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Medical devices major St. Jude Medical (STJ - Analyst Report) has won the European CE Mark approval for its MultiPoint Pacing Quadra Assura MP cardiac resynchronization therapy defibrillator (CRT-D). This one-of-a-kind quadripolar device from the company’s Cardiac Rhythm Management (CRM) business, featuring the Quartet lead, improves hemodynamic support in patients receiving cardiac resynchronization therapy (CRT).

About Assura

Assura’s product line is primarily meant for patients prone to sudden cardiac death (SCD) due to abnormally fast and potentially fatal cardiac rhythms, as well as for patients at risk of heart failure. The Assura implantable cardioverter defibrillators (ICDs) and CRT-Ds address this problem and offer precise solutions.

The new Quadra Assura MP CRT-D has the advantage of MultiPoint Pacing (MPP) technology that delivers pacing to multiple locations in the heart rather than the traditional single pulse for each heartbeat. Moreover, it is built on the industry’s first Quadripolar Pacing System. The four electrodes of the Quartet lead provides enhanced flexibility for different pacing configurations.

Earlier in Nov 2012, St. Jude had received the CE Mark approval for its Assura family of ICDs and CRT-Ds (including Quadra Assura CRT-D, Unify Assura CRT-D and Fortify Assura ICD), featuring the Shockguard technology. The Assura product line gained the approval of the U.S. Food and Drug Administration (FDA) in May 2012.

Market Opportunity

At present, about 14 million Europeans ail from heart failure. St. Jude Medical recently launched the world’s first quadripolar MultiPoint Pacing technology in Europe. Quadripolar Pacing is becoming the new standard of care in CRT. This provides a competitive advantage to the company’s CRT segment to gain market share in the ICD market.

Several studies have demonstrated that CRT pacing delivered by an ICD can improve patient outcome. A study presented at the Heart Rhythm Society (HRS) 2013 meeting revealed that 89% patients treated with STJ’s MPP responded positively after 3 months. This represents a 20% hike from about 70% response rate from traditional CRT therapy.

Additionally, St. Jude is conducting a MultiPoint Pacing clinical study in the U.S. under an Investigational Device Exemption (IDE). Patients have been implanted with the Quadra Assura MP CRT-D and Quartet lead. Another single-center study will evaluate the efficiency of CRT with MPP at various programmed parameters for 6 months. Moreover, a post-market study is expected to be initiated by the company in Europe to further assess the performance of MPP therapy in patients unresponsive to standard CRT.

However, St. Jude’s core CRM division is still underperforming. Revenues from the CRM division fell 8% year over year in the first quarter of 2013. The beleaguered ICD market, as reflected by sustained implant volume pressure and the Riata/Durata lead issue, continues to hurt CRM results. ICD sales declined 5% in the first quarter but we believe that market trends will stabilize soon.

St. Jude’s peer Boston Scientific (BSX - Analyst Report) also reported disappointing CRM sales in the first quarter of 2013, indicating sustained softness in the CRM market. However, surprisingly, after a series of lackluster quarterly results, Medtronic (MDT - Analyst Report) reported encouraging CRM and ICD sales in its last reported quarter.

St. Jude currently has a Zacks Rank #3 (Hold). While we remain on the sidelines regarding STJ, Haemonetics (HAE - Analyst Report), with a Zacks Rank #1 (Strong Buy), warrants a look.

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