Neither CEO Michael Mahoney, nor CFO Jeffrey Capello named names during a breakout session following a presentation at the J.P. Morgan Healthcare conference in San Francisco, but its likely the executives were referring to St. Jude Medical (NYSE:STJ), and its ongoing difficulties with their recalled Riata defibrillator leads.
The Riata affair began in September 2011 with a small Irish study reporting that revision surgeries for the Riata lead were higher than previously reported. A month later, 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’ challenge, however, the company was forced to concede that the Riata revision rates were higher than previously reported, and in December 2011 the FDA slapped the device with Class I recall status.*
St. Jude had already begun phasing out its Riata and Riata ST leads in December 2010 over concerns that their electrical insulation could cause the devices to malfunction, but the FDA didn’t view the matter as a recall-worthy then, a company spokesperson told the Wall Street Journal at the time.
The ongoing fray represents an opportunity for rival cardiac device makers, among them Boston Scientific.
"One of our competitors continues to have a challenge with their leads," Capello said yesterday. "Our lead reliability is 2nd-to-none in the industry."
Boston Scientific is already beginning to gain share in the lead replacement market and its implant-to-revision sales ratios are picking up momentum, especially as exclusive contracts expire, he added.
*Correction January 10, 2013, 2:00 p.m. – This article erroneously suggested that the Riata and Riata ST leads were available for sale until December 2011. St. Jude phased out those products in December 2010, with a formal FDA Class I recall launched in December 2011.