The Minnesota-based medical device company is dealing with gaps in its pacemaker and ICD folder, as well as reimbursement problems around its CardioMEMS heart failure monitoring system.
St. Jude Medical could be facing a rocky road this year. The Little Canada, MN-based maker of heart failure devices and more recently announced an earnings forecast that fell behind what analysts were predicting for the company.
Earnings could fall in the range of $3.95 to $4.05 per share, St. Jude announced Wednesday. Analysts at had been expecting around $4.18 per share on average, according to the Thomson Financial Network.
For the fourth quarter ended January 2, the company earned $113 million off $1.45 billion in sales, versus $245 million in profits off $1.44 billion in sales a year before. For the full year, the company earned $880 million off $5.54 billion in sales, versus $1.00 billion in profits off $5.62 billion in sales a year before.
Part of the tough situation is due to a temporary gap in St. Jude Medical's pacemaker and ICD portfolio: a lack of MRI-compatible devices available in the U.S. The situation has provided an inroad for Medtronic and other competitors already selling MRI-safe devices in the U.S. St. Jude is presently anticipating FDA approval of its MRI compatible pacemaker in the first half of 2016, and its MRI compatible ICD in the first half of 2017.
Overall Cardiac Rhythm Management sales were down 10% in the fourth quarter after adjusting for the impact of foreign currency.
Meanwhile, St. Jude Medical's new CEO Mike Rousseau told analysts on Wednesday that the company's CardioMEMS heart failure monitoring system is an "important clinical advancement and will in fact change the way heart failure is managed." For now, though, U.S. health providers are facing reimbursement problems. Rousseau says the company is "now in discussion with CMS to create a national coverage determination for implanted hemodynamic monitoring in order to establish clear coverage guidelines for CardioMEMS and increase access and coverage pathways for medicare eligible patients nationwide."
On a brighter note, sales at LVAD maker Thoratec, which St. Jude acquired for about $3.4 billion last year, grew 15% on a comparable constant currency basis for the full fourth quarter 2015.
Rousseau insists that St. Jude Medical has a solid strategy in place: "We are leading the market in our strategy to surround the patient care continuum in AF, heart failure and neuromodulation. Within these areas, we are bringing to market innovative, relevant technologies that help our customers treat patients throughout key stages of care. We are positioning ourselves to be the partner of choice in these targeted disease state areas."
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