Barclays Maintains an 'Overweight' on St. Jude Medical (STJ); Panel Disappoints - Thoughts on CardioMEMS
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Price: $80.82 --0%
Rating Summary:
3 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
3 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays maintains an 'Overweight' on St. Jude Medical (NYSE: STJ) price target of $51.00.
Barclays analyst says, "After the close on December 8, 2011, a FDA panel voted 4-6 'against' the device's benefits outweighing its risks (safety was 9-1 'for', while only 3 voted for efficacy, with 7 against). While most panel members "wanted it to work", at the end of the day, many voted negatively, given an inability to separate the benefit of the device from the system (including the support network). Panelists were frustrated in having to vote no (one called it "extremely painful") and expressed a hope that CardioMEMS would bring the device back to the FDA with a new study. Net-net, we anticipate that the panel will lead to a denial of approval this go-round and CardioMEMS will likely have to perform another study to bring its system to market in the US (it has a CE Mark)."
"As a reminder, STJ made a $60mn equity investment in CardioMEMS (19% stake) and has the exclusive option to acquire it for $375mn after completion of "certain commercialization milestones". STJ noted at its 2011 analyst day that its option is triggered "at the time the company gets FDA approval" and it can buy CardioMEMS through a period beyond that. Given the panel result, we are removing CardioMEMS revenue from our STJ model in 2012 ($31mn) and 2013 ($54mn); this reduces our 2012 EPS by $0.02 to $3.59."
For an analyst ratings summary and ratings history on St. Jude Medical click here. For more ratings news on St. Jude Medical click here.
Shares of St. Jude Medical closed at $35.83 yesterday.
Barclays analyst says, "After the close on December 8, 2011, a FDA panel voted 4-6 'against' the device's benefits outweighing its risks (safety was 9-1 'for', while only 3 voted for efficacy, with 7 against). While most panel members "wanted it to work", at the end of the day, many voted negatively, given an inability to separate the benefit of the device from the system (including the support network). Panelists were frustrated in having to vote no (one called it "extremely painful") and expressed a hope that CardioMEMS would bring the device back to the FDA with a new study. Net-net, we anticipate that the panel will lead to a denial of approval this go-round and CardioMEMS will likely have to perform another study to bring its system to market in the US (it has a CE Mark)."
"As a reminder, STJ made a $60mn equity investment in CardioMEMS (19% stake) and has the exclusive option to acquire it for $375mn after completion of "certain commercialization milestones". STJ noted at its 2011 analyst day that its option is triggered "at the time the company gets FDA approval" and it can buy CardioMEMS through a period beyond that. Given the panel result, we are removing CardioMEMS revenue from our STJ model in 2012 ($31mn) and 2013 ($54mn); this reduces our 2012 EPS by $0.02 to $3.59."
For an analyst ratings summary and ratings history on St. Jude Medical click here. For more ratings news on St. Jude Medical click here.
Shares of St. Jude Medical closed at $35.83 yesterday.
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