May 29--St. Jude Medical Inc. has waited nearly four years to get regulatory approval of a wireless heart monitoring system in which it had a partial ownership stake.
On Wednesday, the Food and Drug Administration gave the device the go-ahead, and the Little Canada-based company said it will pay an additional $375 million to take full ownership of CardioMEMS, the Atlanta company that developed the system.
The monitor uses a wireless sensor, the size of a dime, placed in the pulmonary artery that transmits information from patients' homes to their health care providers. It allows doctors not only to see what's going on in the heart, but to actively manage rising blood pressure in the artery -- a warning sign that often starts before other more commonly tracked indicators of trouble become evident, such as changes in weight or blood pressure.
Dr. Eric Fain, group president of St. Jude Medical, said the system "adds another important tool for managing heart failure patients."
In the hospital, heart failure patients can be monitored and have fluid removed that is associated with congestive heart failure. But when they go home, "physicians no longer had the ability to monitor," Fain said. "They had to rely on symptoms and having patients weigh themselves."
More than 5 million Americans have heart failure, which happens when the heart can't keep up with the body's workload, causing blood pressure to build up in the pulmonary artery. Heart failure is among the most common reasons for hospitalizations for those over 65.
An FDA panel twice gave the CardioMEMS system mixed reviews, in December 2011 and again last October. But results from a randomized, controlled clinical trail published in the Lancet demonstrated the product's potential, St. Jude Medical officials believe. After six months, hospitalization rates were reduced by 28 percent. After 15 months, patients using the heart monitoring system saw hospitalizations decline by 37 percent.
St. Jude spent $60 million for a 19 percent share of CardioMEMS in September 2010, with an exclusive option to purchase the remaining 81 percent. The company, which describes the monitoring system as "game-changing technology," said it expects to close on the deal in the second quarter of this year.
Analysts said the acquisition puts St. Jude Medical in a strong position, as federal health reform efforts put hospitals on the financial hook for readmissions, and providers seek tools to prevent patients from bouncing back in after being sent home.
J.P. Morgan analyst Michael Weinstein said in a research note that the purchase can be a "significant growth driver," because the scale of the problem is so enormous and CardioMEMS' system could represent a huge technological advance.
"In today's cost conscious environment," Weinstein added, "it's important to note that this technology checks all of the economic boxes as well."
Shares of St. Jude Medical were up 2.5 percent to $65.76 Wednesday.
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