Medical-device manufacturer St. Jude Medical has announced it will form an advisory board to address cybersecurity concerns following claims from short-sellers that its pacemakers and other devices are vulnerable to hacks.
St. Jude's Cyber Security Medical Advisory Board will include physicians to offer perspectives from the patient-management and clinical side.
The advisory board members will work alongside St. Jude's technology experts and external researchers “to help us maintain and enhance cybersecurity and patient safety,” said Dr. Mark Carlson, chief medical officer at St. Jude, in a prepared statement.
The St. Paul, Minn.-based company currently gathers expertise from researchers and government agencies to assess potential security threats in devices, according to a news release.
Dr. Leslie Saxon, professor of medicine at the Keck School of Medicine at the University of Southern California and executive director of the USC Center for Body Computing, will be one of the advisers on the board. “It's essential that medical device companies have a clinical perspective when assessing the security of their products,” Saxon said.
Other members on the board are still being selected.
The implementation of the cybersecurity board comes nearly two months after short-selling investment firm Muddy Waters and cybersecurity company MedSec Holdings published a report that St. Jude's cardiac devices "lack even the most basic forms of security.”
St. Jude consistently denied the claims. CEO Michael Rousseau called the allegations “irresponsible, misleading and unnecessarily frightening patients.”
The company filed a lawsuit last month in response to the short-sellers in order to “set the record straight” that its devices are safe.
The Food and Drug Administration also launched a probe to assess the validity of the report from Muddy Waters and MedSec.
St. Jude Medical said Muddy Waters “intentionally” released false claims against its cardiac devices in order to benefit if St. Jude stock depreciated. After the report was released, the company's stock fell 5% from $81.88 a share to $77.82.
Prices have mostly bounced back since then. St. Jude stock was selling for $79.40 a share on Tuesday afternoon.
But the devicemaker last week reported two deaths that were linked to a battery defect in some of its implantable heart devices.
Before the end of the year, St. Jude will be acquired by Abbott Laboratories for $25 billion. Abbott has said the allegations against the company haven't affected the deal.
St. Jude has a market value of $22.6 billion. In its second quarter, St. Jude reported $1.5 billion in net sales, a 10.8% increase from the same quarter a year ago.