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St. Jude Medical's MOMENTUM 3 IDE Study Results Encourage

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Headquartered in St. Paul, MN, St. Jude Medical Inc. (STJ - Free Report) recently announced positive results from its MOMENTUM 3 U.S. IDE Clinical Study, which compared the HeartMate 3 Left Ventricular Assist System (LVAS) to the HeartMate II LVAS in treating advanced stage heart failure.

Notably, the trial results were featured in the American Heart Association (AHA) Scientific Sessions in New Orleans. MOMENTUM 3 is the largest left ventricular assist device (LVAD) trial in the world that featured both short and long-term heart failure patients in a single study.

The HeartMate 3 LVAS is an implantable mechanical circulatory support (MCS) device for heart failure patients. In fact, it is the first CE marked LVAD with Full MagLev technology.

Coming to the results, there was a notable 86.2% survival rate of patients receiving HeartMate 3 LVAS. MOMENTUM 3 enrolled more than a thousand patients with New York Heart Association Class IIIB or IV heart failure. Currently, the patients are on track for a follow-up within short-term endpoint of six months, and a long-term endpoint of two years.

Meanwhile, St. Jude surged almost 0.8% to close at $79.77, following the news. In fact, the current sentiments are quite bullish with the company representing a stellar one-year return of approximately 25.8%, much better than the S&P 500’s almost 4.5% in the same timeframe.

Of the other recent developments for St. Jude, the U.S. FDA approval for the Proclaim Elite Spinal Cord Stimulation (SCS) System is notable. This system boosts full-body magnetic resonance imaging (MRI) diagnostic scan and delivers access to BurstDR stimulation therapy. Meanwhile, we note that St. Jude is set to be acquired by Abbott Laboratories by end-2016, in a multi-billion deal. St. Jude’s shareholders are expected to get $46.75 in cash and 0.8708 shares of Abbott common stock.

Coming back to the latest development, per management, the HeartMate 3 LVAS is the advanced version of HeartMate II LVAD, which is approved for both Bridge-to-Transplant and Destination Therapy options in the U.S. The company also foresees further progress in these platforms going ahead.

Our Take

St. Jude has been a leading global manufacturer and distributor of innovative cardiovascular and implantable neurostimulation medical devices. Notably, the company‘s Heart Failure (HF) segment comprises cardiac resynchronization therapy products, ventricular assist devices and CardioMEMS HF System products. In this segment, sales surged 46% at constant currency to $351 million in the last reported quarter, driven by higher sales of ventricular assist devices (third-quarter 2016).

In fact, we believe St. Jude is set to gain significant market traction in the coming quarters as well, taking the global market sentiments into consideration. In this regard, the global ventricular assist device market is set to reach a worth of $1.98 billion by 2022, as per a report by the ‘Medical Device And Diagnostic Industry’.

Zacks Rank & Key Picks

Currently, St Jude has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical space include Baxter International Inc. (BAX - Free Report) , NxStage Medical, Inc. (NXTM - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) , all of which sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Baxter International represents a strong long-term expected growth rate of 12.3%. Notably, the company has a solid one-year return of roughly 20.9%.

NxStage Medical has a stellar one-year return of roughly 31.7%. The company also has a promising long-term expected growth rate of 18.3%.

IDEXX Laboratories represents a solid one-year return of almost 64.9%. The company has a long-term expected growth rate of almost 14.96%.

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