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St. Jude Medical Reports 2008 Results

St. Jude Medical, Inc. (St. Jude Medical) has reported net sales of $4.363 billion for the full year 2008, up 15%, compared with the net sales of $3.779 billion in the previous year-end. It also reported net earnings of $384 million, or $1.10 per diluted share, for the full year 2008, compared with net earnings of $559 million, or $1.59 per diluted share, in the previous year-end.

Fourth Quarter Sales

The company reported net sales of $1.133 billion in the fourth quarter of 2008, an increase of 11 percent compared to the $1.018 billion in the fourth quarter of 2007. Foreign currency translation comparisons decreased fourth quarter sales by approximately $29 million.

Commenting on the fourth quarter and full-year results and the Company’s growth program, St. Jude Medical chairman, president and chief executive officer Daniel J. Starks said, “We are pleased to have achieved strong growth across all of our product platforms in 2008, including a 14 percent revenue increase in Cardiac Rhythm Management. The solid outperformance in our Atrial Fibrillation and Neuromodulation businesses in the fourth quarter in particular underscore the long-term growth opportunities and acceleration of these programs. St. Jude Medical’s growth, together with actions we have taken to advance our product platforms through acquisitions, gives us confidence in our ability to achieve continued success.”

Cardiac Rhythm Management (CRM)

Total Cardiac Rhythm Management sales, which include implantable cardioverter defibrillator (ICD) and pacemaker products, were $680 million for the fourth quarter of 2008, a 7% increase compared to the fourth quarter of 2007. Total CRM product sales for the full-year 2008 were $2.701 billion, representing a 14 percent increase over 2007.

Of that total, ICD product sales were $387 million in the fourth quarter, an 8 percent increase compared to the fourth quarter of 2007. The fourth quarter of 2007 contained a one-time revenue benefit to ICD sales due to a competitive product being off the market for a period of time. ICD product sales for the full-year 2008 were $1.534 billion, representing an 18 percent increase over 2007.

Fourth quarter pacemaker sales were $293 million, an increase of 5 percent from the comparable quarter of 2007. Total pacemaker sales for 2008 were $1.167 billion, up 10 percent over 2007.

Atrial Fibrillation (AF)

AF product sales for the fourth quarter totaled $156 million, a 33 percent increase over the fourth quarter of 2007. Total AF sales for 2008 were $546 million, a 33 percent increase over 2007.

Neuromodulation

St. Jude Medical sales of neuromodulation products were $78 million in the fourth quarter of 2008, up 32 percent from the comparable quarter of 2007. Total neuromodulation product sales for 2008 were $254 million, up 21 percent over 2007.

Cardiovascular

Total cardiovascular sales, which include primarily vascular closure and heart valve products, were $219 million for the fourth quarter of 2008, a 7 percent increase over the fourth quarter of 2007. Total cardiovascular product sales for 2008 were $862 million, up 9 percent over 2007.

Sales of vascular closure products in the fourth quarter of 2008 were $92 million, a 1 percent increase over the fourth quarter of 2007. Total vascular closure product sales for 2008 were $368 million, up 4 percent over 2007.

Total heart valve product sales for the fourth quarter of 2008 were $79 million, a 7 percent increase over the fourth quarter of 2007. Total heart valve product sales for 2008 were $322 million, up 11 percent over 2007.

Fourth quarter and full-year earnings results

In the fourth quarter, the company recorded purchased in-process research and development charges of $319 million, or $0.92 per share, related primarily to the previously announced acquisition of MediGuide, Inc. The company also recorded other pre-tax charges of $162 million, or $0.29 per share, comprised principally of non-cash intangible asset impairment charges. In addition to these charges, during the fourth quarter, the company recorded a retroactive benefit of approximately $0.05 per share related to the research and development credit for the first nine months of 2008. Including these items, reported net loss for the fourth quarter of 2008 was $194 million, or $0.56 per share. This compares to reported net earnings for the fourth quarter of 2007 of $118 million, or $0.34 per share. Excluding these charges and the income tax benefit recorded in the fourth quarter, adjusted net earnings for the fourth quarter of 2008 were $210 million, or $0.60 per share. Adjusted net earnings for the full year 2008 were $807 million or $2.31 per share.