St. Jude Medical Inc. (STJ) recently made a $15 million equity investment in Micell Technologies, a small company that operates in the niche market of developing drug-coated stents.
We view this as St. Jude’s strategy to acquire Micell in future and bolster its position in the cardiovascular segment. However, the investment does not give St. Jude a right to have a voting member in Micell’s board. Other details of the deal were not disclosed.
Micell’s drug-coated stents are less likely to produce blood clots than drug-eluting stents. A stent is a small metal tube used in surgeries to open up clogged arteries.
The equity investment provides Micell with a partner and funding source for exploring other applications in coating technology.
St. Jude Medical is a leading medical device manufacturer that designs, manufactures and distributes medical devices to treat cardiovascular and neurological conditions. The company operates through four business segments: Cardiac Rhythm Management (CRDM), Cardiovascular, Atrial Fibrillation, and Neuromodulation.
The company holds the second position in the market for ICDs and pacemakers in the CRDM segment after Medtronic Inc. (MDT) but ahead of Boston Scientific Corp. (BSX). St. Jude also follows market leader Medtronic in the neuromodulation space. Based on the company’s second-quarter results, we have assigned a Neutral rating to the stock.
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