Will Battery Depletion Issue Drain St. Jude Medical's Market Share?

St. Jude Medical has announced a problem with premature battery depletion for some of its high-voltage cardiac devices. What will this setback mean for the company's market share and ongoing acquisition by Abbott?

Physicians and patients have been notified about a deadly problem with premature battery depletion in some St. Jude Medical ICDs and CRT-Ds. The drained batteries have led to an absence of defibrillation therapy that is associated with two patient deaths.

In an October 11 letter to physicians, the company explained that lithium material in the device batteries can form clusters and if those clusters connect the cathode and anode part of the battery, it can short circuit the battery. Evidence of these lithium clusters was found in 841 devices returned to St. Jude Medical for premature battery depletion and 46 of these showed bridging between the cathode and anode, according to the release. The lithium cluster issue is rare, observed so far in 841 devices out of a total 398,740 sold, or 0.21%.

"We are contacting physicians to provide details regarding risk and patient management recommendations because premature battery depletion has been observed to occur within days," the company stated in its letter to doctors.

The worldwise advisory applies to some of St. Jude Medical's high-voltage devices made before May 23, 2015, including Fortify, Fortify Assura, Quadra Assura, Unify, Unify Assura, and Unify Quadra ICDs and CRT-Ds. Physicians were urged to contact any affected patients and a web page with more information for patients is available here.

After the advisory was released, St. Jude Medical's stock price ($STJ) dropped, closing down 3.5% at the end of trading on October 11. Although it was a down day for the market, other public cardiac rhythm management company stocks traded down too, on concerns that the premature battery depletion issue might not be isolated to St. Jude Medical devices. Boston Scientific ($BSX) closed the day down 2.5% while Medtronic was down 3.5%.

Avi Fischer, MD, St. Jude's medical director and vice president of global education, told sister publication Qmed that the risk of lithium clusters is "not exclusive to St. Jude Medical."

Both Medtronic and Boston Scientific were quick to distance their products from the affected St. Jude Medical devices. A Medtronic spokesperson said that the company is still learning about St. Jude Medical's investigation and that though all high-power devices use lithium batteries, "we use a different battery than SJM."

A Boston Scientific spokesperson told MD+DI, "We made improvements to our battery in March 2013 to avoid lithium clusters and associated premature battery depletion. Since those improvements were implemented, we have had zero confirmed malfunctions related to lithium cluster formations. And for those devices implanted prior to 2013, we are confident that BSC's safety architecture—which includes an early onset battery alert—monitors for accelerated battery depletion and alerts physicians and patients, giving adequate time to schedule a replacement procedure. This alert is in addition to and different from the standard elective replacement indicator (ERI) used by the industry."

Will this medical device advisory impact St. Jude Medical's market share in the high-voltage device market? In response to a request for comment on market share and the ongoing acquisition by Abbott, a St. Jude Medical spokesperson told MD+DI, "We absolutely take this medical advisory very seriously. In terms of financial impact, we do not expect this medical advisory to have a material financial impact on St. Jude Medical. We continue to expect the transaction to close at the end of this year."

In an October 11 research note, Larry Biegelsen, Wells Fargo senior analyst, wrote that conversations with two top electrophysiologists potentially pointed to "a modest negative impact" as doctors might be frustrated by the advisory's impact on their practice and may be slower to implant the company's devices. The lack of a MRI-compatible device has already been hurting St. Jude Medical's share, he noted. "According to the physicians with whom we spoke, the battery depletion issue will not impact share as much as previous ICD recalls such [as] GDT’s [Guidant's] in 2004/2005 and MDT’s Fidelis in 2007," Biegelsen wrote.

According to St. Jude Medical's information page, patients should feel a vibratory alert from their implanted device near the end of the battery life. Doctors also are notified via a remote monitoring system or with an in-person check. Any patients who feel a vibratory alert should reach out to their physician right away.

Despite the seriousness of a premature battery depletion, the company recommends that any devices that aren't experiencing the problem remain implanted, as surgery carries its own risks.

"Our highest priority is the safety of patients depending on our life sustaining technology and we are working with regulators and physicians to communicate about this advisory and the resources we are providing to assist with patient management," St. Jude Medical said in its release.