Biotech Values

[DewDiligence]

(ABT)—STJ rebuts Muddy Waters hit piece; the rebuttal of the battery-draining scenario is amusing:

http://finance.yahoo.com/news/st-jude-medical-refutes-muddy-193500684.html

The report claimed that the battery could be depleted at a 50-foot range. This is not possible since once the device is implanted into a patient, wireless communication has an approximate 7-foot range. This brings into question the entire testing methodology that has been used as the basis for the Muddy Waters Capital and MedSec report.

In addition, in the described scenario it would require hundreds of hours of continuous and sustained “pings” within this distance. To put it plainly, a patient would need to remain immobile for days on end and the hacker would need to be within seven feet of the patient. In the unlikely instance that was to occur, the implanted devices are designed to provide a vibratory patient alert if the battery dips below a certain threshold to protect and notify patients.

It’s curious that the Muddy Waters report initially caused a 5% sell-off in STJ shares, especially when you consider that STJ has agreed to be acquired by ABT for an amount that does not depend on STJ’s own share price.