Biotech suffered big losses in 2016, while pharma was taken to task for price-gouging. With these stories dominating the news, it may seem like medical device manufacturers had a quiet year. But in fact, 2016 saw them make major headlines. From cybersecurity to bioelectronics, medical device topics are garnering increased media coverage.
That’s because medical devices—formerly a last resort treatment—have the potential to revolutionize medicine. Collaborative care and mHealth movements are proving that medical device manufacturers aren’t just part of the future—they’re helping to drive it.
With that in mind, we’re counting down the top medical device news stories from 2016. After all, it’s hard to know where you’re going without first knowing where you’ve been.
St. Jude Medical takes on Muddy Waters
Can medical devices be hacked? That was a hot question this year—and according to short seller Muddy Waters, the answer is a resounding yes. They published a report in August 2016 alleging that St. Jude Medical’s (NYSE:STJ) cardiac devices are vulnerable to cyber attack.
“There is a strong possibility that close to half of STJ’s revenue is about to disappear for approximately two years,” the report claims, suggesting that St. Jude’s pacemakers, ICDs and CRTs should immediately be recalled. Those medical devices accounted for 46 percent of the company’s sales in 2015.
So began a vicious battle, with St. Jude refuting the allegations and blasting Muddy Waters for not following the usual channels for reporting security vulnerabilities. The medical device manufacturer filed a lawsuit in September 2016, claiming that Muddy Waters disseminated false information in order to lower the company’s stock price.
Indeed, St. Jude saw its stock fall four percent immediately following the report’s release.
But Muddy Waters is standing firm. The short seller reiterated its allegations in November 2016, releasing a series of videos that seem to show the reported cyber vulnerabilities.
“Patients, physicians and caregivers deserve better than the irresponsible release of information that is intended for financial gain and is unnecessarily frightening,” St. Jude said in response, condemning the “unverified videos” and continuing to deny the allegations.
Keep an eye on this story in 2017. The legal battle to come is sure to get heated, given the already acrimonious state of affairs.
Johnson & Johnson becomes the first medical device manufacturer to warn of hacking
Continuing the conversation around medical device hacking, Johnson & Johnson (NYSE:JNJ) warned customers of a potential vulnerability with its Animas OneTouch insulin pump in October 2016. The risk was minimal, Johnson & Johnson noted, but hackers could theoretically tamper with unencrypted communications between the wireless remote and pump in order to trigger an insulin overdose.
The story forms a stark parallel to the case of St. Jude Medical. The latter saw its stock drop majorly with mere allegations of security vulnerabilities. Johnson & Johnson, by contrast, admitted to security vulnerabilities—and yet their share price stayed fairly stable.
Of course, the vulnerability was only in one medical device, as opposed to a whole line of products. But the difference in investor response may also have something to do with how each issue came to light.
While Muddy Waters broadcast their allegations about St. Jude, catching the medical device manufacturer off guard, it was Johnson & Johnson who informed the public of the vulnerability with its own medical device.
After verifying the vulnerabilities, first discovered by Rapid7’s Jay Radcliffe, and consulting with the FDA, Johnson & Johnson sent a letter to patients explaining the security issue and how it could be resolved. In so doing, they became the first medical device manufacturer ever to warn customers about a hacking threat.
Read Full Article – Source: Top Medical Device News Stories of 2016 | Investing News Network
Author – Chelsea Pratt