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Shares of medical devices giant, St. Jude Medical Inc. (STJ - Analyst Report), rose 3.1% to $52.52 on Sep 6, following Fitch’s re-affirmation of the company’s debt ratings as well as the U.S. Food and Drug Administration’s (FDA) decision to review a new product. The stock price is very close to the 52-week high of $54.06 on Aug 9.

Credit rating agency Fitch has reiterated STJ’s Issuer Default Rating (IDR) at 'A' and said that Rating Outlook is ‘Stable’ based on the company’s outstanding debt of $3.61 billion as of Jun 30, 2013. The agency is confident that the company will successfully de-leverage in the next 18 months, on the back of modest volume growth and improving margins, along with a decent liquidity position.

Additionally, on the same day, an FDA committee announced that on Oct 9, 2013, it will discuss information related to the pre-market approval application for privately-held cardiac devices company CardioMEMS’ Champion Hear Failure (HF) Monitoring device. St. Jude has a 19% stake in the company and has agreed to acquire it on successful completion of a significant milestone.

In 2011, the Champion HF device failed to win regulatory approval due to lack of convincing clinical research support. However, in the beginning of 2013, in an effort to strengthen its relation with CardioMEMS, St. Jude had announced that it will provide $28 million in debt financing to gain an FDA approval for this system.

The CardioMEMS HF System is a permanently implantable pressure measurement system designed to provide daily pulmonary arterial pressure measurements including systolic, diastolic, and mean pulmonary arterial (PA) pressure. These measurements are used to guide treatment of congestive heart failure. U.S. FDA approval of this new offering should significantly boost the company’s dwindling top line growth.

The two back-to-back good news regarding St. Jude has bolstered investor confidence, leading to a hike in stock price. Currently, the stock has a Zacks Rank #3 (Hold). Although the company is managing to grow its bottom line on the back of an improving operating margin, STJ’s sluggish top line growth remains an area of concern amid the difficult MedTech industry environment.

Other medical stocks worth considering include Alere (ALR - Snapshot Report), carrying a Zacks Rank #1 (Strong Buy), as well as Boston Scientific (BSX - Analyst Report) and Exactech (EXAC - Snapshot Report), both carrying a Zacks Rank #2 (Buy).

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