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St. Jude Medical Brings Legal Action Against Muddy Waters and MedSec

September 07, 2016

St. Jude Medical Turns to the Court to Hold Muddy Waters and MedSec Accountable for their Financially Motivated False Statements and Scare Tactics Aimed at Patients with Heart Conditions

ST. PAUL, Minn.--(BUSINESS WIRE)-- St. Jude Medical, Inc. (NYSE:STJ), a global medical device company, announced today that it has filed a lawsuit against Muddy Waters Consulting LLC, Muddy Waters Capital LLC, MedSec Holdings, Ltd., MedSec LLC, and three individual defendants who are principals in these firms, for false statements, false advertising, conspiracy and the related manipulation of the public markets in connection with St. Jude Medical’s implantable cardiac management devices. With this action, St. Jude Medical seeks to hold these firms and individuals accountable for their false and misleading tactics, to set the record straight about the security of its devices, and to help cardiac patients and their doctors make informed medical decisions about products that enhance and save lives every day.

"We felt this lawsuit was the best course of action to make sure those looking to profit by trying to frighten patients and caregivers, and by circumventing appropriate and established channels for raising cybersecurity concerns, do not use this avenue to do so again,” said Michael T. Rousseau, president and chief executive officer at St. Jude Medical. "We believe this lawsuit is critical to the entire medical device ecosystem — from our patients who have our life saving devices, to the physicians and caregivers who care for them, to the responsible security researchers who help improve security, to the long-term St. Jude Medical investors who incurred losses due to false accusations as part of a wrongful profit-making scheme."

The lawsuit filed today alleges that Muddy Waters, MedSec and the other defendants intentionally disseminated false and misleading information in order to lower the value of St. Jude Medical’s stock and to wrongfully profit from a drop in share value through a short-selling scheme. The company’s complaint refers to the Muddy Waters and MedSec repeated false allegations that began on August 25, 2016 about St. Jude Medical’s implantable cardiac devices. As further explained in the company’s complaint, the defendants’ financially self-interested attempts to mislead doctors and patients demonstrate a total disregard for the patients whose lives depend on their cardiac management devices. The complaint also cites a third-party assessment of the Muddy Waters Report by University of Michigan researchers who found that “the evidence does not support their conclusions… [the University of Michigan researchers] were able to generate the reported conditions without there being a security issue.” In addition, an electrophysiologist and cardiologist from the University of Michigan also stated that “given the significant benefits from home monitoring, patients should continue to use their prescribed cardiac devices” at this time.

“We recognize that the cybersecurity landscape is dynamic, which is why we partner with researchers, agencies, consultants and others to continually strengthen our security measures currently in place,” said Phil Ebeling, vice president and chief technology officer at St. Jude Medical. “We also have processes in place to encourage anyone with information about the security of our technology to share it with us so that we can enhance our technology for the benefit of patients.”

St. Jude Medical devices save and improve lives every day, and our devices and systems have multiple features to reduce the risk of cyber security attacks. St. Jude Medical has worked, and will continue to work, with the Food and Drug Administration, the Department of Homeland Security and independent researchers to continually strengthen its security systems in the ever changing cybersecurity environment.

"Our top priority is to reassure patients, caregivers and physicians who use our life-saving devices that we are committed to the security of our products and to ensure patients and their doctors maintain ongoing access to the proven clinical benefits of remote monitoring," said Mark Carlson, vice president and chief medical officer at St. Jude Medical. "We decided to take this action because of the irresponsible manner in which these groups have acted."

The lawsuit was filed in the United States District Court for the District of Minnesota. This case follows St. Jude Medical's recent statements that refuted claims by Muddy Waters and MedSec regarding the safety and security of our pacemakers and defibrillators.

About St. Jude Medical

St. Jude Medical is a leading global medical device manufacturer and is dedicated to transforming the treatment of some of the world's most expensive epidemic diseases. The company does this by developing cost-effective medical technologies that save and improve lives of patients around the world.

Headquartered in St. Paul, Minn., St. Jude Medical employs approximately 18,000 people worldwide and has five major areas of focus that include heart failure, atrial fibrillation, neuromodulation, traditional cardiac rhythm management and cardiovascular. For more information, please visit sjm.com or follow us on Twitter @SJM_Media.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include the expectations, plans and prospects for the company, including potential clinical successes, reimbursement strategies, anticipated regulatory approvals and future product launches, and projected revenues, margins, earnings and market shares. The statements made by the company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include market conditions and other factors beyond the company’s control and the risk factors and other cautionary statements described in the company’s filings with the SEC, including those described in the Risk Factors and Cautionary Statements sections of the company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2016 and Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2016. The company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance.

Source: St. Jude Medical, Inc.

St. Jude Medical, Inc.

J.C. Weigelt, 651-756-4347

Investor Relations

jweigelt@sjm.com

or

Candace Steele Flippin, 651-756-3029

Media Relations

csflippin@sjm.com

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