CardioMEMs' 2nd chance with the FDA is good news for backer St. Jude Medical

September 9, 2013 by Arezu Sarvestani

The FDA's Circulatory System Devices Panel will in October reconsider CardioMEMs' once-rejected application for its Champion heart failure monitoring system, a potential boon for stakeholder St. Jude Medical.

FDA's decision to take another look at CardioMEMs has upsides for St. Jude Medical

Once-rejected CardioMEMs will get another shot at FDA approval for its Champion implantable heart failure monitoring systems when the agency's Circulatory System Devices Panel convenes next month, according to a notice in the Federal Register.

That means a 2nd chance for a company previously considered "dead in the water," according to analysts at Leerink Swann, as well as a potential boon for CardioMEMs backer St. Jude Medical (NYSE:STJ).

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St. Jude has put a lot of money into Georgia-based CardioMEMs, owning a 19% stake in the company as well as an option to buy. St. Jude recently deepened its interest in CardioMEMs with a $28 million debt financing that analysts said was based on "favorable due diligence."

The FDA previously rejected CardioMEMs' PMA application on concerns about device efficacy and labeling, but analysts said that past rejected appears "more focused on semantics, less on data," and that the new chance at an FDA panel date signals a more likely approval for the Champion system.