St. Jude's Alliance with Abbott - Analyst Blog
26 April 2012 - 2:16AM
Zacks
St. Jude Medical Inc. (STJ) recently disclosed
its decision to build on its mutual agreement with Abbott
Laboratories (ABT) by revealing the long-term Choice
Alliance joint venture. This initiative provides St. Jude Medical
the opportunity to incorporate Abbott's drug-eluting stents with
its cardiovascular, cardiac rhythm management and electrophysiology
offerings.
Both companies have agreed to endorse each other’s products to
their respective customers. Further, Abbott has received the rights
to promote St. Jude’s RadiAnalyze Xpress Measurement System and the
ILUMIEN PCI Optimization System.
This alliance is expected to benefit patient outcomes, as
doctors will be able to combine Abbott’s XIENCE family of stents
with St. Jude’s optical coherence tomography (OCT) and fractional
flow reserve (FFR) know-how to widen the scope of clinical
treatments.
Abbott Laboratories is a global manufacturer of a vast array of
health care products. Pharmaceuticals, medical and nutritional
offerings, including cardiovascular devices, are the core
franchises of the company. Within the vascular segment, the XIENCE
family of products (Xience V, PRIME and nano) was the worldwide
market leader of drug eluting stents in 2011.
St. Jude is consistently producing revenue growth and positive
earnings surprises over the past several quarters. We are impressed
by its solid fundamentals, healthy growth trajectory, strong
product mix, robust pipeline and cost management initiatives.
While a host of new growth drivers (including new products and
expansion in emerging markets) are expected to boost results in
2012 and beyond, we remain cautious about increased competition, a
still-soft CRM market and the dilutive impact of
acquisitions.
Th CRM space continues to thwart St. Jude as well as its peers
Medtronic (MDT) and Boston
Scientific (BSX). Our long-term Neutral recommendation on
St. Jude is in agreement with the short-term Zacks #3 Rank (Hold)
retained by the stock.
ABBOTT LABS (ABT): Free Stock Analysis Report
BOSTON SCIENTIF (BSX): Free Stock Analysis Report
MEDTRONIC (MDT): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
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