St. Jude Medical gets tangled in its own rope over Riata


The medical device world was abuzz this week as St. Jude Medical (NYSE:STJ) came out swinging against critics of its recalled Riata defibrillator lead.

The St. Paul, Minn.-based company’s vociferous response reportedly has doctors and investors backing away from St. Jude, according to Reuters, and has taken some 13.4% from STJ’s shares since late March.

The affair began last September with a small Irish study reporting that revision surgeries for the Riata lead were higher than previously reported. A month later, CEO Daniel Starks took to the airwaves to inveigh against arch-rival Medtronic (NYSE:MDT) and its alleged attempts to prejudice the market against St. Jude.

Little more than a month after Starks’ diatribe, however, the company was forced to concede that the Riata revision rates were higher than previously reported, and in December 2011 St. Jude yanked the Riata leads off the market, a move the FDA slapped with Class I recall status.

Then, with the online publication in the Heart Rhythm Society’s journal of a study by a prominent cardiologist linking Riata with 22 deaths, things began to get interesting. By late March, St. Jude was disputing the findings of the study, by Dr. Robert Hauser. On Friday, April 6, the company asked that the journal retract the story (a request that was summarily rebuffed), and over the course of the following weekend Starks reiterated his accusation that cross-town rival Medtronic was behind a "whisper campaign" against St. Jude.

Medtronic then released its own analysis confirming Hauser’s count of the number of deaths attributable to its own Quattro leads, engendering a swift and unusual response from St. Jude, which published its own tally of the Quattro deaths.

"I can’t recall seeing a more contentious and open dispute between medical device companies in my 19 years working in this field," Ohio cardiologist Dr. Edward Schloss, director of cardiac electrophysiology at the Christ Hospital in Cincinnati, told this week.

Schloss’s comparison of the Hauser and St. Jude data sets, published this week in after being rejected by the Heart Rhythm Society, found that "methodological differences explain the wide disparity in number of deaths" in each data set.

"The uncounted deaths in Dr. Hauser’s analysis were almost entirely indeterminate or not lead-related, and likely were excluded by Dr. Hauser’s differing collection methods," Schloss wrote. "In both datasets, a low number of lead-related deaths were observed."

But that’s not enough to mollify Wall Street or St. Jude’s customers, according to the Reuters report.

"People are wondering, is there more to this story? When you see such a vigorous defense, you wonder what’s evoking this? Why are they fighting people who are raising questions? This could leave lasting reputational damage," Dr. Harlan Krumholz, a cardiologist at the Yale School of Medicine, told the news service.

Dr. Martin Burke, interim chief of cardiology and director of the heart rhythm center at the University of Chicago Medicine, said he stopped using the called Durata lead because "the backbone" was the same design as the older Riata, noting that he expects other docs to follow suit.

"I stopped using Durata months ago. I stopped using Riata years ago," Burke told Reuters.

Colleague Dr. Eric Prystowsky of St Vincent Hospital in Indianapolis added he will not be using St Jude leads until he sees better safety data.

"I have a lot of [recalled Medtronic] Fidelis leads in my patients and I don’t want to go through that again," Prystowsky said. "[St. Jude] should have alerted us sooner and given us a better perspective about the gravity of the problem."

Writing on his "Dr. Wes" blog, cardiologist Westby Fisher said St. Jude "acknowledged years ago there there were problems with this class of defibrillator leads."

"To those of us in practice, it is not sup rising there are problems with these same leads now. In fact, we continue to find new clinical challenges when managing these leads," Fisher wrote. "Why St. Jude continues to suggest that their pulled Riata leads really aren’t as bad as claimed seems incongruous with their professed need to recall them.

"Electrophysiologists and patients need more credible information about the likelihood of failure of these leads and ways to follow patients to prevent further deaths.  New software upgrades to provide early warning alerts, registries, or updated recommendations regarding the routine follow-up of these leads would be welcomed," he wrote. "What we don’t need are more media temper tantrums.  This problem is hard enough without having to endure the spin."

Those sentiments could spell big trouble for St. Jude, according to Thrivent Investment Management analyst David Heupel, citing the widely held expectation that the company would add to its CRM market share this year – rather than face an erosion of its share, as now seems likely.

"Until I can get more confirmation that the Durata lead is OK, it will continue to be a concern," Heupel told the news service.

"Their posturing in this has the potential to really alienate their customers," added Jefferies analyst Raj Denhoy. "This is an ominous development."

But Morningstar analyst Debbie Wang said the woe could be relatively short-lived, noting Medtronic’s return from the Fidelis debacle, and posited that it could be a long-term plus for the overall industry.

"Looking at the long list of product quality issues that have come up, it makes the doctors and hospitals never want to put all of their eggs in one basket," Wang said. "It ensures the market will always be an oligopoly."

STJ shares closed today at $38.58, down 4.3% on the day.

RSS From Medical Design & Outsourcing

  • Athermal laser machining cuts bioabsorbable polymers and more
    A the recent MD&M East trade show in New York, Norman Noble, discussed the capability of athermal laser manufacturer. The company has developed the Noble S.T.E.A.L.T.H. (System To Enable Ablation Laser Technology Haz-free). The athermal laser machining process was developed to create precise features in any material, including bioabsorbable polymers, shape memory metals and other […]
  • Exciting possibilities for metallic glass in the medical device world
    Researchers are exploring the potential of metallic glass as a versatile, pliable material that is stronger than steel, with a bevy of possible medical device applications. Yale University engineers have discovered a unique method for designing metallic glass nanostructures across a wide range of chemicals, a technique that could have applications for everything from watch […]
  • Strong Precision Technologies’ medical divisions to unify under MedTorque brand
    Strong Precision Technologies announced on July 2, 2015, that its two medical divisions will now go to market under a single brand, MedTorque. The move reflects the increasing integration of the division formerly known as Inland Midwest with MedTorque, its sister division in Kenosha, WI. “We will continue providing our customers with the personalized level of service […]
  • Olympus offers next-day product replacement guarantee for medical devices
    Olympus, a medical and surgical procedures solutions company, announced that it is guaranteeing next-day replacements for surgical equipment at no additional charge. Olympus is the first surgical product manufacturer to offer this type of guarantee. The service became available to customers with an Olympus Full Service Agreement earlier this year. “Canceled procedures can be costly for healthcare facilities […]
  • More accurate prediction on prognosis in multiple myeloma from SkylineDx
    SkylineDx, a biotechnology company specializing in the development and commercialization of genetic tests, is launching its MMprofiler assay. This test enables clinicians to more accurately predict the prognosis of patients with multiple myeloma (bone marrow cancer) than traditional methods. The MMprofiler measures the activity of 92 genes which are directly or indirectly related to the […]
  • Flint Mobile swaps card reader for camera, accept mobile payments anywhere
    Flint Mobile, the swipe-free mobile payments app, has significantly expanded its payment management and loyalty capabilities for small, service-centric businesses, like the ones run by on-the-go medical equipment professionals. The toggle-free mobile technology makes the process quite simple for both parties, as all transactions are conducted through the mobile device’s camera without the need of any external […]
  • Should scientists be allowed to genetically alter human embryos?
    Scientists have at their disposal, a way to explore the possible prevention of genetic diseases before birth. But should they? Currently, the most promising path forward involves editing the genes of human embryos, a procedure threaded with controversy. An article in “Chemical & Engineering News” (C&EN), the weekly newsmagazine of the American Chemical Society (ACS), parses […]
  • Tackling chronic sinusitis by addressing underlying factors
    The stuffy noses and sinus pressure of head colds are uncomfortable, but for most people, they go away within days. For those with chronic sinusitis, however, those symptoms and others drag on for weeks. Now scientists are onto a potential new therapy that could address one of the underlying factors associated with the condition. They […]
  • Implantable “artificial pancreas” could help diabetes patients control their blood sugar
    Living with Type 1 diabetes requires constant monitoring of blood sugar levels and injecting insulin daily. Now scientists are reporting in the American Chemical Society (ACS) journal, “Industrial & Engineering Chemistry Research,” the development of an implantable “artificial pancreas” that continuously measures a person’s blood sugar or glucose level and can automatically release insulin as […]
  • Drug Deactivation program roll out to all facilities for safe disposal of unused prescription medications
    Verde Technologies announced that New Brighton-based Meridian Behavioral Health, the largest for-profit substance abuse and addiction treatment group in Minnesota, has become its most recent partner in the deactivation and safe disposal of prescription medications including methadone. Meridian is the first behavioral health group to roll out the Deterra Drug Deactivation System to all 17 […]
  • Lophius Biosciences introduces T-activated ImmunoScan Cocktail
    Lophius Biosciences announced the commercial launch of T-Track ImmunoScan and T-activated ImmunoScan Cocktail. Based on a proprietary and very specific cocktail of stimulants in combination with the Company’s T-activation technology, T-Track ImmunoScan and T-activated ImmunoScan Cocktail specifically target different cell types involved in both the adaptive and innate immune system. T-Track ImmunoScan and the T-activated […]

Leave a Reply