiovascular Division
Jane J. Song, President, Atrial Fibrillation Division
NO. OF EMPLOYEES:
12,000GLOBAL HEADQUARTERS:
St. Paul, MNSt. Jude Medical may not top MPO’s “Top Companies” list in terms of net sales, but it can brag about a different impressive accolade: For the second consecutive year, Fortune magazine recently named the company the top-ranked medical and other precision equipment company. Indeed, reputation is key for any medical device manufacturer, and in spite of all the challenges 2007 brought to all the players in the cardiac rhythm management (CRM) market, St. Jude still managed to raise net sales 14% from $3.3 billion in 2006 to $3.78 billion in 2007 and grow cash flow from operations by 33% (from $648.8 million in 2006 to $865.6 million in 2007). Along its upward climb, the device manufacturer even managed to record fourth-quarter revenues topping $1 billion—a first for the company.
The success story was fueled by investments in new people, products and programs, with approximately 13% of sales allocated to R&D, according to Daniel J. Starks, St. Jude’s chairman, president and CEO. More than 20 new products were introduced in the company’s lines of implantable cardioverter defibrillators (ICDs) and pacemakers alone.
Revenues for the CRM division were $2.37 billion in 2007, a 15% increase from 2006. Among the contributors were new introductions such as Current and Promote, St. Jude’s first radiofrequency wireless devices to treat heart failure and arrhythmias. CRM also saw US and European approvals of the Zephyr pacemaker, which automatically performs standard follow-up testing; US approval of the Merlin.net Patient Care Network, a Web-based remote monitoring system for patient device data; launches of the Atlas+ HF CRT-D and Epic HF CRT-D heart failure devices in Japan; and expansions in the company’s high-voltage leads for heart failure devices.
Although the global ICD market has suffered in recent years after a slew of product recalls, Stark said the company believes the growth rate ultimately will improve in the United States (if not elsewhere), and St. Jude will continue to roll out new ICD products in the future—that strategy focus is bolstered by the knowledge that ICD and pacemaker sales were leading contributors of the company’s double-digit net sales growth in 2007. ICD sales grew nearly 19% to $1.3 billion in 2007, while pacemaker sales grew 11% to approximately $1.06 billion, compared with 2006. US-based ICD sales grew 11% to $887.8 million, and international sales grew nearly 38% to $417.1 million. Pacemaker sales in the United States totaled $507.9 million, a 9% gain from 2006; international sales grew 13% to $555.3 million in 2007.
The Atrial Fibrillation (AF) unit, meanwhile, had revenue increases of 26% to an approximate total of $410.7 million, compared with $325.7 million in 2006. Among the various regulatory approvals for AF technologies used in the diagnosis and treatment of arrhythmias was US and European clearance for St. Jude’s EnSite System Version 7 (which later was followed by approval in both regions for the EnSite Fusion Registration Module) used during electrophysiology procedures.
Neuromodulation is another area showing great promise for St. Jude Medical in years to come, and the company reported that its sales force additions and expanded geographic footprint led to increased sales for its Advanced Neuromodulation Systems division, with revenue growth of 17% to $209.9 million for 2007. Some of the notable introductions included enhancements to the Eon Neurostimulation System with NeuroDynamix technology, which was integrated with Rapid Programmer 3.1 to provide customized, targeted pain coverage; the company also received FDA approval for the Lamitrode Tripole 16C paddle leads for low-back pain. A large focus for the Neuromodular group moving forward will be its clinical trial evaluating deep brain stimulation for the treatment of depression; other trials also are being held to evaluate this technology for Parkinson’s disease, essential tremor and migraines, among other indications.
One of the largest changes made in 2007 was St. Jude’s move to combine its cardiac surgery and cardiology businesses into one unit, now known as the Cardiac Division. Sales of cardiovascular products increased nearly 7% to $790.6 million, compared with $741.6 million in 2006. One area of interest in this unit is in a new stented pericardial tissue valve, which began US investigational device exemption clinical trials in 2007. This follows on the heels of strong volume growth for St. Jude’s tissue heart valves. Net sales of vascular closure devices grew 4% for the year, due in part to increase sales of the company’s Angio-Seal product.
For all units combined, the United States captured the lion’s share of sales at $2.1 billion, while Europe, Japan and Asia-Pacific markets had total net sales of $937 million, $322 million and $193 million, respectively.
In all these regions, physician customers will see a new side of St. Jude Medical as 2008 progresses. Physicians attending the 88th Annual Meeting of the American Association of Thoracic Surgery in May were the first to see St. Jude’s unveiling of its new corporate brand identity, designed to communicate the company’s mission to develop products and services that put more control into the hands of those who treat cardiac, neurological and chronic pain patients. A new logo fashioned with eight small squares organized into a larger square, with an unaligned ninth square in the middle, is intended to evoke the risks present in any medical procedure (ie, the ninth square) and the company’s commitment to helping doctors control those risks (ie, the surrounding squares).
Branding initiatives aside, new product rollouts will continue to dominate in 2008, as evidenced by clearance in May by the FDA and Europe officials for St. Jude’s CPS Duo stylet and guidewire system, as well as the CPS Courier guidewire—not to mention FDA approval for the Mond stylet. In April, the company also announced an agreement to acquire EP MedSystems, Inc., a provider of CRM and AF products, for $92.1 million.
Indeed, the company is on a roll, with the first quarter of 2008 surpassing the $1 billion mark for the second consecutive quarter. With total net sales of $1.01 billion for the quarter, sales increased 14% compared with the same quarter in 2007. CRM products increased 15% compared with a year ago, while ICD, pacemaker, AF, and neuromodulation sales grew 20%, 10%, 28% and 8%, respectively.