Replies to post #203812 on Biotech Values

[wow_happens28]

It's rather hard to know who to believe anymore, especially funds that are short the stock they are writing about or touting?

[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.

[DewDiligence]

STJ (-6%/PM) has a battery problem after all—but not the defect related to hacking that shortseller, Muddy Waters recently claimed:

http://www.bloomberg.com/news/articles/2016-10-11/st-jude-warns-defibrillator-patients-about-battery-risks

St. Jude Medical Inc. is warning patients that the batteries on thousands of its implantable defibrillators can quickly and unexpectedly deplete, in rare cases, leaving them vulnerable should they need a shock from the device to restart their faltering hearts.

… The warning comes at a sensitive time for the St. Paul, Minnesota-based medical device manufacturer, which is in the midst of being purchased by Abbott Laboratories for $25 billion. In August, short-seller Carson Block and his investment firm Muddy Waters Capital LLC issued a report saying St. Jude’s heart devices are uniquely vulnerable to cybersecurity attacks, including a depletion of the battery. The issue at hand had nothing to do with wireless communications, which are essential for doctors to closely monitor their patients… The problem stems from the lithium-powered batteries that run the devices.