Wilson Greatbatch Technologies has extended its agreement to supply medical device maker St. Jude Medical with batteries and other components for its cardiac rhythm management products.
The agreement, which extends Wilson Greatbatch's supply arrangement with St. Jude that had been scheduled to expire at the end of 2006 by two additional years, the Clarence-based battery maker said.
The extension from Wilson Greatbatch's second-biggest customer comes at a time when the company has been under pressure from cutbacks by Guidant, its largest customer, that have cut into the firm's battery and component sales and caused it to reduce its earnings forecasts.
The deal with St. Jude also makes the St. Paul, Minn.-based company the first cardiac rhythm management device maker to include Wilson Greatbatch's new Quasar battery technology, scheduled to be launched later this year and early next year, in its product development plans. St. Jude also is including technology that Wilson Greatbatch obtained through its acquisition last spring of NanoGram Devices Corp. in its product development schedule, the battery maker said.
The extension could take some of the sting out of the cutbacks by Guidant, said Jason R. Mills, an analyst at First Albany Capital, which began following Wilson Greatbatch stock two weeks ago with a buy rating.
St. Jude, buoyed by new implantable cardiac defibrillator devices, could "provide a positive tail wind" for Wilson Greatbatch if its high-power cardiac rhythm management sales growth outpaces the industry, as Mills said he expects. If that happens, St. Jude could supplant Guidant as Wilson Greatbatch's biggest customer, Mills said Monday in a research note.