Abbott Laboratories’ St. Jude Medical heart-device division will see an immediate boost in sales — and credibility with investors — following Wednesday’s announcement that U.S. regulators have finally approved its pacemaker that is compatible with MRI scanners, analysts say.
Last year St. Jude Medical hemorrhaged market share in the $1.5 billion U.S. market for pacemakers because competitors Medtronic and Boston Scientific had models approved for use with magnetic-resonance imaging (MRI) scanners. Until Wednesday, St. Jude lacked such a device.
Abbott, which acquired St. Jude Medical on Jan. 4, announced Wednesday that the U.S. Food and Drug Administration approved the St. Jude Assurity MRI pacemaker and the related Tendril MRI insulated lead that delivers current to the heart tissue. Sales of the devices are expected to begin immediately.
Pacemakers are common implantable medical devices that use mild electric pulses to speed up a heart beat that is too slow. Having an MRI scan with a non-MRI-approved pacemaker carries a low risk that the device could heat up inside the body or experience a programming malfunction.
Abbott said the Assurity MRI is the world’s smallest “wireless” MRI-compatible pacemaker. The device is considered wireless because it communicates with remote-monitoring equipment used in the doctor’s office and at the patient’s bedside.
Unlike smaller “leadless” pacemakers, the Assurity MRI can pace two chambers of the heart: the right atrium and right ventricle.
“We are very excited about this. This will address the needs of physicians and patients who want access to features such as wireless remote monitoring and are interested in smaller size,” said Dr. Mark Carlson, division vice president and chief medical officer at Abbott. “We think this is going to make a big impact.”
FDA approval of the Assurity MRI comes well after it was expected.
Last year, St. Jude executives said at an investors’ conference that the “path to recovery” in sales of cardiac-rhythm management devices hinged, in part, on FDA approval of the Assurity MRI in the first half of 2016. That didn’t happen. Then in the fall, St. Jude’s former CEO told investors the approval was expected before the end of 2016.
Last Wednesday, Abbott CEO Miles White said in a quarterly earnings call that FDA approval of the MRI pacemaker was imminent.
“This morning’s announcement represents a clearly positive start for the Abbott/St. Jude combination,” Stifel stock analyst Rick Wise wrote Wednesday, “in terms of both reinvigorating growth for the underperforming STJ rhythm-management franchise ... as well as adding some additional credibility to [Abbott’s] just-restated expectation that an ICD MRI approval is expected for a possible late 2017 U.S. FDA approval.”
“ICD MRI” means an implantable cardioverter defibrillator that is approved as compatible with MRI scanners.
Implantable defibrillators, which are more expensive and technologically sophisticated than pacemakers, were St. Jude’s bestselling class of products. They can administer lifesaving shocks to restart a fibrillating heart, and some function as pacemakers as well.
Medtronic already sells MRI-compatible defibrillators; Boston Scientific is actively pursuing approval for similar devices, and it already has MRI approval for a specific type of “subcutaneous” ICD that does not require leads attached to the heart.
Abbott shares closed at $42.33 Wednesday, up 56 cents, or 1.3 percent.