St. Jude Medical, Inc. (NYSE:STJ) is in talks to acquire Spinal Modulation Inc. The company has recently announced its plans to do so, in an attempt to target DRG stimulation technology. With this move the St. Jude Medical aims to expand its portfolio of treatments for chronic pain. Spinal Modulation Inc. is the manufacturer of Axium Neurostimulator System. The acquisition would make St. Jude Medical the only device manufacturer to offer RFA, SCS and DRG stimulation therapies.
With this move the company also plans to help physicians create tailored treatments to a patient’s chronic pain. This would help make the therapies more effective. DRG stimulation has already been tested and has shown to provide relief to patients with chronic pain. The treatment is also useful for treating focal pain areas, which cannot be properly treated with SCS. The Axium system has been thoroughly tested and is awaiting FDA approval, before it hits the market in June 2015.
The COO at St. Jude Medical, Michael T. Rousseau, expressed his company’s commitment towards providing physicians with a wide range of options to treat chronic pain. He also said that DRG stimulation with the Axium system would enhance the company’s ability to reduce the burden of chronic pain. The current market for chronic pain is estimated to be composed of 1.5 billion people worldwide. This also affects a patient’s personal life, impacting the quality of life as a whole.
Just days after the announcement, STJ released its 1Q2015 earnings and also updated its expected 2Q2015. The EPS was upgraded to $0.99-$1.01, with the FY 2015 earning reaching $3.92-$3.97. The current earnings are also reported to be $0.93 for Q1, which was $0.02 higher than expected. The revenues were also reported to be $1.35 billion, $0.03 bilion more than analysts predicted. If the company is able to successfully complete the acquisitions, it could be looking at a very fruitful FY 2015.
St. Jude Medical, Inc. (NYSE:STJ) closed at $73.55, after gaining 6.41% on April 22. The company has 281.28 million shares being traded in the market, with a 52-week range of $54.80-$73.74.
