St. Jude Medical (NYSE:STJ) today warned of the possibility that a battery issue could disable its high-voltage cardiac rhythm management devices, saying the problem is associated with 2 deaths among the nearly 400,000 patients implanted with affected devices.
The news broke last night with a Twitter post by notorious short-selling firm Muddy Waters Consulting containing a copy of the letter St. Jude sent today detailing the problem. Muddy Waters and a cybersecurity firm in August alleged that major flaws in St. Jude’s CRM devices exposed them to a cybersecurity risk, but only after taking short positions on STJ’s stock. St. Jude later sued Muddy Waters and the hacking shop behind the report, after the sides traded accusations about its accuracy (which independent researchers found had “major flaws” – but not before STJ shares lost about 5% of their value, although the stock had mostly recovered as of the market’s close last week).
Today St. Jude said that there’s a risk that the lithium-based batteries used in its implantable cardioverter defibrillators and cardiac resynchronization therapy devices could form “lithium clusters” during high-voltage charging. The clusters could then cause a short circuit and deplete the battery within a day to a few weeks, rendering the device incapable of delivering therapy. The company said it received reports of 841 devices with the premature battery depletion issue among the 398,470 Fortify, Fortify Assura, Quadra Assura, Quadra Assura MP, Unify, Unify Assura and Unify Quadra devices it’s sold worldwide (roughly 0.21%), including the 2 deaths “associated with the loss of defibrillation therapy as a result of premature battery depletion.” The problem affects ICDs and CRT-Ds made before May 23, 2015, Little Canada, Minn.-based St. Jude said.
The company is recommending that patients contact their doctors immediately if their high-voltage CRM device issues a vibratory alert that its battery is nearly depleted, although replacing the device is not recommended “unless the physician determines otherwise.” The devices’ batteries can be checked during doctor office visits and through remote monitoring – using the Merlin.net system cited by the short-sellers in August. St. Jude said it would provide both the Merlin.net service and any replacement devices for free. No low-voltage pacemakers are affected by the battery issue, the company said.
“Our highest priority is the safety of patients depending on our life sustaining technology and we are working with regulators and physicians to communicate about this advisory and the resources we are providing to assist with patient management,” St. Jude said in an emailed statement.
STJ shares were off nearly -5% this morning in pre-market trading, coming in at $77.25 apiece after an $81.28 close Oct. 7.
