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St. Jude Medical Settles FDA Warnings Letter for Texas Plant

St. Jude Medical Inc. (STJ) revealed that U.S. Food and Drug Administration (:FDA) notified that the company has addressed issues cited in the warning letter for its Plano facility in Texas. The warning letter is dated back to Jun 26, 2009, following inspections by the FDA at the facility between Mar 5 and Apr 6, 2009.

On Apr 6, 2009, the FDA issued a Form 483 to St. Jude Medical. The form identified certain observed non-conformities with Current Good Manufacturing Practice. Following the incident, the company’s Neuromodulation division provided written responses to the FDA elaborating certain corrective actions.

St. Jude Medical acquired the Plano facility in 2005 for $1.3 billion. Prior to the acquisition, the facility was operated by Advanced Neuromodulation Systems, which was the second-largest supplier of devices that use electrotherapy to treat chronic pain and nerve disorders.

Recently, St. Jude Medical completed acquiring privately held chronic pain solutions maker NeuroTherm for cash payment of roughly $200 million. The acquisition boosted St. Jude Medical’s chronic pain portfolio and made it the only medical device producer with a chronic pain portfolio that offers both radiofrequency ablation (:RFA) for spinal pain and spinal cord stimulation.

St. Jude Medical had previously revealed that the acquisition of NeuroTherm is expected to contribute $10 to $15 million to its sales in 2014. The acquisition is expected to be neutral to St. Jude Medical’s earnings per share in 2014 but accretive thereafter.

In May, St. Jude Medical also completed its acquisition of privately-held CardioMEMS, Inc. following the FDA clearance of the CardioMEMS HF System. With the closure of the CardioMEMS acquisition, St. Jude Medical expects accelerated growth in its cardiovascular segment.

Currently, St. Jude Medical carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry include ICU Medical, Inc. (ICUI), Abaxis, Inc. (ABAX), and Symmetry Medical, Inc. (SMA). ICU Medical sports a Zacks Rank #1 (Strong Buy), while both Abaxis and Symmetry Medical carry a Zacks Rank #2 (Buy).

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