St. Jude Lowers Hospitalization 53% - Analyst Blog

St. Jude Medical Inc. STJ revealed another positive study results data presented at Heart Rhythm 2014 – the Heart Rhythm Society's Annual Scientific Sessions. The data revealed that the use of St. Jude's Medical Quartet Quadripolar LV lead lowered the number of hospitalizations by 53% compared to patients in the non-quadripolar group.

The lower hospitalization rate translated into a statistically significant 62% reduction in overall costs for both health care systems and patients. The data also showed that the patients using the St. Jude's quadripolar lead had a 98% probability of having lower costs than patients with non-quadripolar leads.

Following the breakout of this data, shares of the company climbed 1.4% till the last closing date.

The study focused on two types of hospitalizations – heart failure and LV lead surgical revision. It involved 198 patients over three years, implanted with either a St. Jude Medical Quartet Quadripolar LV lead or a non-quadripolar LV lead.

Recently, St. Jude Medical also revealed that according to data presented at Late Breaking Clinical Trial Session during Heart Rhythm 2014, patients adhering to St. Jude Medical Merlin Remote Monitoring System had more than twice (2.4x) the probability of survival than that of patients without remote monitoring.

The results of this study were derived from more than 260,000 patients implanted with either pacemakers or defibrillators. The observational study showed that greater adherence to remote monitoring enhances the well-being of patients and reduces mortality.

According to the study, patients with high adherence to remote monitoring had a 58% reduced likelihood of mortality than patients without using remote monitoring and a 35% reduced likelihood of mortality than patients with low remote monitoring. Although the results may vary according to geographic regions, socioeconomic factors were not associated with remote monitoring use.

St. Jude Medical posted a 4.3% rise in adjusted net earnings per share to 96 cents for the first quarter of 2014 from 92 cents a year-ago. With this, the company beat the Zacks Consensus Estimate by a penny and met its own guidance of 94 and 96 cents per share for the quarter.

Revenues grew about 2.0% to $1,363 million for the quarter, exceeding the Zacks Consensus Estimate of $1,355 million as well as the company's own guided range of 1,280 to $1,360 million. Unfavorable foreign currency translation reduced revenues by roughly $25 million.

For the second quarter of 2014, St. Jude Medical expects revenues in the range of $1,380 to $1,460 million while the company anticipates adjusted net earnings per share to lie between 99 cents and $1.01 for the quarter. The current Zacks Consensus Estimates for earnings per share and revenues for the quarter are pegged at $1.00 and $1,437 million.

For full year 2014, St. Jude Medical upgraded its revenues guidance to the range of $5,610 to $5,760 million from the prior range of $5,600 to $5,750 million. It also upgraded its adjusted earnings per share guidance to $3.95–$4.00 from the prior range of $3.94–$3.99. The current Zacks Consensus Estimates for earnings per share and revenues for the year are pegged at $3.98 and $5,702 million.

Currently, St. Jude retains a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry that are also worth considering include Cardica Inc. CRDC, Eagle Pharmaceuticals Inc. EGRX, and Exactech Inc. EXAC. All of them retain a Zacks Rank #2 (Buy).