St. Jude’s Sales Jump 12 Percent During Q3
St. Jude Medical reported a 13 percent gain in international sales during the three-month period ending October 1, as all five of its product divisions brought in annual sales growth. When factoring in its U.S. sales increase of 11 percent, the Little Canada-based medical devices company’s total sales rose 12 percent—from $1.34 billion a year ago to $1.5 billion.
St. Jude’s heart failure business grew into becoming the company’s second-largest product division by revenue size. It led the pack with its global sales up 46 percent year-over-year to $351 million. Most of the company’s other divisions recorded increases in worldwide sales from a year ago: neuromodulation was up 17 percent to $141 million; atrial fibrillation was up 14 percent to $316 million, and cardiovascular disease was up 8 percent to $313 million.
St. Jude’s largest division, its traditional cardiac rhythm management business, was the sole division to report a revenue drop (down 7 percent to $378 million), which was due to a double-digit decrease in U.S. sales.
“Third quarter results continue to confirm that our innovation based growth strategy is on track,” said St. Jude CEO Michael T. Rosseau in prepared remarks.
He added that the $25 billion sale of St. Jude to Abbott Laboratories, announced in April, is expected to close in the next quarter.
Overall for the quarter, St. Jude reported $212 million in profit, or 73 cents per share. Wall Street analysts had predicted earnings per share of $1.01 and $1.5 billion in revenue.
During early morning trading, investors pushed St. Jude’s shares above its previous close of $79.44 to $79.68. That has since soured and the company’s stock price has dropped below the Tuesday close, due in part to further claims by two research firms that more St. Jude products are susceptible to cyber attacks.
A timed attack
Coinciding with St. Jude’s quarterly release were a series of videos from short-selling firm Muddy Waters and research firm MedSec Holdings, both of which stand to benefit from a decline in St. Jude’s share price.
On Muddy Waters’ website are videos purportedly demonstrating cybersecurity vulnerabilities in St. Jude’s remote heart monitoring system Merlin@home. The research firm claims its videos “detail four new attacks that show the Merlin@home can be made to broadcast potentially lethal commands to implantable devices.”
St. Jude responded in a statement Wednesday morning, which said: “This behavior continues to circumvent all forms of responsible disclosure related to cybersecurity and patient safety and continues to demonstrate total disregard for patients, physicians and the regulatory agencies who govern this industry. We take this matter very seriously and will once again work to quickly evaluate this new information.”
Additionally, the medical device company noted its announcement from Monday that it would be forming a Cyber Security Medical Advisory Board.
Dr. Mark Carlson, the chief medical officer at St. Jude, said the board would “work with technology experts at St. Jude Medical as well as external researchers to help us maintain and enhance cyber security and patient safety.”
Since Muddy Watters began making cybersecurity claims in August, St. Jude’s stock price has slid more than 3.5 percent to date.