St. Jude Defibrillator Warning Causes Possible Investor Concern

St. Jude’s defibrillators have been a cause of investor concern after news last week that a Food Drug Administration warning letter could be forthcoming concerning one of St. Jude Medical’s California plants.

After the buzz about St. Jude’s defibrillators began circulating, shares in the company took a tumble on the stock exchange, and St. Jude Medical Chief Executive Officer Dan Starks admitted that the possibility was a “risk, and don’t be shocked if that risk is realized” during an investor call late last week.

But when Reuters asked CFO John Heinmiller why the company believed that St. Jude defibrillators could be the subject of the FDA’s scrutiny and what led to the idea they might receive an FDA warning letter, Heinmiller said it was “too early to speculate” on the reasons.

St. Jude defibrillators have been in and out of the news for a while now after it was discovered that some issues with wiring existed on the devices. However, despite the ongoing issue, no larger impact on St. Jude Medical’s fiscal health is anticipated — Jeff Jonas, portfolio manager for Gabelli Health and Wellness Trust Mutual Fund, commented:

“Even if they get a warning letter, I don’t think it’ll have any impact on their business … But it’s a negative in light of their lead issues, and the weaker sales. I’m betting Medtronic will be the main beneficiary [of the uncertainty.]”

Starks was also forthcoming about the effects to date of the issues with St. Jude defibrillators, and he said:

“We’ve lost share in high-voltage leads … There’s no question about it.”

St. Jude Medical, the company that makes St. Jude defibrillators, posted lower than expected earnings as last week closed out.