St. Jude Medical’s (STJ) Eon Mini spinal cord stimulation (SCS) system has been cleared by the Japanese Ministry of Health, Labor and Welfare (MHLW). The approval enables the Minnesota-based medical devices giant to market the device, claimed to be the world’s smallest, longest-lasting rechargeable neurostimulator, in Japan.
 
Eon Mini is used for treating chronic pain of the trunk, back and/or limbs. The device delivers mild electrical impulses to the spinal cord that interrupt pain signal transmission to the brain, thereby offering relief. Eon Mini was approved for marketing in the U.S. and Europe in 2008. It is now the first rechargeable SCS to be approved for use in Japan.
 
Chronic pain is a debilitating condition which is long lasting or recurring and affects roughly 50 million people in the U.S. It is common in several back and spine conditions and is often misdiagnosed. The annual cost associated with this condition is estimated at $100 billion. Poor prognosis of chronic back/spinal pain typically leads to treatment failure.  
 
SCS, an implantable neurostimulation (stimulation of the spinal cord by electrical impulses) therapy, has a proven track record in providing pain relief to patients and is primarily used for chronic pain management when physical and/or drug therapies are ineffective.
 
Eon Mini’s thin profile (10 mm thick) and greater implant depth makes it less noticeable and more comfortable for patients. Its small size allows smaller incision, providing physicians with the flexibility to choose the implant location. Moreover, the device’s best-in-class battery longevity (typically lasts 10 years) enables it to provide sustainable therapy and maintain a reasonable recharge interval.
 
The neurostimulation market is growing at a healthy pace driven by growth in age-related neurological conditions and significant need for effective alternative therapies. The U.S. market for neurostimulation products was valued at $1.3 billion in 2009 with SCS systems capturing the largest share (roughly 40%).
 
Neurostimulation represents an increasingly lucrative market opportunity for St. Jude. The company’s neurostimulation revenues grew 17% year-over-year in second-quarter fiscal 2010, driven by the continued adoption of Eon Mini. St. Jude faces stiff competition from Medtronic (MDT), Boston Scientific (BSX) and Cyberonics (CYBX) in the neurostimulation devices space.
 
The neurostimulation market is forecasted to grow 16% annually over the next five years, representing a compelling prospect for incumbent players. Our Neutral recommendation on St. Jude is supported by a short-term Zacks #3 Rank (Hold).
 
BOSTON SCIENTIF (BSX): Free Stock Analysis Report
 
CYBERONICS INC (CYBX): Free Stock Analysis Report
 
MEDTRONIC (MDT): Free Stock Analysis Report
 
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
 
Zacks Investment Research