Morgan Stanley Does Not See Negatives for St. Jude Medical's Durata

Morgan Stanley has published a research report on St. Jude Medical STJ believing that QuickSite and QuickFlex quality problems will not have any bearing on outlook for Durata. In the report, Morgan Stanley writes, "This morning's announcement is a perceptual negative and will understandably reignite investor fears over St. Jude lead quality issues. However, the key question for St. Jude remains whether Durata leads are reliable, and problems in silicone leads more similar to Riata have limited value in providing an answer. The silicone insulation in QuickSite/QuickFlex is failing and leading to externalized conductors, just like Riata. In response, St. Jude is discontinuing the silicone-insulated leads and offering leads with Optim insulation, just as Durata replaced Riata." Morgan Stanley maintains its Equal-weight rating on St. Jude Medical, which is currently trading down $1.97 from yesterday's $43.80 closing price.