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St. Jude Investors Show Concern Amid Battery Issue; Abbott Reassures Deal Will Close

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St. Jude Investors Show Concern Amid Battery Issue; Abbott Reassures Deal Will Close

Shares of St. Jude Medical, Inc. (NYSE: STJ) and Abbott Laboratories (NYSE: ABT) traded in the red after reports of battery issue.

Abbott agreed to buy St. Jude for about $25 billion last April.

Investors appear worried about reports from Muddy Waters, which Tweeted Monday night about anonymous source providing documents indicating that St. Jude might soon reveal premature battery depletion resulting in the death of two persons.

Tuesday morning, the FDA issued a statement that said the issues related to batteries were made before May 2015 and that it might "run out earlier than expected." The regulator indicated that it continued to inquire into the allegations of Cybersecurity vulnerability that included Merlin Home System.

Following these developments, Abbott issued a clarification that it continues to see the acquisition to be completed before the current year ends.

Reuters reported that close to 400,000 devices were made until May 2015. The report indicated that about 841 faulty defibrillators were discovered with lithium clusters. Physicians were also given the instructions to replace devices immediately.

St. Jude CMO, Mark Carlson, has reportedly indicated that the company offered information to doctors to discuss the appropriate course of action with every patient. According to the report, Carlson encouraged patients to approach their physicians though he termed the risk as small.

Shares of both companies were down more than 3.5 percent.

 

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