St. Jude Medical ($STJ) is trying to quickly quash any concerns about its Durata defibrillator lead. Less than two weeks ago, an anonymous physician report to the FDA indicating that the product failed in a single patient sent the company's stock into a tailspin. Like a CSI investigator, the company tracked down the lead in question and determined it was damaged due to external abrasion--by scraping against something within the body. To St. Jude's likely relief, that's very different than the "inside-out abrasion" that damaged Riata leads and drove the company to pull the leads from the market in 2010, and the FDA to issue a Class I recall last December.
When reports surfaced about the Durata lead damage (it was removed from the patient in question), investors worried that this was the Riata controversy all over again that drove the company's stock price down 6% on June 12.
But St. Jude tracked the anonymous case down to a Florida hospital, where it examined fluoroscopy images and photographs of the extracted lead, as well as the lead itself. St. Jude determined that the Durata lead damage was "consistent with external abrasion from contact with a calcified, hardened, heart valve or possibly from lead-to-lead contact." External abrasion, the company emphasized, "is a known cause of failure across all cardiac leads in the industry" and very different from the problems some Riata leads faced.
Separately, St. Jude said it wants to "work closely with physicians" to understand any device malfunction and wants them to report any future lead failures "to the manufacturer for further inspection and analysis to best ensure we are able to validate and communicate information in the interest of patient safety."
Of course, St. Jude timed its release to just before the close of trading on the New York Stock Exchange. As Reuters notes, relieved investors nudged the stock up to $37.90, a 2.6% increase.
- read St. Jude's release
- check out Reuters' take