St. Jude Medical Announces Investment in Epicor Medical, Inc.

ST. PAUL, Minn.--()--May 2, 2003--St. Jude Medical, Inc. (NYSE:STJ) announced today it has made a $15 million minority investment in Epicor Medical, Inc., a developer of new devices for the treatment of atrial fibrillation (AF) which is the most common cardiac arrhythmia and a significant worldwide health care challenge. The agreement also provides that St. Jude Medical will acquire Epicor Medical in 2004 for an additional $185 million provided a number of specific clinical and regulatory milestones are achieved. Other terms of the transaction were not disclosed.

Epicor Medical, Inc., located in Sunnyvale, California, was founded in 1999 to develop new technologies to treat patients with atrial fibrillation. Epicor is currently pursuing clinical evaluation of its High Intensity Focused Ultrasound (HIFU) ablation system for epicardial treatment of atrial fibrillation. Using a proprietary approach, the Epicor technology allows an ablation device to be placed on the outside of the heart and deliver focused ultrasound energy across the wall of the heart to create very precise and complete lines of electrical block to halt the propagation of atrial fibrillation. This technique has been shown in early data to have the potential for safe and effective treatment of AF with a minimally invasive approach and without placing the patient on a cardiopulmonary bypass system.

Atrial fibrillation (AF) is a cardiac rhythm disorder in which the upper chambers of the heart do not beat effectively because of abnormal electrical activity. AF results in reduced cardiac output, exacerbates heart failure and can result in the pooling and clotting of blood in the heart, leading to stroke or other neurological problems. Atrial fibrillation affects six million people worldwide. The disorder is progressive, expanding in incidence and severity with age. The various treatments available at this time are largely only palliative. The economic impact of AF is increasing as the population ages.

Commenting on the Epicor Medical investment, St. Jude Medical Chairman and CEO Terry L. Shepherd said, "This investment in Epicor Medical has the potential to strengthen St. Jude Medical's position in the treatment of atrial fibrillation, a major health care challenge. Epicor's technology is unique and has the potential to deal definitely and simply with patients suffering from even the most difficult forms of AF. The Epicor technology to cure AF represents an important potential addition to St. Jude Medical's portfolio of solutions for treating this disease."

Added Jane J. Song, President of the Company's Cardiac Surgery business, "Epicor Medical's epicardial surgical ablation system would represent a new growth opportunity for our organization and would leverage St. Jude Medical's long-standing close relationship with cardiac surgeons. Surgeons today use St. Jude Medical valve products during heart valve replacement and repair procedures and our connector products to facilitate coronary artery bypass grafting. Epicor would add a surgical solution to our portfolio to treat atrial fibrillation, a condition surgeons face on a regular basis in their practice."

Epicor Medical is working closely with Dr. James Cox, President, World Heart Foundation, Washington, D.C., the developer of the Cox-Maze surgical procedure for the treatment of atrial fibrillation, to develop its HIFU ablation system and the related surgical procedure. Dr. Cox commented, "The use of HIFU and the Epicor device may offer us the opportunity to more effectively treat patients with atrial fibrillation. The unique properties of HIFU technology as well as the design of the Epicor Medical devices lend themselves to off pump and epicardial application. Epicor's technology is well positioned for use in minimally invasive applications. This could open up an entirely new patient population and procedures where patients today are not being optimally treated or not treated at all."

Casey Tansey, CEO and President of Epicor Medical, Inc., added, "We are very pleased with St. Jude Medical's investment and their support of our AF technology. We believe our technology represents the next generation of AF therapy and St. Jude Medical's approach to surrounding AF with multiple technologies as well as its unparalleled access to the cardiac surgery clinical community represent a potentially powerful partnership."

An acquisition of Epicor Medical, Inc. would expand St. Jude Medical's "Surround AF" strategy offering clinicians sophisticated devices and catheter systems to treat, suppress and cure atrial fibrillation. St. Jude Medical pacemaker products incorporate the Company's unique AF Suppression(TM) algorithm, the first clinically proven technology to suppress atrial fibrillation. St. Jude Medical has announced U.S. Food and Drug Administration (FDA) approval of the Epic Plus (R) ICD, the first high-voltage device to incorporate its AF Suppression(TM) technology. The Company also offers a broad array of advanced catheter systems for use by electrophysiologists in the clinical management of patients with atrial fibrillation. An investigational device exemption (IDE) application has been approved by the FDA for a feasibility study using St. Jude Medical's proprietary Lineage(TM) PV ablation system to treat AF with a catheter based system.

St. Jude Medical will host a conference call on the Epicor Medical investment at 9:00 am ET (8:00 am CDT) today on the following website:

http://phx.corporate-ir.net/phoenix.zhtml?c=73836&p=irol- EventDetails&EventId=739406. (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser's URL address field.)

Any statements made regarding the Company's anticipated future product launches, regulatory approvals, revenues, earnings, market shares, and potential clinical success are forward-looking statements which are subject to risks and uncertainties, such as those described in the Financial Section of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2002 (see pages 6-8). Actual results may differ materially from anticipated results.

St. Jude Medical, Inc. (www.sjm.com) is dedicated to the design, manufacture and distribution of innovative medical devices of the highest quality, offering physicians, patients and payers unmatched clinical performance and demonstrated economic value.

Contacts

St. Jude Medical, Inc., St. Paul
Investor Relations:
Laura Merriam, 651/766-3029
or
Media Relations:
Peter Gove, 651/481-7790
or
Epicor Medical, Inc.
Casey Tansey, 408/733-6500

Contacts

St. Jude Medical, Inc., St. Paul
Investor Relations:
Laura Merriam, 651/766-3029
or
Media Relations:
Peter Gove, 651/481-7790
or
Epicor Medical, Inc.
Casey Tansey, 408/733-6500