In a note to investors, Roman boosted his rating from "neutral" to "buy" and his price target from $45 to $50 per share, saying the medical device maker has made gains in its core markets and entered new ones.
"Share gains in core markets and entrance into new therapeutic categories should support accelerating organic revenue growth through 2015," Roman wrote, noting that St. Jude should outperform its rivals as the cardiac rhythm management slump bottoms out and begins to climb again.
Other analysts were not as optimistic about the company’s prospects. Leerink Swann maintained its "outperform" rating and $46 price target on STJ shares, while Citigroup held to its "sell" rating and cut its price target 2.7%, from $37 to $36 per share.
Leerink analyst Rick Wise, noting that today’s news of a CE Mark win for St. Jude’s Enlightn high blood pressure treatment arrived 6 months ahead of expectations, wrote that the news makes St. Jude the 3rd large med-tech player to enter the renal denervation market. Crosstown rival Medtronic (NYSE:MDT) and its Symplicity system are the market leaders; Covidien (NYSE:COV) vaulted into the space last week with the surprise acquisition of Maya Medical and its OneShot device.
"Importantly, our understanding is that STJ’s technology may have some advantages to MDT’s Symplicity system – specifically a multi-electrode design that could allow for a faster, more efficient and more consistent procedure," Wise wrote.
Nevertheless, he wrote, “our STJ model does not reflect any significant contributions from Enlightn at this time.”
For Citigroup’s Matthew Dodds, "difficult fundamentals" for the CRM market, which it pegs for 70% of STJ’s sales, mean "Street estimates for 2012 and beyond are overly aggressive and are well above our forecasts," according to a research note.
"Competitive product issues by Boston Scientific (NYSE:BSX) and Medtronic enabled St. Jude to capture share in the CRM market including over 900bp of global ICD market share since 2005. This trend has started to reverse, with Medtronic now taking share in pacemakers and concerns about the Riata/Durata ICD lead systems likely to start pressuring market share. In addition, both the pacemaker and ICD markets are in a state of decline that is expected to continue in 2012," Dodds wrote.
Philips inks deal to sell BSX’s iLab cardiac cath lab imaging device
Philips Healthcare (NYSE:PHG) inked a deal with Boston Scientific (NYSE:BSX) to sell BSX’s iLab imaging system alongside its Allura Xper catheterization lab worldwide.
Philips, Celsion to resubmit IND/IDE on prostate cancer drug/device combo
Celsion (NSDQ:CLSN) its resubmitting its joint application for an investigational new drug/investigational device exemption with Philips Healthcare (NYSE:PHG) to the FDA. The IND/IDE is for a Phase II clinical study of Celsion’s ThermoDox drug and Philips’ Sonalleve MR-guided high-intensity focused ultrasound device, for the treatment of prostate cancer metastases to the bone.
SNN CEO Bohuon: Med-tech fails to innovate
Olivier Bohuon, the CEO of British medical products giant Smith & Nephew (FTSE:SN, NYSE:SNN), tells the Financial Times of London that medical device makers are their own worst enemies when it comes to innovation.
"When we talk about price erosion – 3%-4$ a year – many people are blaming this on government austerity measures, but they are wrong," Bohuon told the newspaper. "What is happening is that we as an industry are not bringing in enough innovative products to get higher prices.
"When you don’t innovate, your portfolio becomes older, and then in order to be successful in tenders you have a tendency to drop your prices," he said. "Innovation is the bread and butter of this business."
"We try to focus on where we need to go, but it’s also important not to remain a step behind our rivals. You cannot say that just because it is difficult to innovate that you don’t want to go there," Bohuon said. "It is easier to innovate in areas other than orthopaedics. You don’t invent a new hip or a knee every other day."
Report: Abbott’s Q1 lobbying spend tops $1.6M
Abbott (NYSE:ABT) spent more than $1.6 million lobbying Washington politicians during the 1st quarter, according to Politico Influence, which says the medical products conglomerate spends between $4 million and $5 million a year trying to influence health policy inside the Beltway.
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