07.27.09
$4.3 Billion
KEY EXECUTIVES:
Daniel J. Starks, Chairman, President and CEO
John C. Heinmiller, Exec. VP and CFO
Frank J. Callaghan, President, Cardiovascular Division
Christopher G. Chavez, President, Neuromodulation Division
Eric S. Fain, President, CRM Division
Jane J. Song, President, Atrial Fibrillation Division
Denis M. Gestin, President, International Division
Joseph H. McCullough, Group President
Michael T. Rousseau, Group President
NO. OF EMPLOYEES: 14,000
GLOBAL HEADQUARTERS: St. Paul, Minn.
When Daniel J. Starks first looked back at his company’s 2008 performance earlier this year, he was reminded of an ancient Chinese curse: May you live in interesting times.
With unemployment rates and gas prices rising astronomically amid a global economy nearly destroyed by Wall Street’s historic meltdown, 2008 certainly epitomized the phrase “interesting times.”
What made those times even more interesting at St. Jude Medical Inc. was the fact that 2008 (particularly the fourth quarter) turned out not to be a curse at all. The company steadily increased its
KEY EXECUTIVES:
Daniel J. Starks, Chairman, President and CEO
John C. Heinmiller, Exec. VP and CFO
Frank J. Callaghan, President, Cardiovascular Division
Christopher G. Chavez, President, Neuromodulation Division
Eric S. Fain, President, CRM Division
Jane J. Song, President, Atrial Fibrillation Division
Denis M. Gestin, President, International Division
Joseph H. McCullough, Group President
Michael T. Rousseau, Group President
NO. OF EMPLOYEES: 14,000
GLOBAL HEADQUARTERS: St. Paul, Minn.
When Daniel J. Starks first looked back at his company’s 2008 performance earlier this year, he was reminded of an ancient Chinese curse: May you live in interesting times.
With unemployment rates and gas prices rising astronomically amid a global economy nearly destroyed by Wall Street’s historic meltdown, 2008 certainly epitomized the phrase “interesting times.”
What made those times even more interesting at St. Jude Medical Inc. was the fact that 2008 (particularly the fourth quarter) turned out not to be a curse at all. The company steadily increased its
St. Jude Medical’s Eon Mini Rechargeable IPG System. Photo courtesy of St. Jude Medical. |
sales throughout the year, despite deteriorating economic conditions. According to Starks, St. Jude’s chairman, president and CEO, the company delivered a constant currency sales growth rate of 9 percent in the first quarter, 13 percent in the second and third quarters and 14 percent in the fourth quarter.
“St. Jude Medical is well-positioned to thrive in interesting times,” Starks told analysts during a January conference call to discuss fourth quarter 2008 and year-end earnings. “While not recession-proof, our business is strongly recession-resistant.”
For the most part, St. Jude resisted the recession quite well last year. Net sales topped $4 billion for the first time in the company’s history, reaching $4.36 billion. St. Jude’s net sales total grew 15 percent compared with the $3.7 billion the firm posted in fiscal 2007.
Gross profit jumped 16.6 percent to $3.19 billion, but net earnings fell 31.3 percent, going from $559 million in fiscal 2007 to $384.3 million in fiscal 2008, ended Jan. 3, 2009. Diluted earnings per share plunged 30.8 percent to settle at $1.10. “St. Jude Medical’s share price could not escape the impact of the decline in the overall stock markets as a result of macroeconomic factors,” Starks noted.
Still, the company captured market share in each of its four key business segments. Starks claimed in the 2008 annual report that St. Jude currently holds the No. 1 or No. 2 market share position in nearly all the markets in which it competes.
The company’s Cardiac Rhythm Management (CRM) revenues jumped 14 percent to $2.7 billion last year. Products that contributed to the increase included the AnalyST implantable cardioverter defibrillator (ICD), a device launched in Europe that gives doctors insight into heart-related events and patient risks. CRM also benefitted from sales of the Merlin@home wireless transmitter, a tool that electronically sends data about device performance and patient heart rhythms to doctors. In January 2008, St. Jude received U.S. Food and Drug Administration (FDA) and European CE Mark approvals for its thinnest ICD leads, the Durata.
Besides giving its blessing to new products, the FDA also approved St. Jude’s new 150,000-square-foot facility in Arecibo, Puerto Rico, for the manufacturing of pacemakers and cardiac leads. The move promises to not only increase the firm’s CRM manufacturing capability, but also help solidify St. Jude’s market share position.
St. Jude’s Atrial Fibrillation (AF) segment posted the largest percentage increase of the four units last year. Revenue totaled $545.5 million, a 33 percent increase compared with the $410.6 million this segment generated in fiscal 2007. Sales were augmented by FDA and European CE Mark approvals for the Epicor LP Cardiac Ablation System, which uses high intensity-focused ultrasound technology to surgically remove cardiac tissue.
AF revenue also got a boost from the European launch of the SJM Confirm device, which is billed as the world’s smallest implantable cardiac monitor designed to detect atrial fibrillation and other abnormal heart rhythms. In addition, the company received FDA approval to launch its EnSite Fusion software system to help doctors diagnose arrhythmias and deliver therapy.
In addition to the new products, executives bolstered the AF unit with two acquisitions last year. In July, the company acquired EP MedSystems Inc., a West Berlin, N.J.-based manufacturer of electrophysiology products used in cardiac rhythm management. Executives hammered out the $95.7 million deal to strengthen the company’s portfolio of products used to treat heart rhythm disorders.
Shortly before Christmas, St. Jude acquired MediGuide Ltd., an Israeli firm that is developing navigation and tracking technology for cardiac devices, for $285.2 million.
St. Jude executives said the company will use research and development funds to determine whether MediGuide’s technology can apply to other product categories such as cardiac rhythm management, interventional cardiology, neurology and structural heart disease.
Neuromodulation segment sales posted double-digit gains last year, growing 21 percent to $254 million. A key driver of that growth was the Eon Mini, which is described as the “world’s smallest, longest-lasting rechargeable neurostimulator to treat chronic pain.” St. Jude made significant progress with its neuromodulation clinical trials last year, too.
In Europe, the company received approvals for its Libra Deep Brain Stimulation System to treat Parkinson’s disease and its Genesis neurostimulator system for chronic angina. In the United States, St. Jude started a clinical study to investigate whether deep brain stimulation in a specific area of the brain can help people suffering from major depression.
The gains reported in St. Jude’s cardiovascular business were not as great as those posted in the company’s other units, but growth was nevertheless reported. Sales totaled $862 million, a 9 percent increase compared with the $790.6 million the unit posted in fiscal 2007. The sector’s tissue valve business continued to evolve last year, driven by the company’s Epic Stented Tissue Valve with Linx anti-calcification technology.
Available in the United States, the valve is designed to protect against hardening, which can affect long-term durability. In its vascular closure business, St. Jude received FDA and European CE Mark approvals for the Angio-Seal Evolution Vascular Closure Device, a system that reduces potential variability as doctors deploy and seal the Angio-Seal system.
The cardiovascular unit ended 2008 with the December acquisition of Radi Medical Systems AB, a Swedish firm that develops devices for interventional cardiology, hemostasis management and radiology.
The acquisition expands St. Jude’s reach into two segments of the cardiovascular market in which it previously had not participated: physiological assessment of intravascular pressure during cardiovascular procedures and assisted manual compression devices for vascular closure.
For all units combined, the United States generated more than half the sales last year ($2.3 billion). European customers contributed $1.52 billion to the bottom line, while Japan and Asia Pacific reported total net sales of $621.7 million.
“St. Jude Medical is well-positioned to thrive in interesting times,” Starks told analysts during a January conference call to discuss fourth quarter 2008 and year-end earnings. “While not recession-proof, our business is strongly recession-resistant.”
For the most part, St. Jude resisted the recession quite well last year. Net sales topped $4 billion for the first time in the company’s history, reaching $4.36 billion. St. Jude’s net sales total grew 15 percent compared with the $3.7 billion the firm posted in fiscal 2007.
Gross profit jumped 16.6 percent to $3.19 billion, but net earnings fell 31.3 percent, going from $559 million in fiscal 2007 to $384.3 million in fiscal 2008, ended Jan. 3, 2009. Diluted earnings per share plunged 30.8 percent to settle at $1.10. “St. Jude Medical’s share price could not escape the impact of the decline in the overall stock markets as a result of macroeconomic factors,” Starks noted.
Still, the company captured market share in each of its four key business segments. Starks claimed in the 2008 annual report that St. Jude currently holds the No. 1 or No. 2 market share position in nearly all the markets in which it competes.
The company’s Cardiac Rhythm Management (CRM) revenues jumped 14 percent to $2.7 billion last year. Products that contributed to the increase included the AnalyST implantable cardioverter defibrillator (ICD), a device launched in Europe that gives doctors insight into heart-related events and patient risks. CRM also benefitted from sales of the Merlin@home wireless transmitter, a tool that electronically sends data about device performance and patient heart rhythms to doctors. In January 2008, St. Jude received U.S. Food and Drug Administration (FDA) and European CE Mark approvals for its thinnest ICD leads, the Durata.
Besides giving its blessing to new products, the FDA also approved St. Jude’s new 150,000-square-foot facility in Arecibo, Puerto Rico, for the manufacturing of pacemakers and cardiac leads. The move promises to not only increase the firm’s CRM manufacturing capability, but also help solidify St. Jude’s market share position.
St. Jude’s Atrial Fibrillation (AF) segment posted the largest percentage increase of the four units last year. Revenue totaled $545.5 million, a 33 percent increase compared with the $410.6 million this segment generated in fiscal 2007. Sales were augmented by FDA and European CE Mark approvals for the Epicor LP Cardiac Ablation System, which uses high intensity-focused ultrasound technology to surgically remove cardiac tissue.
AF revenue also got a boost from the European launch of the SJM Confirm device, which is billed as the world’s smallest implantable cardiac monitor designed to detect atrial fibrillation and other abnormal heart rhythms. In addition, the company received FDA approval to launch its EnSite Fusion software system to help doctors diagnose arrhythmias and deliver therapy.
In addition to the new products, executives bolstered the AF unit with two acquisitions last year. In July, the company acquired EP MedSystems Inc., a West Berlin, N.J.-based manufacturer of electrophysiology products used in cardiac rhythm management. Executives hammered out the $95.7 million deal to strengthen the company’s portfolio of products used to treat heart rhythm disorders.
Shortly before Christmas, St. Jude acquired MediGuide Ltd., an Israeli firm that is developing navigation and tracking technology for cardiac devices, for $285.2 million.
St. Jude executives said the company will use research and development funds to determine whether MediGuide’s technology can apply to other product categories such as cardiac rhythm management, interventional cardiology, neurology and structural heart disease.
Neuromodulation segment sales posted double-digit gains last year, growing 21 percent to $254 million. A key driver of that growth was the Eon Mini, which is described as the “world’s smallest, longest-lasting rechargeable neurostimulator to treat chronic pain.” St. Jude made significant progress with its neuromodulation clinical trials last year, too.
In Europe, the company received approvals for its Libra Deep Brain Stimulation System to treat Parkinson’s disease and its Genesis neurostimulator system for chronic angina. In the United States, St. Jude started a clinical study to investigate whether deep brain stimulation in a specific area of the brain can help people suffering from major depression.
The gains reported in St. Jude’s cardiovascular business were not as great as those posted in the company’s other units, but growth was nevertheless reported. Sales totaled $862 million, a 9 percent increase compared with the $790.6 million the unit posted in fiscal 2007. The sector’s tissue valve business continued to evolve last year, driven by the company’s Epic Stented Tissue Valve with Linx anti-calcification technology.
Available in the United States, the valve is designed to protect against hardening, which can affect long-term durability. In its vascular closure business, St. Jude received FDA and European CE Mark approvals for the Angio-Seal Evolution Vascular Closure Device, a system that reduces potential variability as doctors deploy and seal the Angio-Seal system.
The cardiovascular unit ended 2008 with the December acquisition of Radi Medical Systems AB, a Swedish firm that develops devices for interventional cardiology, hemostasis management and radiology.
The acquisition expands St. Jude’s reach into two segments of the cardiovascular market in which it previously had not participated: physiological assessment of intravascular pressure during cardiovascular procedures and assisted manual compression devices for vascular closure.
For all units combined, the United States generated more than half the sales last year ($2.3 billion). European customers contributed $1.52 billion to the bottom line, while Japan and Asia Pacific reported total net sales of $621.7 million.