Friday, November 23, 2012

St. Jude Medical, Inc (NYSE:STJ) Slumps As FDA Report Raises Questions Over Heart Device

A St. Jude Medical, Inc.(NYSE:STJ) Medical facility was being inspected by federal officials. They had submitted a report of the probe on Tuesday. The report has found significant flaws in the testing and oversight of the company associated to a controversial heart device component. The report is likely to raise questions on how St. Jude executives have recently explained the contents of the inspection to shareholders and others.

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The report submitted by FDA focuses on the way the company has handled a product, Durata, which is a crucial electrical wire connecting an implanted defibrillator to the heart of a patient. St. Jude reportedly used a material, Optim to insulate the component and safeguard its electrical veracity. However, there are several questions that are being raised about the reliability of Optim.

It was in October when St. Jude had filed a version of the probe report with the Securities and Exchange Commission but it had blacked out a number of portions of the report that were about Durata. At that time, the company had said that it was redacting the information that was based on elucidation of good faith.  

However, the FDA did not leave out the names of the products while releasing the report.

A spokeswoman of St. Jude, Amy Jo Meyer said that none of the observations in the inspection report were realized as a particular issue relating to the clinical performance of any product of St. Jude. She mentioned that the company would not be commenting on the matter since company communications with regulatory bodies are top secret with a few exceptions.

The company has been under the radar for months because of its tackling with issues with a previous lead sold by the company, named Riata that was failing in a number of patients. The company had ceased selling that lead in the year 2010; however, it is believed to be implanted in nearly 1`28,000 patients worldwide.
Shares of the company slumped 12.15% in Wednesday’s session.

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