In a bid to expand its international operation, St. Jude Medical (STJ) has launched its Accent MRI Pacemaker and the Tendril MRI lead in Japan. This follows an approval from the Japanese Ministry of Health, Labor and Welfare (MHLW). This also remains in line with the company’s plan to launch the pacemaker in the Japanese market by mid-2013.
Patients with traditional pacing systems cannot receive MRI scans, as the device might get damaged. The uniqueness of the Accent MRI pacemaker lies in the fact that it is capable of delivering full-body magnetic resonance imaging (MRI) scans using high-power imaging technology. The Tendril lead platform, featuring the Optim lead insulation, enhances the flexibility and safety of the device. Two different models of the pacemaker are commercially available viz. the Accent MRI DR and the Accent MRI SR.
Our Take
Cardiac devices are used to provide electrical stimulation to the heart when it beats slowly. According to The New England Journal of Medicine, about 1.25 million people in the world are implanted with a pacemaker every year. St. Jude, a large player in the Cardiac Rhythm Management (CRM) market, should be able to capture significant market share with its new technologies.
However, St. Jude’s core CRM division is still underperforming as the underlying market remains weak. The pacemaker business under the company’s CRM division is losing market share due to competitive pressure and volume/pricing headwinds in international markets. Pacemaker sales plunged 11% in constant currency to $251 million in the last reported quarter. Additionally, pricing pressure in Japan is on the rise.
The CE Marked Accent MRI pacemaker is experiencing strong adoption and premium pricing in the markets in which it has already been launched. The Japanese launch of this product should help STJ’s soft pacemaker business regain market share. We believe that the sluggish pacemaker business is likely to pick up pace toward the end of 2013 with new product launches in Europe and Japan.
The company plans to launch 5 new pacemakers in Europe and Japan in 2013. Recently, the company received CE Mark approval for its Allure Quadra Cardiac Resynchronization Therapy Pacemaker (CRT-P). It is the world’s first pacemaker with the quadripolar lead technology.
St. Jude currently carries a Zacks Rank #3 (Hold). While we remain on the sidelines regarding STJ, Haemonetics (HAE), Edwards Lifesciences (EW) and Resmed (RMD) are worth considering. HAE carries a Zacks Rank #1 (Strong Buy), while the other two stocks carry a Zacks Rank #2 (Buy).
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