Want to know what's happening next in healthcare?

MedCityNews is the leading online news source for the business of innovation in healthcare.


“I read MedCity because it captures the pulse of what's going on in healthcare innovation, a go to source. I also like how MedCity supports women in digital health.”

Dr. Charlene Ngamwajasat, @doctorcharlene, Physician and techie


Sign up for our daily newsletter


St. Jude Medical’s $1B share buyback is move to shore stock battered over Durata worries

12:04 pm by | 0 Comments

declineSt. Jude Medical (NYSE:STJ) announced Thursday that its board has authorized a $1 billion share repurchase program.

The move shows that the board believes that the company’s stock is undervalued, but is likely to sway few who have lately punished the stock over concerns about St. Jude’s Durata ICD lead.

Between Oct. 1 and Nov. 29, the stock has fallen 20.2 percent to $33.69.

“This decision is clearly intended to communicate management’s confidence in light of the recent stock decline, but this statement alone may not be sufficient to ease accelerating concerns on Durata,” said David Lewis, a Morgan Stanley analyst in a research note Friday.

Advertisement

Durata of course has been in the spotlight ever since a previous generation ICD lead was pulled from the market. Analysts have differed over how much risk the Durata poses for the Minnesota medical device maker. But the differing opinions were largely overshadowed when the U.S. Food and Drug Administration issued a less-redacted inspection report than the one St. Jude disclosed that raised serious concerns over how St. Jude does design validation for the Durata.

That caused a deep sell-off.

Now the question is whether Durata will be pulled from the market. Citi analyst Matthew Dodds believes there is a high chance of that happening by mid-2013.

 

[Photo Credit: Unhappy Trader from Big Stock Photo]

 

 

 

Copyright 2014 MedCity News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Arundhati Parmar

By Arundhati Parmar

Arundhati Parmar is the Medical Devices Reporter at MedCity News. She has covered medical technology since 2008 and specialized in business journalism since 2001. Parmar has three degrees from three continents - a Bachelor of Arts in English from Jadavpur University, Kolkata, India; a Masters in English Literature from the University of Sydney, Australia and a Masters in Journalism from Northwestern University in Chicago. She has sworn never to enter a classroom again.
More posts by Author

0 comments