Medical devices major St. Jude Medical (STJ) has officially commenced the Canadian launch of its new Trifecta pericardial aortic stented tissue valve, which is used as a replacement for the damaged or malfunctioning aortic heart valve (controls blood flow from the heart through entire body).
The launch of this next-generation tissue valve represents another major milestone for the Minnesota-based company. The first procedures were performed at the Providence Health Care, a leading health care facility in Canada.
The Trifecta valve, which has been constructed using a polyester and tissue-covered titanium stent, is designed to offer improved hemodynamic performance and durability. It offers a number of novel features that improve implantability, thereby offering surgeons more flexibility in selecting the appropriate replacement valve for each patient’s heart.
St. Jude received European CE mark approval for the Trifecta valve in March 2010, which has marked its entry into the pericardial stented tissue valve market. The company expects to launch the valve in the U.S. in mid-2011.
St. Jude offers its heart valve (mechanical and tissue) replacement and repair products through its Cardiovascular segment, the second-largest contributor to revenues. The company has been an industry leader in mechanical heart valves, which have been implanted in more than 1.8 million patients globally.
Heart valves products fetched revenues of $323 million in fiscal 2009, accounting for roughly 34% of St. Jude’s Cardiovascular sales. The company’s key competitors in the heart valve market are Edwards Lifesciences (EW) and Medtronic (MDT) and Sorin CarboMedics. The Trifecta valve further strengthens St. Jude’s market-leading heart valve franchise.
St. Jude is well positioned to savor incremental opportunities in its Cardiovascular business on the back of its acquisition of medical technology firm LightLab Imaging in July 2010 and, more recently, cardiac devices maker AGA Medical in November 2010.
Also, the launch of a new manufacturing plant in Costa Rica with much fanfare in September 2010 is expected to boost production of St. Jude’s heart valve products (including Trifecta) and augment the manufacturing capacity of its Cardiovascular business. Moreover, the U.S. launch of the Trifecta valve will represent another exciting new growth prospect for this division in 2011.
While we are encouraged by St. Jude’s solid fundamentals, strong product mix and healthy growth trajectory, we remain wary about competition-driven pricing pressure and the heightened competition in a mature pacemaker market.
Moreover, we are cautious about the dilutive impact of acquisitions and any unfavorable currency exchange fluctuations on the bottom line. This is reflected in our Neutral recommendation for the stock, which is supported by a short-term Zacks #3 Rank (Hold).
EDWARDS LIFESCI (EW): Free Stock Analysis Report
MEDTRONIC (MDT): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
Zacks Investment Research
