St. Jude Medical to invest $60M in CardioMEMS

St. Jude Medical, Inc. (NYSE: STJ), a global medical device company, and privately-held CardioMEMS today announced that they have reached an agreement under which St. Jude Medical will make a $60 million equity investment in CardioMEMS, a medical device company that has developed a wireless sensing and communication technology to assess cardiac performance. The agreement provides St. Jude Medical an immediate 19 percent ownership in CardioMEMS and the exclusive option to acquire the company for an additional payment of $375 million during the period that extends through the completion of certain commercialization milestones.

“CardioMEMS Heart Sensor Allows Monitoring of Pressure to Improve Outcomes in NYHA Class III Patients”

CardioMEMS' wireless monitoring technology can be placed directly in the pulmonary artery to assess cardiac performance via measurement of pulmonary artery pressure (PAP). The implant procedure is fast, simple and can be performed by any physician who does right-heart catheterizations. The sensor transmits real-time hemodynamic data via an external monitor to the patient's clinic for review. PAP is a commonly used measurement to assess heart failure (HF) patients in hospitals. With CardioMEMS' technology, doctors can obtain this critical information without the need for a cardiac catheterization. Patients can transmit these readings from their homes, and with this vital information, physicians can more effectively direct treatments to keep patients out of the hospital.

The CardioMEMS monitoring system is supported by strong clinical evidence, including the CHAMPION ("CardioMEMS Heart Sensor Allows Monitoring of Pressure to Improve Outcomes in NYHA Class III Patients") trial, the results of which were presented in May 2010 at the European Society of Cardiology Heart Failure Congress in Berlin. The randomized, controlled CHAMPION trial studied the effectiveness of this device in New York Heart Association (NYHA) Class III HF patients, regardless of their ejection fraction, who had been hospitalized for HF in the previous 12 months. It found a statistically significant 30 percent reduction in the rate of HF related hospitalization at six months and 38 percent per year reduction in HF related hospitalizations during an average follow-up duration of 15 months.

Jay S. Yadav, M.D., Founder, Chief Executive Officer and Director of CardioMEMS said, "The CHAMPION trial provides great promise for patients suffering from chronic symptomatic heart failure. The results demonstrated the potential for hemodynamic monitoring to reduce the need for costly hospitalizations while improving quality of life. As we work toward the commercialization of this promising technology, we are excited to have the support of a company like St. Jude Medical, with its significant expertise and focus in the areas of cardiac rhythm management, heart failure disease management and other cardiac technologies."

"Technologies that help improve the management of heart failure can not only provide meaningful benefits for patients, but can also do so in a cost effective manner that is particularly important given recent health care reform in the U.S. and the attention to health care costs worldwide," said Eric S. Fain, M.D., president of the St. Jude Medical Cardiac Rhythm Management Division. "Investing in CardioMEMS reaffirms our commitment to technology platforms that improve heart failure management and the potential benefits of hemodynamic monitoring for both patients and the health care economic system."

This agreement does not change St. Jude Medical's outlook for 2010 consolidated earnings per share. In connection with the agreement, BofA Merrill Lynch is acting as financial advisor and Gibson, Dunn & Crutcher LLP as legal counsel to St. Jude Medical. J.P. Morgan Securities LLC is acting as financial advisor to CardioMEMS and Cooley LLP as legal counsel.