The company’s gotten into legal hot water over its defibrillator leads recently. Many have raised concerns over the company’s Durata leads after the FDA warned St. Jude Medical, Inc. (NYSE:STJ) about its concerns over the devices, suspecting that it could recall them if problems persist. St. Jude promoted the Durata as the replacement to the recalled Riata leads, making this an unsettling trend at the company.
For its part, St. Jude has done its best to develop promising products for the future that don’t rely on the flat-lining CRM market. The company recently launched a safety and efficacy trial for its Amplatzer heart plug, a device that won CE Mark approval in 2008 that’s designed to capitalize on the lucrative atrial fibrillation market. A U.S. approval for the Amplatzer would greatly help St. Jude’s fortunes.
Investors need to keep a sharp eye on St. Jude’s EnligHTNment trial, however. The study uses the company’s EnligHTN renal denervation system — already a strong product for St. Jude Medical, Inc. (NYSE:STJ) in a hot market — as it attempts to determine if renal denervation products can help against other hypertension-related ailments, such as heart attack and stroke. If it’s successful, it’ll be a major victory for St. Jude and the renal denervation field as a whole.
St. Jude also boasts a growing neuromodulation business of its own along with its recently released Ilumien Optis stent imaging technology, but until this company manages to reduce its dependence on CRM and cardiovascular sales, it’ll struggle to push back against a stagnant market.
A tale of two tough stocks
Both companies are struggling with the CRM market and other heart-related issues, but which one’s future looks the brightest?
St. Jude offers a dividend where Boston Scientific Corporation (NYSE:BSX) doesn’t, so score one for income investors. While the company’s made good moves toward diversifying with its renal denervation and atrial fibrillation products among others, I’m still skeptical as to St. Jude Medical, Inc. (NYSE:STJ)’s plan for growing and overcoming the CRM market’s decline that has taken a toll on its sales. That’s all hoping the company’s mess with its defibrillator leads doesn’t grow worse — a sticky situation if there ever was one.
Boston Scientific Corporation (NYSE:BSX)’s in a tough spot with CRM and interventional cardiology sales as well, but if the company can continue growing its presence in the hot stent market, it’ll have a foundation of growth to rely upon for the future. It’s not enough to turn around Boston Scientific completely, but it is a step forward for a company in need of optimism.
I wouldn’t recommend either stock to all but the most optimistic investors – there are just too many hurdles for each company to beat back before investors can feel confident in their safe and solid long-term futures. Between the two, Boston Scientific’s path to respectability looks shorter, but if you take a gamble on either stock, use caution and keep an eye out for bumps in the road.
The article Boston Scientific vs. St. Jude: Is Either Stock Worth a Buy? originally appeared on Fool.com and is written by Dan Carroll.
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool owns shares of Medtronic.
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