07.27.07
$3.3 Billion
Key Executives:
Daniel J. Starks, Chairman, President and CEO
John C. Heinmiller, Exec. VP and CFO
Christopher G. Chavez, President, Neuromodulation Division
Michael J. Coyle, President, CRM Division
George J. Fazio, President, Cardiovascular Division
Michael T. Rousseau, President, US Division
Jane J. Song, President, Atrial Fibrillation Division
No. of Employees: 11,000
World Headquarters: St. Paul, MN
St. Jude Medical continued its growth in 2006, besting 2005’s sales results by 13%. The St. Paul, MN-based manufacturer of cardiac and neuromodulation devices reported net sales of $3.3 billion for 2006 compared to $2.9 billion for the prior fiscal year. Net earnings for 2006 were $548 million, a significant increase compared to $393 million in 2005.
Despite recent increased scrutiny of implantable cardioverter defibrillator (ICD) devices by the FDA and in the press, St. Jude’s growth in 2006 continued to be fueled by its successful Cardiac Rhythm Management (CRM) division. The market for ICDs has slipped during the past few years after high-profile industry recalls, though analysts have predicted a rebound for 2007.
The CRM division accounted for roughly $2 billion—or 62%—of St. Jude’s total sales. Results for CRM—which includes ICD and pacemaker products—represented a 7% improvement in 2006 compared to 2005. St. Jude’s ICDs and pacemaker products grew 9% and 4% in net sales, respectively, for 2006. ICD product sales were $1.1 billion for 2006, while pacemakers were $956 million.
St. Jude now claims the No. 2 market share position for CRM products, behind market-leader Medtronic, following the purchase of Guidant by Boston Scientific. During an analyst meeting in February this year, Mike Coyle, CRM division president, predicted the ICD market would return to growth and that St. Jude would continue to gain market share. He also called the company’s performance “solid” in 2006 despite “difficult market conditions.”
St. Jude expects pacemaker market growth of 2% to 4% in 2007, in addition to 3% to 9% ICD market growth. Beginning in 2008, according to figures presented by Coyle at the meeting, the global ICD market should be capable of sustaining 10% to 15% growth over the balance of the decade, based on international market expansion, continued penetration in the United States as a primary prevention tool and expanding indications for ICD therapy globally, among others.
St. Jude’s three other divisions—Atrial Fibrillation, Neuromodulation and Cardiovascular—also reported sales growth. Atrial Fibrillation experienced a 28% increase to $326 million for 2006 compared to 2005. The company’s Advanced Neuromodulation Systems unit, which St. Jude acquired in 2005 for $1.3 billion, reported a 17% increase in sales to $179 million. The company’s Cardiac Surgery and Cardiology divisions—combined into a singular Cardiovascular Division at the beginning of this year—reported $741 million in product sales, a 4% increase compared to 2005. The division includes St. Jude’s line of vascular closure devices and heart valve products.
“Our cardiology and cardiac surgery businesses will be stronger together,” explained CEO Daniel Starks, adding that streamlining the businesses would allow the companies to take advantages of savings, boost operating efficiencies and invest more in research and development. “The creation of a new Cardiovascular division, together with the expansion of our sales force and recent new product introductions, are part of a comprehensive program to position St. Jude Medical to deliver a minimum 15% growth in 2007 and beyond,” Starks added.
In 2006, the company released more than 20 new products, calling it one of the most successful periods for new product releases in their history. Most notably, the FDA cleared or approved:
• Angio-Seal VIP, the next generation of the company’s vascular closure device
• Merlin Patient Care System, a universal programmer for ICDs and pacemakers
• Atlas II ICD and the Atlas II HF CRT-D (cardiac resynchronization therapy defibrillator)
• EnSite System 6 Software for Cardiac Mapping and Navigation, for 3-D cardiac models during an electrophysiology procedure. Physicians use the models to collect information about the heart’s electrical activity and assist in diagnosing and treating many arrhythmias, including atrial fibrillation
Company officials are planning on that many or more launches for this year. Most recently, St. Jude received FDA approval for the Current ICD and Promote CRT-D, the company’s newest devices for treating patients with potentially lethal heart arrhythmias and heart failure. They are the first devices to be built on the company’s new consolidated hardware and software platform to support implantable cardiac devices.
Financially, fiscal 2007 already has started with double-digit growth. For the first quarter, ended April 17, St. Jude reported $887 million in net sales, an increase of 13%. ICD product sales ($302 million) for the first quarter of 2007 increased 15% compared to the same period last year, while pacemaker sales ($247 million) grew 12%. Sales of atrial fibrillation products continued to grow at impressive rates—up 26%. Early this year, St. Jude also initiated a repurchase program of up to $1 billion in common stock.
“The investments we made in new people, new products and new programs in 2006 already are beginning to favorably impact our results,” Starks said. “Over 75% of our revenue grew at double-digit rates during the quarter.”
Key Executives:
Daniel J. Starks, Chairman, President and CEO
John C. Heinmiller, Exec. VP and CFO
Christopher G. Chavez, President, Neuromodulation Division
Michael J. Coyle, President, CRM Division
George J. Fazio, President, Cardiovascular Division
Michael T. Rousseau, President, US Division
Jane J. Song, President, Atrial Fibrillation Division
No. of Employees: 11,000
World Headquarters: St. Paul, MN
St. Jude Medical continued its growth in 2006, besting 2005’s sales results by 13%. The St. Paul, MN-based manufacturer of cardiac and neuromodulation devices reported net sales of $3.3 billion for 2006 compared to $2.9 billion for the prior fiscal year. Net earnings for 2006 were $548 million, a significant increase compared to $393 million in 2005.
Despite recent increased scrutiny of implantable cardioverter defibrillator (ICD) devices by the FDA and in the press, St. Jude’s growth in 2006 continued to be fueled by its successful Cardiac Rhythm Management (CRM) division. The market for ICDs has slipped during the past few years after high-profile industry recalls, though analysts have predicted a rebound for 2007.
The CRM division accounted for roughly $2 billion—or 62%—of St. Jude’s total sales. Results for CRM—which includes ICD and pacemaker products—represented a 7% improvement in 2006 compared to 2005. St. Jude’s ICDs and pacemaker products grew 9% and 4% in net sales, respectively, for 2006. ICD product sales were $1.1 billion for 2006, while pacemakers were $956 million.
St. Jude now claims the No. 2 market share position for CRM products, behind market-leader Medtronic, following the purchase of Guidant by Boston Scientific. During an analyst meeting in February this year, Mike Coyle, CRM division president, predicted the ICD market would return to growth and that St. Jude would continue to gain market share. He also called the company’s performance “solid” in 2006 despite “difficult market conditions.”
St. Jude expects pacemaker market growth of 2% to 4% in 2007, in addition to 3% to 9% ICD market growth. Beginning in 2008, according to figures presented by Coyle at the meeting, the global ICD market should be capable of sustaining 10% to 15% growth over the balance of the decade, based on international market expansion, continued penetration in the United States as a primary prevention tool and expanding indications for ICD therapy globally, among others.
St. Jude’s three other divisions—Atrial Fibrillation, Neuromodulation and Cardiovascular—also reported sales growth. Atrial Fibrillation experienced a 28% increase to $326 million for 2006 compared to 2005. The company’s Advanced Neuromodulation Systems unit, which St. Jude acquired in 2005 for $1.3 billion, reported a 17% increase in sales to $179 million. The company’s Cardiac Surgery and Cardiology divisions—combined into a singular Cardiovascular Division at the beginning of this year—reported $741 million in product sales, a 4% increase compared to 2005. The division includes St. Jude’s line of vascular closure devices and heart valve products.
“Our cardiology and cardiac surgery businesses will be stronger together,” explained CEO Daniel Starks, adding that streamlining the businesses would allow the companies to take advantages of savings, boost operating efficiencies and invest more in research and development. “The creation of a new Cardiovascular division, together with the expansion of our sales force and recent new product introductions, are part of a comprehensive program to position St. Jude Medical to deliver a minimum 15% growth in 2007 and beyond,” Starks added.
In 2006, the company released more than 20 new products, calling it one of the most successful periods for new product releases in their history. Most notably, the FDA cleared or approved:
• Angio-Seal VIP, the next generation of the company’s vascular closure device
• Merlin Patient Care System, a universal programmer for ICDs and pacemakers
• Atlas II ICD and the Atlas II HF CRT-D (cardiac resynchronization therapy defibrillator)
• EnSite System 6 Software for Cardiac Mapping and Navigation, for 3-D cardiac models during an electrophysiology procedure. Physicians use the models to collect information about the heart’s electrical activity and assist in diagnosing and treating many arrhythmias, including atrial fibrillation
Company officials are planning on that many or more launches for this year. Most recently, St. Jude received FDA approval for the Current ICD and Promote CRT-D, the company’s newest devices for treating patients with potentially lethal heart arrhythmias and heart failure. They are the first devices to be built on the company’s new consolidated hardware and software platform to support implantable cardiac devices.
Financially, fiscal 2007 already has started with double-digit growth. For the first quarter, ended April 17, St. Jude reported $887 million in net sales, an increase of 13%. ICD product sales ($302 million) for the first quarter of 2007 increased 15% compared to the same period last year, while pacemaker sales ($247 million) grew 12%. Sales of atrial fibrillation products continued to grow at impressive rates—up 26%. Early this year, St. Jude also initiated a repurchase program of up to $1 billion in common stock.
“The investments we made in new people, new products and new programs in 2006 already are beginning to favorably impact our results,” Starks said. “Over 75% of our revenue grew at double-digit rates during the quarter.”