Medical Device Daily Executive Editor

SAN FRANCISCO — Dan Starks, chairman, president and CEO of St. Jude Medical (St. Paul, Minnesota), was glad to accept accolades for the company at this year's JPMorgan Healthcare Conference, having notched 29 consecutive quarters of meeting or exceeding analysts' earnings expectations. But his message to attendees here dealt more with the future than the past.

After rattling off statistics showing five-year compounded annual growth rates of 19.3% in revenues and 26.7% in earnings per share, he told the last-session-of-the-day audience in the Grand Ballroom of the Westin St. Francis Hotel: "The point is, we're not done."

As proof, he pointed to third-quarter results indicating that sales of St. Jude's implantable cardioverter defibrillators (ICDs) were up by 68%.

Starks added that over the past five quarters, the period in which the company had participated with a full line of ICD products, it had gained eight to nine points of global market share. "We expect to continue to grow market share," he said, adding that St. Jude anticipates "strong growth in ICD sales in 2006-2008."

So, what comes next after ICDs?

Starks devoted considerable time to hyping the company's efforts in the atrial fibrillation (AF or AFib) sector.

"The Afib patient pool is staggering," he said, numbering some 2.5 million in the U.S. alone. And, he added, "currently only 1% of the AF population is served with curative therapies."

Noting that St. Jude was the first company in the sector to create a separate division focused solely on AF — doing so a year ago this month — Starks said the acquisitions of Epicor Medical (Sunnyvale, California), Irvine Biomedical (Irvine, California) and Endocardial Solutions (also St. Paul) all were part of broadening the push in addressing opportunities in this area.

"Our advances [in AF] are accelerating," he said, adding: "St. Jude Medical's Afib program is out on the leading edge and far ahead of the rest of the sector."

Turning to the company's Cardiology Division, Stark said that business unit is "building on the leadership of the Angio-Seal vascular closure product line."

He pointed to the acquisition of Velocimed (Maple Grove, Minnesota) in April 2005 (Medical Device Daily, April 8, 2005) as a building block for the division and cited such key new products as the Premere PFP (patent foramen ovale) closure device, the Proxis embolic protection system and the Venture wire control catheter.

The company's Cardiac Surgery business was built on St. Jude's superiority in the mechanical heart valve space, an area where the company still dominates, but one that Starks acknowledged is a declining market.

To compensate for that falloff, St. Jude is, in his words, "becoming competitive" in tissue valves and valve repair programs. "We can leverage the excitement of our atrial fibrillation program into the Cardiac Surgery business," Starks said.

An area of particular excitement for the company is its Neurostimulation business, an entirely new business activity for St. Jude entered via its acquisition last year (MDD, Nov. 30, 2005) of Advanced Neuromodulation Systems (ANS; Houston).

"This is another large [over $1 billion], fast-growing [15% to 20% annually], under-penetrated [less than 10%] market," Starks said. ANS gives St. Jude an immediate No. 2 position in the largest segment, spinal cord stimulation.

"There is huge, long-term growth potential in additional indications such as migraine, depression, obesity, brain injury and Parkinson's disease," he said, adding that there also are both technological and geographic synergies to be achieved between the two companies.