St. Jude Medical Credit Suisse s 2009 Healthcare Conference. Eric S. Fain, M.D. President, Cardiac Rhythm Management Division November 12, 2009

Transcription

1 St. Jude Medical Credit Suisse s 2009 Healthcare Conference Eric S. Fain, M.D. President, Cardiac Rhythm Management Division November 12, 2009

2 Forward-Looking Statements The following presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include the expectations, plans and prospects for the Company, including potential clinical successes, anticipated regulatory approvals and future product launches, and projected revenues, margins, earnings and market shares. The statements made by the Company are based upon management s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include market conditions and other factors beyond the Company s control and the risk factors and other cautionary statements described in the Company s filings with the SEC, including those described in the Risk Factors and Cautionary Statements sections of the Company s Quarterly Reports on Form 10-Q for the fiscal quarters ended April 4, 2009, July 4, 2009 and October 3, The Company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance. 2

3 Overview of St. Jude Medical s Growth Program 3

4 Overview of STJ s Growth Program STJ was one of only three large-cap healthcare companies to grow both its top and bottom-line at >15% in On a constant currency basis, our top line grew 10% and EPS grew 15% in Q We continue to target a minimum 15% CAGR in EPS and double-digit sales growth. By improving our net profit margin to best competitive benchmarks Using our strong cash flow to repurchase stock and fund disciplined acquisitions as appropriate 4

5 Sustained Double-Digit Sales Growth Our portfolio of businesses is well positioned to deliver sustained double-digit sales growth. We have leadership positions in AF and neuromodulation, two of the best growth markets in med tech. NET SALES (in millions) $2,915 $2,294 $3,302 $3,779 $4,363 We have our strongest product portfolio ever in the $11 billion CRM market We have revitalized our cardiovascular growth program with multiple major new product lines scheduled for market release over the next 5 years.

6 Focus on Cardiac Rhythm Management Global market of $11 billion. We have gained approximately 13 points of worldwide market share in the last 5 years. We expect to continue to gain market share Share of de novo implants is higher than our reported market share Replacement market dynamics will be a tailwind to our market share growth We continued to strengthen our position on contracts in the U.S. in 2008 and early 2009 First inclusion in VA contract occurred in January 2009 Current RF ICD Durata Defibrillation Lead 6

7 7 Market Growth Through Expansion of Indications As in the past, favorable outcomes of significant clinical trials will help the ICD market grow. MADIT-CRT (near term): Low EF, Class I-II, wide QRS. Would approximately double the number of patients indicated for CRT-D (adds ~250K patients to CRT-D indicated pool) Could move the mix to CRT-Ds by 2-4 points over the next year Better patient outcomes vs. traditional devices provides another reason for physicians to increase the referrals of their ICD indicated patients DETERMINE (long term): Post-MI, EF>35%, >10% LV scar. Addresses the > 80% of SCA victims who have an EF > 35% Largest potential expansion of ICD Indications since SCD-HeFT (adds ~330K patients to the ICD indicated pool) Patients could also benefit from additional co-morbidity capabilities (e.g., ST segment monitoring)

8 ICD Market Dynamics - Replacements The global CRM market is expected to experience at least mid single digit growth. Replacements will continue to be the largest driver of growth. The installed base for replacement devices by the same manufacturer is dependent upon market share ~5 years earlier. SJM has steadily gained ICD market share since 2000, with our most meaningful share gains recorded from late Share gains have been stronger in the de novo than in the replacement segment. This creates a strong natural tailwind for growth in the fastest growing segment of the market. 8

9 Impact of New Technologies on ASPs Historically, new technological innovations have led to increases in ASPs. Our ASPs were stronger in Q than in either Q1 or Q Future innovations should continue this trend, especially if associated with clinically proven benefits in patient outcomes: Decreased hospitalization and/or mortality Improved Patient Quality of Life Decreased overall healthcare utilization Significant new technologies achieving these goals may include: Increased automaticity coupled with advanced remote monitoring Enhanced heart failure diagnostics that drive therapeutic decisions Monitoring of other co-morbidities (e.g., ST segment monitoring) Advancements in CRT therapy 9

10 CRM Industry Leading New Product Flow Averaged 20 new products each year the last 3 years. Developed disciplined product development process with best-in-industry productivity. 10

11 CRM Industry Leading New Product Flow CRM Product Pipeline 2H H 2010 ICDs Pacemakers CRT Leads Remote Care Current Plus SJ4 (U.S.) Accent RF Promote Plus SJ4 (U.S.) Durata SJ4 OptiSense Optim Merlin.net 4.0 Current Accel Anthem CRT-P Promote Accel QuickFlex µ 4.0 AnalyST Accel Promote Quadra (OUS) Quartet (OUS) cellular 11

12 AnalyST ICD - ST Monitoring First and only ICD that continuously monitors ST segment changes. Provides important new insight into patients clinical events (e.g., HF events, VT/VF episodes). Began a controlled launch outside the United States in

13 Durata SJ-4 Connector New in-line SJ-4 (IS-4*) connector Only 7F ICD lead available Optim Insulation Available on Accel and Plus family Reduced header size/ pocket bulk Simplified, faster connection Registries and Follow-up: Patients enrolling in FDA Post-Approval Monitoring Study and SJM lead registries All patients have wireless remote monitoring available through Merlin.net 13 * Pending standards approval

14 Accent and Anthem Wireless RF Pacemakers and CRT-P True Instant follow-up AutoCapture/ CapConfirm Automatic Sensing Control from ICD platform Audible Patient Notifier for alerts AT/AF Alerts > 9 yrs longevity with stored EGMs On Now launched worldwide 14

15 CRT-P Market Dynamics 2010 US CRT-P Market is estimated to be ~$125MM* Market Growth Drivers - CRT focused trials (MADIT CRT, BIOPACE) - Improved CRT efficacy - Procedural efficiencies - Enhanced co-morbidity diagnostics Anthem Differentiating Features - RF Wireless telemetry - Daily remote monitoring - Smaller and thinner than competition - Better longevity than competition - Audible patient alert - Atrial arrhythmia (AT/AF) alert - BiV Cap Confirm (International) - QuickOpt Timing Optimization - 7x more IEGM storage than competition 15 * Source: Millennium Research Group

16 QuickFlex µ LV Lead/ CPS Aim SL Key Features: 4F Lead Body Smallest bipolar CRT lead available Optim Insulation Come with new delivery tools for direct venous branch sub-selection Timing: Launch (International): Available Launch (U.S.): 1H

17 Promote Quadra CRT-D System Complete CRT-D system with Quartet quadrapolar LV lead IS-4* Connector for LV Multisite LV pacing capability Select Site Pacing Timing: Limited Launch (International): Ongoing IDE study (U.S.): Ongoing Multi-Site LV Pacing Timing: Launch (International): 1H 2010 IDE study (U.S.): 1H 2010 * Pending standards approval 17

18 CRM Industry Leading New Product Flow CRM Product Pipeline 2H H 2010 ICDs Pacemakers CRT Leads Remote Care Current Plus SJ4 (U.S.) Accent RF Promote Plus SJ4 (U.S.) Durata SJ4 OptiSense Optim Merlin.net 4.0 Current Accel Anthem CRT-P Promote Accel QuickFlex µ 4.0 AnalyST Accel Promote Quadra (OUS) Quartet (OUS) cellular 18

19 Quality is Top Priority at SJM - CRMD A quality policy which guides: Design Manufacturing Post-Market Surveillance Independent structure reporting to the president. QA leadership with strong design and manufacturing backgrounds. Personnel in dedicated quality roles individuals (200+ engineers and scientists) Significant investment in quality. 19

20 Designed for Reliability - Leads SPL Riata Riata ST Optim Durata Coil Conductor 11F Cable Conductor 8F Optim Material 7F Soft Tip Flexible Coil Improved Fracture Resistance Abrasion Resistance Ease of Implant Survival: Survival: Survival: Survival: 11+ yrs Fracture Rate: 7+ yrs Fracture Rate: 2 ½ yrs. Insulation Abrasion Rate: 1 ½ yrs. Perforation Rate: 0.15% 0.02% 0.03% 0.12% 20

21 Atrial Fibrillation Division After heart failure, atrial fibrillation represents the largest unmet clinical need in cardiovascular medicine today. AF therapy represents a key area of interest and opportunity for electrophysiologists and cardiac surgeons. Same call point as in the CRM market Market for Atrial Fibrillation procedures is approximately 2% penetrated by ablation based therapy. St. Jude Medical is the best positioned company to address the requirements for the development of safe, effective, and reproducible AF therapy. 21

22 Most Complete AFD Product Portfolio in the Industry Access and Guidance Diagnostics and Visualization Mapping Advanced Ablation Complementary Technologies Agilis NxT Steerable Introducer Reflexion Spiral EP Catheters EnSite Velocity System Therapy Cool Path Family of Irrigated Ablation Catheters SJM Confirm Implantable Cardiac Monitor Outstanding agility and stability Small turning radius for challenging anatomies One-step, MultiPoint Mapping for rapid diagnosis The right catheter for each patient and procedure Continuous cardiac monitoring to streamline diagnosis EP-WorkMate Recording System Complete EP workstation integration 22

23 Key Takeaways SJM has completed its transition to focus on innovation leadership. We are actively leveraging our leadership position in AF with our CRM franchise. We continue to make significant investments in CRM technology development and clinical trials and have a full pipeline of products for 2010 and beyond. Our commitment to quality, reliability and continuous improvement shows in our product performance across all market segments. Our strong product flow and focus on significant clinical trials to demonstrate improved patient outcomes positions us to continue to take CRM market share in the future. 23

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