07.01.06
$2.9 Billion ($41.3B Total)
Key Executives:
Daniel J. Starks, Chairman, President and CEO
John C. Heinmiller, Executive Vice President and CFO
Michael J. Coyle, President, Cardiac Rhythm Management Division
Joseph H. McCullough, President, International Division
Michael T. Rousseau, President, US Division
No. of Employees: 10,000
World Headquarters: St. Paul, MN
St. Jude Medical, a manufacturer of cardiac and neuromodulation devices, had an extremely enviable 2005, with the largest improvement in sales seen by any of the companies on this list. With a robust 27% increase in sales, which reached $2.9 billion (compared with $2.3 billion in 2004), the company was on a major winning streak.
Nearly three quarters (73%) of that growth achieved (approximately $451 million) was attributed to the Cardiac Rhythm Management (CRM) division, which contributed $1 billion in sales from its implantable cardioverter defibrillators (ICDs) alone—marking an impressive 72% gain over 2004. With only very few other major players in the ICD market, St. Jude expects the division to grow an additional 20% over the next few years, aided by the launch of an estimated 20 new products in 2006.
Acquisitions over the course of 2005 played a pivotal role in St. Jude’s success. Believing that providing advanced atrial fibrillation products to electrophysiologists would help increase ICD sales, the company’s Atrial Fibrillation Division acquired Endocardial Solutions, Inc., a St. Paul, MN-based manufacturer of diagnostic systems, in January 2005 for $272 million.
Later, in April, St. Jude’s Cardiology Division acquired Maple Grove, MN-based Velocimed, LLC for $74 million. Founded in 2001, the company makes specialty interventional cardiology devices, with the following three product platforms: the Premere patent foramen ovale (PFO) closure system; the Proxis proximal embolic protection device; and the Venture guidewire control catheter for accessing difficult anatomy and crossing chronic total occlusions in interventional catheterization procedures.
With the $1 billion neuromodulation medical device market having experienced historic 20% growth over the last several years, the talk of the town in late 2005 was St. Jude’s Neuromodulation Division move to acquire Advanced Neuromodulation Systems, Inc. (ANS) for $1.3 billion. This purchase is expected to generate future sales from new products for Parkinson’s Disease, migraine headaches, angina and tinnitus. With ANS, the second largest manufacturer of spinal cord stimulation devices, St. Jude is poised to take on the $1 billion, under-penetrated market at full force.
The acquisition strategy appears to be continuing in 2006, as St. Jude paid $50 million in January to acquire Los Angeles, CA-based Savacor, Inc., a manufacturer of devices that help physicians detect and manage symptoms associated with progressive heart failure.
During the company’s spending spree for its acquisitions, the company was benefiting from numerous product approvals and launches. The CRM division saw strong sales for the Altas+ HF and Epic HF cardiac resynchronization therapy defibrillators, as well as the launch of St. Jude Medical’s first ICDs in Japan. FDA approval was also granted for the expanded capabilities of the Housecall Plus ICD remote monitoring system and the Frontier II low-voltage device for cardiac resynchronization therapy pacing. In addition, other launches included the QuickSite Bipolar CRT lead (United States and Europe) and the IsoFlex P (polyurethane) pacing lead. Most recently, St. Jude received European CE Mark approval for the Epic II ICD and the Epic II HF CRT-D.
St. Jude’s Atrial Fibrillation Division achieved several milestones in 2005, including a limited launch of the Epicor Cardiac Ablation system. Also introduced to the market were the Ensite System Version 5.1 and the Ensite Verismo Segmentation Tool, as well as the high-power IBI-1500T6 Cardiac Ablation Generator.
The Cardiac Surgery Division strengthened its tissue and valve repair product lines with the SJMBiocor stented tissue valve and expects the launch to bolster growth of the stented valve business in 2006 and beyond.
St. Jude’s numbers have been slightly tempered by ongoing litigation involving heart valves coated with Silzone, a coating that has lead to a small (but significant) increase in the incidence of explant due to paravalvular leak. As of February this year, 12 individual cases were pending in federal courts, with plaintiffs seeking damages of up to $120.5 million. Additionally, 24 suits involving 32 patients were filed in individual states.
Overall, with the success of numerous product launches and an upper management structure that has remained unchanged, St. Jude Medical is on track to experience additional growth. For the first quarter of 2006, the company already increased net sales by 18%, reaching $784 million versus $664 million last year. However, unfavorable foreign currency translation comparisons decreased those sales by about $22 million. ICD, atrial fibrillation and neuromodulation segments experienced the largest percentages of growth, with double-digit percentages of 27%, 25% and 31%, respectively.
Key Executives:
Daniel J. Starks, Chairman, President and CEO
John C. Heinmiller, Executive Vice President and CFO
Michael J. Coyle, President, Cardiac Rhythm Management Division
Joseph H. McCullough, President, International Division
Michael T. Rousseau, President, US Division
No. of Employees: 10,000
World Headquarters: St. Paul, MN
St. Jude Medical, a manufacturer of cardiac and neuromodulation devices, had an extremely enviable 2005, with the largest improvement in sales seen by any of the companies on this list. With a robust 27% increase in sales, which reached $2.9 billion (compared with $2.3 billion in 2004), the company was on a major winning streak.
Nearly three quarters (73%) of that growth achieved (approximately $451 million) was attributed to the Cardiac Rhythm Management (CRM) division, which contributed $1 billion in sales from its implantable cardioverter defibrillators (ICDs) alone—marking an impressive 72% gain over 2004. With only very few other major players in the ICD market, St. Jude expects the division to grow an additional 20% over the next few years, aided by the launch of an estimated 20 new products in 2006.
Acquisitions over the course of 2005 played a pivotal role in St. Jude’s success. Believing that providing advanced atrial fibrillation products to electrophysiologists would help increase ICD sales, the company’s Atrial Fibrillation Division acquired Endocardial Solutions, Inc., a St. Paul, MN-based manufacturer of diagnostic systems, in January 2005 for $272 million.
Later, in April, St. Jude’s Cardiology Division acquired Maple Grove, MN-based Velocimed, LLC for $74 million. Founded in 2001, the company makes specialty interventional cardiology devices, with the following three product platforms: the Premere patent foramen ovale (PFO) closure system; the Proxis proximal embolic protection device; and the Venture guidewire control catheter for accessing difficult anatomy and crossing chronic total occlusions in interventional catheterization procedures.
With the $1 billion neuromodulation medical device market having experienced historic 20% growth over the last several years, the talk of the town in late 2005 was St. Jude’s Neuromodulation Division move to acquire Advanced Neuromodulation Systems, Inc. (ANS) for $1.3 billion. This purchase is expected to generate future sales from new products for Parkinson’s Disease, migraine headaches, angina and tinnitus. With ANS, the second largest manufacturer of spinal cord stimulation devices, St. Jude is poised to take on the $1 billion, under-penetrated market at full force.
The acquisition strategy appears to be continuing in 2006, as St. Jude paid $50 million in January to acquire Los Angeles, CA-based Savacor, Inc., a manufacturer of devices that help physicians detect and manage symptoms associated with progressive heart failure.
During the company’s spending spree for its acquisitions, the company was benefiting from numerous product approvals and launches. The CRM division saw strong sales for the Altas+ HF and Epic HF cardiac resynchronization therapy defibrillators, as well as the launch of St. Jude Medical’s first ICDs in Japan. FDA approval was also granted for the expanded capabilities of the Housecall Plus ICD remote monitoring system and the Frontier II low-voltage device for cardiac resynchronization therapy pacing. In addition, other launches included the QuickSite Bipolar CRT lead (United States and Europe) and the IsoFlex P (polyurethane) pacing lead. Most recently, St. Jude received European CE Mark approval for the Epic II ICD and the Epic II HF CRT-D.
St. Jude’s Atrial Fibrillation Division achieved several milestones in 2005, including a limited launch of the Epicor Cardiac Ablation system. Also introduced to the market were the Ensite System Version 5.1 and the Ensite Verismo Segmentation Tool, as well as the high-power IBI-1500T6 Cardiac Ablation Generator.
The Cardiac Surgery Division strengthened its tissue and valve repair product lines with the SJMBiocor stented tissue valve and expects the launch to bolster growth of the stented valve business in 2006 and beyond.
St. Jude’s numbers have been slightly tempered by ongoing litigation involving heart valves coated with Silzone, a coating that has lead to a small (but significant) increase in the incidence of explant due to paravalvular leak. As of February this year, 12 individual cases were pending in federal courts, with plaintiffs seeking damages of up to $120.5 million. Additionally, 24 suits involving 32 patients were filed in individual states.
Overall, with the success of numerous product launches and an upper management structure that has remained unchanged, St. Jude Medical is on track to experience additional growth. For the first quarter of 2006, the company already increased net sales by 18%, reaching $784 million versus $664 million last year. However, unfavorable foreign currency translation comparisons decreased those sales by about $22 million. ICD, atrial fibrillation and neuromodulation segments experienced the largest percentages of growth, with double-digit percentages of 27%, 25% and 31%, respectively.