With an eye toward capitalizing on the potentially lucrative heart-failure market, St. Jude Medical Inc. said Tuesday it has invested $60 million in a Georgia company that has developed a wireless cardiac monitoring device.
If all goes well, Little Canada-based St. Jude could buy CardioMEMS Inc. outright for an additional $375 million if certain milestones are met. With Tuesday's news, St. Jude now owns a 19 percent stake in the Atlanta start-up.
CardioMEMS has developed a device that is inserted in the pulmonary artery during a minimally invasive surgical procedure. A sensor then transmits data about the heart's performance through an external monitor to the patient's clinic for review. If a problem is detected, including fluid buildup in the lungs, doctors can adjust medication or make other treatment decisions, often keeping the patient out of the hospital.
More than 5 million Americans have heart failure -- which occurs when the heart is unable to pump enough blood to meet the body's demands -- and some 670,000 new cases are diagnosed annually. The condition, which often results in frequent (and expensive) hospitalizations, costs the U.S. health care system about $38 billion a year.
Privately held CardioMEMS recently presented results from a 550-patient clinical trial at the European Society of Cardiology Heart Failure Congress in Berlin. According to St. Jude, the study found a 30 percent reduction in the rate of heart failure-related hospitalizations at six months, and a 38 percent decline in the 15-month follow-up period.
Dr. Eric Fain, president of St. Jude's cardiac rhythm management division, said in a statement that such technologies not only benefit patients, but save money, an important consideration for U.S. health care reform and reducing medical costs worldwide.
St. Jude said the agreement bolsters its presence in the market for medical devices treating heart failure -- a space that includes Fridley-based Medtronic Inc., the world's largest medical technology company. In 2005, St. Jude bought Savacor Inc., a California company that has developed another heart failure diagnostic tool, for $50 million.
Heart failure "is an enormous market," said Phil Nalbone, an analyst with Wedbush Securities. "The market will take years to develop, but it's wise for St. Jude to have a seat at the table."
St. Jude shares closed Tuesday at $35.70, down 22 cents.
Janet Moore • 612-673-7752