Portfolio Press Release
St. Jude Medical Completes Acquisition of Epicor Medical, Inc.
St. Paul, MN — (BUSINESS WIRE) — June 8, 2004 — St. Jude Medical, Inc. (NYSE:STJ) announced today that it has completed the acquisition of Epicor Medical, Inc., the leader in the development of High Intensity Focused Ultrasound (HIFU) devices for the surgical ablation of cardiac tissue. St. Jude Medical paid $185 million in cash for all of the outstanding capital stock of Epicor Medical, Inc. that it did not already own. In May 2003, St. Jude Medical acquired an initial ownership position in Epicor Medical, Inc. for $15 million in cash.
Epicor Medical, Inc., located in Sunnyvale, California, was founded in 1999 to develop new technologies for cardiac ablation. Epicor has successfully completed a multi-center European clinical evaluation of its High Intensity Focused Ultrasound (HIFU) ablation system for the epicardial ablation of cardiac tissue. Using a proprietary approach, the Epicor technology allows an ablation device to be placed on the outside of a beating heart and deliver high intensity focused ultrasound energy across the wall of the heart to create very precise and complete lines of cardiac tissue ablation.
Epicor Medical has received 510(k) regulatory clearances from the U.S. Food and Drug Administration (FDA) for the ablation of cardiac tissue with Epicor Medical's HIFU ablation system including the UltraWand(TM) and UltraCinch(TM) devices. In addition, Epicor Medical's HIFU ablation system has received CE Marking approval in Europe. St. Jude Medical will initiate limited sales in the third quarter in the context of an expanded training and market development program. This program does not change the Company's existing guidance for second quarter or full year 2004 earnings per share.
Commenting on the completion of the Epicor Medical acquisition, St. Jude Medical Chairman, President and CEO Daniel J. Starks said, "The acquisition of Epicor Medical further strengthens St. Jude Medical's position in the treatment of cardiac arrhythmias, including atrial fibrillation. HIFU technology, together with Epicor's intellectual property and devices, represents an important addition to the Company's portfolio of technology for clinicians to treat cardiac rhythm disorders. We look forward to combining the resources of Epicor and St. Jude Medical to continue advancing this technology for the benefit of cardiac arrhythmia patients around the world."
Epicor Medical met or exceeded all regulatory and clinical milestones previously established as a condition to the acquisition, including the requirement that at least 80% of the patients treated with the Epicor system remained free of atrial fibrillation as well as left-atrial re-entrant tachycardia as documented by a six month post-procedure electrocardiogram. "We have been particularly encouraged that the clinical results investigators achieved with the Epicor Medical HIFU surgical ablation system exceeded the contract milestone of at least 80% success, especially since the majority of patients enrolled in this clinical trial were patients in chronic atrial fibrillation," commented Jane J. Song, President of St. Jude Medical's Cardiac Surgery business. "We look forward to a complete report on the success of this clinical trial in an appropriate peer-reviewed publication."
Epicor Medical has worked closely with Dr. James Cox, Professor of Surgery, Division of Cardiothoracic Surgery, Washington University School of Medicine, St. Louis, Missouri, to develop its HIFU ablation system and the related surgical procedure. Dr. Cox is the developer of the Cox-Maze surgical procedure for the treatment of atrial fibrillation and acknowledged by his peers as a leader in this field.
Dr. Cox said, "I find the Epicor Medical approach the most compelling technology available to surgeons in performing an AF ablation in that it is the only energy source that allows surgeons to replicate the mini-maze lesion set precisely on beating hearts. The clinical data demonstrates that the unique properties of HIFU and the design of the Epicor devices can facilitate epicardial, off-pump, and minimally invasive therapy for AF patients. The Epicor Medical technology has the potential to open up entirely new patient populations to procedures and levels of success not previously available to clinicians to deal with the impacts of atrial fibrillation."
On behalf of Epicor Medical, Inc., Casey Tansey, CEO and President, said, "The Epicor team looks forward to joining St. Jude Medical and continuing the efforts of both companies to treat atrial arrhythmias with multiple technologies, leveraging St. Jude Medical's unparalleled access to the cardiac surgery clinical community."
Atrial fibrillation (AF) is a widespread cardiac rhythm disorder in which the upper chambers of the heart do not beat effectively because of abnormal electrical activity. AF results in reduced cardiac output, exacerbates heart failure and can result in the pooling and clotting of blood in the heart, leading to stroke or other neurological problems. The prevalence of atrial fibrillation worldwide is in excess of 6 million. The disorder is progressive, expanding in incidence and severity with age. The various treatments available at this time are largely only palliative. The economic impact to health care systems of AF is increasing as the population ages.
The acquisition of Epicor Medical, Inc. expands St. Jude Medical's "Surround AF" strategy offering clinicians sophisticated devices and catheter systems to diagnose, suppress and cure atrial fibrillation. St. Jude Medical pacemaker and ICD products incorporate the Company's unique AF Suppression(TM) algorithm, the first clinically proven technology to suppress atrial fibrillation. The Company also offers a broad array of advanced catheter systems for use by physicians in the clinical management of patients with atrial fibrillation. An investigational device exemption (IDE) application has been approved by the FDA for a feasibility study using St. Jude Medical's proprietary Lineage(TM) PV ablation system to treat AF with a catheter based system.
Any statements made regarding the Company's anticipated future product launches, regulatory approvals, revenues, earnings, market shares, and potential clinical success are forward-looking statements which are subject to risks and uncertainties, such as those described in the Financial Section of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2003 (see pages 11-16). Actual results may differ materially from anticipated results.
St. Jude Medical, Inc. (www.sjm.com) is dedicated to the design, manufacture and distribution of innovative medical devices of the highest quality, offering physicians, patients and payers unmatched clinical performance and demonstrated economic value.
CONTACT:
St. Jude Medical, Inc., St. Paul
Investor Relations:
Laura Merriam, 651-766-3029
or
Media Relations:
Peter Gove, 651-481-7790
SOURCE: St. Jude Medical, Inc.