Nov. 29 (Bloomberg) -- St. Jude Medical Inc., the second-largest manufacturer of heart rhythm devices, authorized a share buyback program for as much as $1 billion amid a U.S. regulatory review for the manufacturing of one of its key products.
The purchases will occur on the open market or in privately negotiated transactions with cash on hand or other readily available funds, the St. Paul, Minnesota-based company said today in a statement. It had 308 million shares outstanding as of Nov. 28.
St. Jude’s shares plunged the most in three years last week after U.S. government inspectors criticized the way it manufactured and tested the Durata wire that connects a life-saving defibrillator to the heart. Some doctors have raised questions about the safety of the Durata, which replaced the older Riata wires the company recalled last year. St. Jude says it is actively monitoring Durata patients and there are no signs of increased risk of failure with the device.
“This share repurchase program demonstrates the confidence our board and management team have in the long-term prospects for St. Jude Medical,” Chief Executive Officer Daniel Starks said in the statement. “We remain committed to delivering superior results and value to our shareholders.”
St. Jude rose 2.4 percent to $33.69 at the close in New York before the buyback program was announced. The shares have lost 23 percent since their three-month peak of $43.69 on Oct. 5. Minneapolis-based Medtronic Inc. is the largest manufacturer of heart rhythm devices.
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