CHICAGO, Aug. 22, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includeSt. Jude Medical, Inc. (NYSE:STJ), Medtronic (NYSE:MDT), Boston Scientific (NYSE:BSX), Chevron Corporation (NYSE:CVX) and Royal Dutch Shell plc (NYSE:RDS.A).
Recently, the U.S. Food and Drug Administration (FDA) agency instructed medical devices major, St. Jude Medical, Inc. (NYSE:STJ) to conduct a study to examine insulation failure in Riata defibrillator leads, a thin wire used to connect cardiac resynchronization therapy defibrillator (CRT-D) or implantable cardioverter defibrillator (ICD) to the heart to monitor abnormal heart rhythm.
The agency has recommended that X-rays or other imaging alternatives should be conducted in patients who have been implanted with the heart device to increase clinical know-how. The FDA also recommended St. Jude to carry out post-market surveillance studies to accumulate information regarding the risks associated with the Riata leads for 3 years.
The FDA had issued, in late 2011, an urgent recall of the Riata and Riata ST leads given the potential risk of serious injury or patient death. St. Jude had stopped selling the product in 2010. As of 2011, about 79,000 U.S. citizens had been implanted with these leads.
Although the FDA believes that most of the leads are harmless, despite signs of electrical conductor migration or externalization, it is still necessary to collect data on the frequency and timing of insulation failure to advance medical treatment and enhance patient safety.
The FDA's scrutiny is supported by a number of studies which have indicated that a regular checkup may identify more problems that remained undetected earlier. However, the FDA has also cautioned health care professionals not to remove the leads randomly, without properly evaluating the condition of the patient.
Earlier, St. Jude had announced early phase-one results from its Riata Lead Evaluation Study. It was found that externalized conductors occurred less frequently in Riata ST 7F with a small diameter in comparison to the thicker Riata 8F leads. Management asserted that the results were consistent with other published studies. The company's Leads Medical Advisory Board did not make any changes to existing patient management recommendations.
Apart from the post-market studies for Riata and Riata ST ICD and CRT-D leads, the FDA has asked St. Jude to conduct post-market surveillance studies on its QuickFlex LV CRT leads, QuickSite LV CRT leads and Riata ST Optim and Durata ICD leads. In April 2012, St. Jude had voluntarily recalled its QuickFlex LV CRT leads and the QuickSite LV CRT leads due to insulation abrasion.
If such a trend continues and similar product recalls follow in the future, it will negatively impact the company's goodwill and might act as leverage for its peers such as Medtronic (NYSE:MDT) and Boston Scientific (NYSE:BSX) to gain market share. Moreover, we remain cautious about the restructuring expenses within the CRM business as well as the overall weakness in the CRM market. We currently have a Neutral recommendation on St. Jude, along with a short-term Zacks #4 Rank (Sell).
Shell-Chevron Switch Project Stake
Energy conglomerates Chevron Corporation (NYSE:CVX) and Royal Dutch Shell plc (NYSE:RDS.A) have agreed to swap their stakes in certain projects in Australia.
Per the binding agreement signed between the two companies, Chevron will transfer its 16.7% interest in the East Browse Basin and 20% holdings in the West Browse Basin, off the Kimberley coast, to Shell. In return, the latter will hand over its 33.3% stake in the WA-205-P and WA-42-R blocks in Clio and Acme fields to Chevron along with a cash payment of $450 million.
With the completion of the transaction – that is awaiting governmental approval and customary registration – Shell will control 35% interest in the West Browse titles and 25% interest in the East Browse titles. Following the increase in stake in the Browse liquefied natural gas (LNG) project, Shell will move a step ahead with the development strategy of floating LNG.
Meanwhile, Chevron will also gain 100% ownership of the WA-205-P and WA-42-R concessions in the Carnarvon Basin, thereby expanding its Wheatstone area resource base in Western Australia.
Located about 7.5 miles west of Onslow, off Western Australia's Pilbara coast, Wheatstone is one of the country's most ambitious resource projects. The venture is proposed to be built with an annual output capacity of 25 million metric tons of LNG. The project is expected to come online by 2016.
Headquartered in California, San Ramon, Chevron is one of the leading energy companies in the world with an impressive business model. Its current oil and gas development project pipeline is among the best in the industry, boasting large, multiyear projects.
Based in Netherlands, Shell owns a strong and diversified portfolio of global energy businesses that offer attractive long-term growth opportunities. The group's strong inventory of development projects and increased capital expenditures should help volume growth in the long run.
Both Chevron and Shell currently hold a Zacks #3 Rank, implying a short-term Hold rating for a period of one to three months. We also maintain our long-term Neutral recommendation on the stocks.
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