St. Jude Medical Inc. (STJ) recently received the U.S. Food and Drug Administration (FDA) approval for marketing the new Penta surgical lead for neurostimulation therapy. The Penta lead provides surgeons a new approach to manage chronic pain through neurostimulation therapy.
The new surgical lead is the broadest lateral electrode span of any neurostimulation lead on the market. The product uses a proprietary micro-texturing process that enables greater amounts of current to be delivered via the small electrodes. This results in electrical impulses over a greater lateral area of the spinal cord that manages hard to control chronic pain.
Neurostimulation therapy is used for managing chronic pain of the trunk, limbs and back pain post surgeries. It has been observed that chronic pain is a largely under-treated disease that affects millions of people around the world. In the U.S. alone, chronic pain affects more than 76.5 million people (source: The American Pain Foundation) and costs the country $100 billion a year in lost work time and medical expenses (source: The National Institutes of Health).
We think the new approval will increase demand for St. Jude’s neurostimulation therapy. The company has also recently received FDA approval for new software to optimize neurostimulation therapy for chronic pain patients. It has been estimated that till date, more than 60,000 patients in 35 countries have already been implanted with the company’s neurostimulation systems.
St. Jude Medical is a leading designer, manufacturer and distributor of medical devices to treat cardiovascular and neurological conditions. The company’s closest competitors are Medtronic Inc. (MDT) and Boston Scientific Corporation (BSX).
Based on St. Jude’s third quarter fiscal 2009 results, we have an “Underperform” rating on the company’s stock.
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