St. Jude Medical Announces Acquisition and CE Mark Approval of World's First Leadless Pacemaker

Nanostim leadless pacemaker represents one of the most important
advances in the history of pacing technology

ST. PAUL, Minn.--(BUSINESS WIRE)--
St. Jude Medical, Inc. (NYSE:STJ), a global medical device company,
today announced the completion of its acquisition of Nanostim, Inc., a
privately-owned developer of miniaturized, leadless pacemakers. The
acquisition adds the world’s first and only leadless
pacemaker to the St. Jude Medical product portfolio and culminates a
two-year partnership between the two companies during which St. Jude
Medical invested in and collaborated with Nanostim throughout its
product development and commercialization initiatives.

Unlike conventional pacemakers that require a more invasive surgery, the Nanostim™
leadless pacemaker is designed to be implanted directly into the
heart via a minimally invasive procedure. The device is delivered using
a steerable catheter through the femoral vein, eliminating the need to
surgically create a pocket for the pacemaker and insulated wires (called
leads) that have historically been recognized as the most vulnerable
component of pacing systems. The Nanostim leadless pacemaker recently
received CE Mark approval and will be available soon in select European
markets. It also recently received U.S. Food and Drug Administration
(FDA) conditional approval for its Investigational Device Exemption
(IDE) application and pivotal clinical trial protocol to begin
evaluating Nanostim leadless technology in the U.S.

“The Nanostim leadless pacemaker represents one of the most important
advances in the history of pacing technology, and builds on St. Jude
Medical’s strong history of pacing innovation – beginning with the first
implantable pacemaker in 1958 through the introduction of quadripolar
cardiac resynchronization therapy pacing,” said Eric S. Fain , M.D.,
president of the St. Jude Medical Implantable Electronic Systems
Division. “We look forward to welcoming Nanostim employees to St. Jude
Medical and to continuing our legacy of transforming the treatment of
cardiac rhythm disorders with pioneering technology.”

The Nanostim leadless pacemaker is less than 10 percent the size of a
conventional pacemaker. The small size of the device and lack of a
surgical pocket, coupled with the exclusion of a lead, improves patient
comfort and can reduce complications, including device pocket-related
infection and lead failure. The elimination of the visible lump and scar
at a conventional pacemaker’s implant site, in addition to the removal
of patient activity restrictions that may prevent the dislodgement or
damage to a conventional lead, will potentially improve the quality of
life for patients with this technology by allowing most to continue
living active, uninhibited lifestyles. The device is supported by the
St. Jude Medical Merlin™ Programmer that is also used to interrogate and
program the company’s other pacemakers and implantable cardioverter
defibrillators (ICDs).

“For the past 40 years the therapeutic promise of leadless pacing has
been discussed, but until now, no one has been able to overcome the
technical challenges,” said Dr. Johannes Sperzel of the Kerckhoff Klinik
in Bad Nauheim, Germany. “This revolutionary technology offers my
patients a safe, minimally-invasive option for pacemaker delivery that
eliminates leads and surgical pockets. This is the future of cardiac
pacing.”

The Nanostim leadless pacemaker was designed to be fully retrievable so
that the device can be readily repositioned during the implant procedure
and later retrieved if necessary, such as at the time of normal battery
replacement. Initial results from the LEADLESS study, a prospective,
single-arm, multicenter study evaluating patients with the Nanostim
leadless pacemaker, were presented earlier this year and demonstrated
overall device performance comparable to conventional pacemakers. Total
implant procedure times averaged 28 minutes. Even with miniaturization,
the device battery is expected to have an average lifespan of more than
9 years at 100 percent pacing, or more than 13 years at 50 percent
pacing.

Cardiac pacemakers are used to treat bradycardia, which is a heart rate
that is too slow. These devices monitor the heart and provide electrical
stimulation when the heart beats too slowly for each patient's specific
physiological requirements. More than four million people worldwide have
an implanted pacemaker or other cardiac rhythm management device, and an
additional 700,000 patients receive the devices each year.

On May
3, 2011, St. Jude Medical and Nanostim entered into a series of
agreements pursuant to which St. Jude Medical made an investment in, and
obtained an exclusive option to acquire, Nanostim. This transaction
results from St. Jude Medical’s exercise of its exclusive option under
those agreements. Under the terms of a merger agreement entered into
between the parties, St. Jude Medical paid $123.5 million to Nanostim
shareholders at the closing of the transaction. The merger agreement
also provides for additional cash payments of up to $65 million, which
are contingent upon both the achievement and timing of certain
revenue-based milestones. Except for acquisition-related expenses, this
transaction does not impact St. Jude Medical’s outlook for 2013
consolidated earnings per share.

Commenting on the acquisition, Nanostim Chief Executive Officer Drew
Hoffman said, “Nanostim’s focus on bringing innovative technologies to
the market closely aligns with St. Jude Medical’s commitment to
developing leading products and treatment options for patients and
physicians worldwide. We are pleased to have recently received CE Mark
approval for the Nanostim leadless pacemaker. Nanostim looks forward to
now working as part of St. Jude Medical to further advance our
commercialization initiatives and expand this technology into new and
existing markets.”

In connection with this transaction, BofA Merrill Lynch is acting as
financial advisor and Gibson, Dunn & Crutcher LLP as legal advisors to
St. Jude Medical. Wilson Sonsini Goodrich & Rosati is acting as legal
counsel to Nanostim.

Nanostim, an early-stage medical device start-up company based in
Milpitas, Calif., is also backed by InterWest Partners, US Venture
Partners, Emergent Medical Partners and Life Science Angels.

St. Jude Medical is a global medical device manufacturer dedicated to
transforming the treatment of some of the world’s most expensive,
epidemic diseases. The company does this by developing cost-effective
medical technologies that save and improve lives of patients around the
world. Headquartered in St. Paul Minn., St. Jude Medical has four major
clinical focus areas that include cardiac rhythm management, atrial
fibrillation, cardiovascular and neuromodulation. For more information,
please visit sjm.com or follow us on Twitter @SJM_Media.

This news release 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 Annual Report on Form
10-K for the fiscal year ended December 29, 2012 and Quarterly Report on
Form 10-Q for the fiscal quarter ended June 29, 2013. The Company does
not intend to update these statements and undertakes no duty to any
person to provide any such update under any circumstance.

J.C. Weigelt, 651-756-4347Investor
Relationsjweigelt@sjm.comorKate
Stoltenberg, 651-756-3388Media Relationskstoltenberg@sjm.com

Source: St. Jude Medical, Inc.