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St. Jude Medical Irvine Site: Catheters, Not Heart Valves

Orange County is a hub for heart valves with Irvine-based Edwards Lifesciences Corp. and operations of Minnesota’s Medtronic Inc.

The industry’s third big player, St. Jude Medical Inc., also has operations here. But not for heart valves.

In Irvine, Minnesota-based St. Jude makes catheters for diagnosing and treating atrial fibrillation, a common type of irregular heartbeat. The company has more than 300 workers locally.

The business is a fast-growing part of St. Jude, which also makes heart valves, defibrillators and devices to stimulate the brain and spinal cord.

Atrial fibrillation is one of the most common heart disorders. It occurs when electrical patterns that trigger the heart’s muscles beat abnormally. The condition can lead to strokes and other complications if left untreated.

“When you have an irregular heartbeat, it affects your energy level,” said Dick Nye, an Irvine-based vice president of operations for St. Jude’s atrial fibrillation division. “You’re not able to do the things that you used to do.”

Atrial fibrillation is a sizable market. Some 2.7 million Americans are living with the condition, according to the Centers for Disease Control and Prevention. It accounted for $6.7 billion in healthcare costs in 2005, the last year for which figures are available.

Drugs are a traditional way to treat the problem but are losing ground to devices.

Growing Business

Nye: “When you have an irregular heartbeat, it affects your energy level”

Devices to treat atrial fibrillation have boosted St. Jude, which has annual sales of $5 billion and a recent market value of about $12 billion.

In the second quarter, atrial fibrillation made up $176 million of St. Jude’s $1.3 billion in sales. Atrial fibrillation sales were up 13% from a year earlier, slightly outpacing St. Jude’s overall 11% revenue growth.

St. Jude projects full-year sales from the division coming in at $680 million to $710 million, or 13% of its anticipated sales of $5 billion.

Sales of atrial fibrillation catheters and related devices have grown from 11% of St. Jude’s revenue in 2007.

St. Jude competes in atrial fibrillation with New Jersey’s Johnson & Johnson, whose Biosense Webster unit is based just over the county line in Diamond Bar. Other rivals include Medtronic, which has about 675 heart valve workers in Santa Ana and Irvine, and Natick, Mass.-based Boston Scientific Corp.

“Device-based treatments for atrial fibrillation are gaining popularity because unlike the drug therapies, device-based therapies offer a cure as opposed to a chronic treatment,” said Bruce Jackson, a medical device analyst with New York investment bank Morgan Joseph LLC.

St. Jude and competitors “are all growing collectively at a fast rate,” said Jackson, who considers Biosense Webster, St. Jude and Medtronic as market leaders.

Boston Scientific is “not on the cutting edge of device-based treatments, but they’re working on it,” Jackson said.

Boston Scientific and St. Jude have had a fierce rivalry. The two have clashed over sales and salespeople in the past.

St. Jude, which got its start in 1976 making heart valves, is No. 2 in valves behind Edwards Lifesciences.

The company’s Irvine operation is split between two buildings near the San Diego (I-405) Freeway. Besides manufacturing, operations include supply chain, quality, research and development, regulatory and clinical affairs, according to Nye.

The device maker also has a small research and development operation called the Center for Innovation and Strategic Collaboration in the Irvine Spectrum.

“They do advanced R&D for all of St. Jude Medical,” said Nye, who has been with St. Jude for nearly four years and whose previous jobs include a stint at IntraLase Corp., an Irvine-based maker of lasers used in eye surgery that now is part of Santa Ana-based Abbott Medical Optics Inc.

Catheters made by St. Jude in Irvine are used by doctors who can perform procedures on an outpatient basis, or on patients under sedation, rather than full anesthesia. On average, Nye said the procedures take three to four hours.

Other products made in Irvine are designed to work with the catheters.

In Irvine, St. Jude also makes a mapping device that Nye said creates a 3-D model of the heart that doctors can use, along with a device that digitally records a heart signal.

Acquisition

St. Jude made a major push in OC in 2004 when it bought Irvine Biomedical Inc., a privately held electrophysiology catheter developer that got its start a decade earlier.

The company’s atrial fibrillation division was created around the time that St. Jude bought Irvine Biomedical.

Irvine Biomedical’s chief executive, Peter Chen, now heads the Center for Innovation and Strategic Collaboration.

Some products made in Irvine still bear the Irvine Biomedical mark.

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