Heart of the matter

  @FortuneMagazine October 31, 2013: 7:11 AM ET
WMA18 heart illo

St. Jude Medical
Headquarters: St. Paul
Employees: 16,000
The business: Developing medical technologies and services for cardiac, neurological, and chronic-pain patients. The company makes pacemakers as well as several other devices for vascular diseases.

Lifesaving devices for the heart are the economic blood pumping through the veins of St. Jude Medical. The St. Paul firm was founded in 1976 and rose to become one of the world's top sellers of heart valves. In 1994, St. Jude, under pressure to diversify, completed a $500 million deal with Siemens to purchase Pacesetter, then the world's second-largest producer of pacemakers. St. Jude's stock was trading at just under $6 at the time and has since jumped more than 950%, to $55, far outpacing the S&P 500 over that same period. The company is a leading manufacturer of implantable heart devices and has a market capitalization of $16.1 billion. The drive to lower health care costs and a sluggish economy have created headwinds across the medical-device sector. After a tough 2012 that included scrapes with FDA regulators over the quality of the wires that connect the heart to devices, St. Jude has returned to growth, thanks to a focus on products and some timely acquisitions.

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