Minnesota medical device giant St. Jude Medical (NYSE:STJ) soared to new heights yesterday, notching a high-water mark of $56.56 after analysts predicted that an upcoming panel for CardioMEMs would turn out better than last time.
CardioMEMs is getting a 2nd run at FDA premarket approval after getting rejected in 2011. Analysts have said that the past rejection appeared "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.
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."
CardioMEMs is fighting its way toward a market opportunity worth upwards of $1 billion, and approval would certainty signal a long-term upside for St. Jude’s bottom line. Analysts at Leerink Swann have estimated that CardioMEMs’ Champion HF heart failure monitoring system could contribute between 25¢-50¢ to St. Jude’s per-share earnings.
CardioMEMs is scheduled to meet on October 9 with the FDA’s Circulatory System Devices Panel. STJ shares closed last night at $55.88, a 0.6% decrease on the day.