Devicemaker St. Jude Medical reported solid second-quarter results Wednesday, but the numbers also underscore the company's need to shore up its U.S. position with acquisitions.
The St. Paul, Minn.-based maker of implantable medical devices reported income of $270 million, compared with $115 million in the same period in 2013, when the company booked a $160 million hit for retiring debt and other restructuring costs.
The company's sales rose 3% to $1.45 billion in the second quarter. The growth, however, is due to a 6% increase in total international sales to $779 million. Sales in the U.S. were flat at $669 million.
Pacemaker sales in the U.S. were down 3% to $275 million. Neuromodulation devices were down 11% to $71 million. Atrial fibrillation device sales in the U.S. market went up 7% to $98 million. Sales of implantable cardioverter defibrillators rose 2% to $275 million.
St. Jude Medical has been on an acquisition streak, announcing this week that it would spend $200 million in cash to buy NeuroTherm, a manufacturer of radiofrequency ablation devices. NeuroTherm's products are expected to complement St. Jude Medical's existing neuromodulation business.
During the second quarter, St. Jude closed its purchase of CardioMems, which markets a wireless implantable monitoring sensor for heart-failure patients.
Like many other medical device manufacturers, St. Jude Medical is making deals that it believes will help it retain market share and boost sales among a rapidly consolidating hospital industry in the U.S. As hospital systems get bigger, they gain more purchasing power and have pushed back on the prices of high-cost implantable devices.
Deals such as CardioMems are also expected to help position St. Jude Medical as a partner to hospitals.
“The point is to be big enough to really deserve a seat at the table in customer discussions at the most senior level,” Daniel Starks, St. Jude Medical's chairman, president and CEO, said during a call with investors. “It's a question of how much can we impact their program.”
Follow Jaimy Lee on Twitter: @MHjlee
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