Shortly after a research firm posted videos Oct. 19 that allegedly showed cybersecurity vulnerabilities with St. Jude Medical’s cardiac devices, the company issued a statement criticizing the release of the videos.
Muddy Waters posted the videos on a website the company created called “Profits Over Patients.” The firm first gained attention in late August when founder Carson Block and MedSec Holdings. raised concerns about St. Jude Medical’s pacemakers and defibrillators.
Muddy Waters and MedSec Holdings have short positions in St. Jude Medical’s common stock, so they profit from the shares losing value. St. Jude Medical’s stock fell less than 1 percent on Oct. 19 to $78.70 per share.
In September, St. Jude Medical filed a lawsuit against Muddy Waters, MedSec Holdings and three of the companies’ employees for making false statements about St. Jude’s implantable cardiac devices.
St. Jude warned in early October of premature battery depletion associated with lithium deposits in a small number of its implantable cardioverter defibrillators (ICDs) and cardiac resynchronization therapy ICDs. Still, the company continued to distance itself from allegations that Muddy Waters and MedSec Holdings made on Oct. 19.
“Muddy Waters and MedSec have once again made public unverified videos that purport to raise safety issues about the cybersecurity of St. Jude Medical devices,” St. Jude said in a news release. “This behavior continues to circumvent all forms of responsible disclosure related to cybersecurity and patient safety and continues to demonstrate total disregard for patients, physicians and the regulatory agencies who govern this industry. We take this matter very seriously and will once again work to quickly evaluate this new information.”
The new allegations from Muddy Waters and MedSec Holdings came on the same day that St. Jude released its earnings report for the third quarter. During the quarter, net sales increased 12 percent to $1.499 billion and diluted earnings per share decreased 3 percent to $0.73 compared with the third quarter of 2015.
In April, Abbott agreed to acquire St. Jude Medical for approximately $25 billion. The companies expect the deal to close by the end of the year.
Besides fighting the allegations that Muddy Waters and MedSec Holdings made, St. Jude also said on Oct. 17 that it was forming a security medical advisory board to improve its cyber security standards.
“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 the release. “We have worked, and will continue to work, together with responsible researchers to understand and assess any claims and identify any potential vulnerabilities in our devices.”
Executive Editor
Tim Casey joined TriMed Media Group in 2015 as Executive Editor. For the previous four years, he worked as an editor and writer for HMP Communications, primarily focused on covering managed care issues and reporting from medical and health care conferences. He was also a staff reporter at the Sacramento Bee for more than four years covering professional, college and high school sports. He earned his undergraduate degree in psychology from the University of Notre Dame and his MBA degree from Georgetown University.