Sector News

St. Jude Medical reportedly in talks for California heart device company

July 22, 2015
Life sciences
One day before St. Jude Medical’s quarterly report, investors on Tuesday reacted positively to news that the medical device firm is negotiating a $3 billion deal to buy a market-leading heart-failure device maker in California.
 
Bloomberg, citing unnamed sources, reported Tuesday that St. Jude is in talks to buy Thoratec Corp. of Pleasanton, Calif. It cautioned that the negotiations may still fall apart. Neither company confirmed the report. A St. Jude spokeswoman said the company has a policy of not ­commenting on speculation.
 
In an investors’ note, Needham & Co. analyst Mike Matson estimated such a deal could be worth $3.3 billion, and would fit well with St. Jude’s recent focus on heart-failure devices.
 
“If the transaction is consummated, it would likely be a good one for St. Jude,” Sterne Agee CRT analyst Shagun Singh Chadha wrote in a different note to investors. “Thoratec is an attractive asset in the mechanical circulatory support market.”
 
Thoratec makes a type of implantable mechanical circulatory support system called a left ventricular assist device (LVAD), which helps the heart pump oxygenated blood through the body in patients with end-stage heart failure.
 
Unlike pacemakers and implantable defibrillators — longtime staples of St. Jude’s product line — LVADs take over much of the physical work pumping oxygenated blood into the body’s main artery. They’re reserved for the sickest heart-failure patients, including those who need a “bridge” to survive to heart transplant and those needing a long-term treatment because they can’t get a new heart.
 
Dr. Benjamin Sun, a cardiothoracic surgeon at Abbott Northwestern Hospital and researcher at the Minneapolis Heart Institute Foundation, said studies show heart-failure patients who get LVADs have an 80 percent survival rate after one year, and a 10 percent risk of side effects like stroke and infection. That’s nearly as good as the one-year mortality data for heart-transplant patients, he said.
 
“The fact that we are actually competing with heart transplant in terms of outcomes and quality of life is absolutely rewarding,” said Sun, who has worked as a paid consultant for Thoratec in the past. “At some point now we are going to hit the inflection point where this technology will actually be better than transplant. I feel very strongly about that.”
 
Thoratec controls about 60 percent of the $700 million global market for mechanical circulatory support devices, Chadha wrote. Former Vice President Dick Cheney made news when he got a Thoratec HeartMate 2 LVAD implanted in 2010. The HeartMate 3 is expected to launch in Europe late this year.
 
Thoratec reported a $50.4 million profit on $477.6 million in revenue for the 12 months ended Jan. 3. That’s down from a $73.3 million profit on $502.8 million in revenue for the previous year. St. Jude reported a $1 billion profit on $5.62 billion in revenue in its most recent fiscal year. Stock in St. Jude rose 0.2 percent on Tuesday, to $76.17. Thoratec stock jumped 18 percent to $57.58. Matson estimated a cash-and-debt deal to buy Thoratec would add 2 percent to St. Jude’s earnings per share in 2016, and twice as much the next year.
 
St. Jude is set to release results for its most recent quarter Wednesday. Wall Street expects the company to report earnings per share of $1, down from $1.02 in the same quarter last year.
 
By Joe Carlso
 
Source: Star Tribune

comments closed

Related News

January 29, 2023

Colorcon, Inc. signs Put agreement with intent to acquire controlled atmosphere packaging specialist Airnov Healthcare Packaging

Life sciences

Airnov provides critical healthcare industries with high-quality, controlled atmosphere packaging, to protect their products from moisture and oxygen. The business has manufacturing facilities in the USA, France, China and India and employs around 700 people.

January 29, 2023

Takeda pledges up to $1.13B for rights to Hutchmed’s cancer drug fruquintinib outside of China

Life sciences

Takeda of Japan has partnered with Hong Kong-based Hutchmed, gaining the commercial rights to colorectal cancer drug fruquintinib outside of China for $400 million up front, plus $730 million in potential milestone payments. Takeda also will help develop fruquintinib, which can be applied to subtypes of refractory metastatic colorectal cancer, regardless of biomarker status, the companies said.

January 29, 2023

Vir taps Bayer dealmaker Marianne De Backer as its next CEO

Life sciences

On April 3, Scangos, who’s been chief executive officer at Vir since the start of 2017, will hand over the reins to Marianne De Backer, Ph.D. De Backer comes over from Bayer, where she currently heads up pharmaceutical strategy, business development and licensing. Alongside her CEO appointment, De Backer is set to join Vir’s board of directors, the company said Wednesday.

How can we help you?

We're easy to reach