st. jude medical 2015 investor...

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TITLE GUIDE TITLE GUIDE

SUBHEAD GUIDE SUBHEAD GUIDE

ST. JUDE MEDICAL 2015

INVESTOR CONFERENCE

February 6, 2015

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WELCOME AND OPENING

REMARKS

Dan Starks, Chairman, President and CEO

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This presentation 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, 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 December 28, 2013 and Quarterly Report on Form 10-Q

for the fiscal quarter ended September 27, 2014. The Company does not intend to update these statements and

undertakes no duty to any person to provide any such update under any circumstance.

The Company will be using non-GAAP financial measures (e.g., constant currency sales growth, adjusted net

earnings, etc.) in this presentation. Investors should consider non-GAAP measures in addition to, and not as a

substitute for, financial performance measures prepared in accordance with GAAP. For a reconciliation of our

non-GAAP financial measures to our GAAP results, please visit the investor relations portion of our website:

investors.sjm.com.

FORWARD-LOOKING STATEMENTS

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AGENDA

8:00 a.m. Overview of St. Jude Medical’s 2015 growth program.

Dan Starks, Chairman, President and Chief Executive Officer

Our continued focus on returning shareholder value.

Don Zurbay, Chief Financial Officer

The CardioMEMS HF System is a catalyst for 2015.

Mike Rousseau, Chief Operating Officer

Philip Adamson, M.D., MSc, FACC

Our neuromodulation business will return to growth in the U.S.

Eric Fain, M.D., Group President

Panel for Q&A

10:00 a.m. Break

New ablation systems are another catalyst for 2015.

Joel Becker, President, Americas Division

Highlights of our CRM and CV businesses.

Eric Fain, M.D., Group President

Panel for Q&A

Lunch Buffet

12:30 p.m. Meeting Ends

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OVERVIEW OF ST. JUDE

MEDICAL’S 2015 GROWTH

PROGRAM

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ST. JUDE MEDICAL

MILESTONES IN 2014

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BULLET GUIDE BULLET GUIDE

HEADER GUIDE HEADER GUIDE

We have become “One St. Jude Medical” instead of a decentralized

company organized into multiple divisions focused on different

physician specialties.

Our transition from four product divisions to one streamlined

organization helps us leverage our scale, reduce costs, and strengthen

our focus on the new customer profile that is emerging as a result of

structural changes in the health care market.

This will help us continue to leverage adjusted EPS on a constant

currency basis in a growth oriented environment in 2015 and beyond.

WE COMPLETED THE REALIGNMENT OF OUR

GLOBAL BUSINESS.

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We completed remediation of the FDA warning letters previously issued

to our Plano and Sylmar facilities.

We improved the quality and efficiency of multiple product development

capabilities that should benefit us long term.

R&D resources that were focused on warning letter remediation have

been re-allocated to innovation and new products.

Results already are visible – Allure Quadra™ CRT-P, Endurity™ and

Assurity™ pacemakers, Optisure™ high voltage lead, Protégé™,

Prodigy™ and Proclaim™ SCS devices, Infinity™ DBS system,

and more.

WE STRENGTHENED OUR QUALITY SYSTEMS AND OUR

PRODUCT QUALITY.

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EndoSense™ (2H ‘13) – TactiCath™ contact force sensing ablation

platform approved by FDA, Q-4 ‘14.

Nanostim™ (2H ‘13) – Nanostim leadless pacemaker is in an IDE

clinical trial.

CardioMEMS™ (1H ‘14) – the first phase of product launch is underway

in the U.S.

NeuroTherm™ (2H ‘14) – integration and sales force training is

complete. Product line launches are underway.

WE STRENGTHENED OUR PRODUCT PORTFOLIO WITH

FOUR ACQUISITIONS IN FOUR QUARTERS.

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EnligHTN™ renal denervation program – the market collapsed due to a

competitor’s clinical trial failing to meet its endpoint.

Portico™ TAVR program – we temporarily suspended implants to

evaluate reports of possible valve leaflet motion anomalies that turned

out to be a false alarm. The impact on our program is a delay of 9 to

12 months.

In addition, we continue to await FDA clarification of regulatory

approval requirements relating to LAA closure and PFO closure

potential growth driver programs.

WE ABSORBED SET BACKS ON TWO MAJOR GROWTH

DRIVER PROGRAMS.

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WE DELIVERED 2014 RESULTS THAT MET OR EXCEEDED

THE GUIDANCE WE GAVE FOR THE YEAR IN

JANUARY 2014.

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LOOKING FORWARD TO

2015

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ST. JUDE MEDICAL’S GROWTH PROGRAM IS BASED ON

INNOVATION THAT HELPS REDUCE THE COST OF

HEALTH CARE AND IMPROVE PATIENT OUTCOMES FOR

SOME OF THE MOST EXPENSIVE, EPIDEMIC DISEASES.

Cardiac arrhythmias

Heart failure

Other cardiovascular disease

Chronic pain

Movement disorders (DBS)

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This aligns us with our customers and with all of the goals of global

health care reform long term.

We can capture the virtuous cycle of innovation – (1) save customers

money and improve patient care, (2) with higher ASP’s and a stronger

gross margin, (3) supporting increased investment in R&D, (4) leading

to more innovation and new growth drivers that accelerate sales

growth, (5) while saving customers money and improving patient care.

St. Jude Medical marches to the beat of a different drummer.

AN INNOVATION BASED GROWTH PROGRAM CAN GIVE

US SUSTAINABLE STRATEGIC ADVANTAGE.

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This almost always requires synergy of technology, disease state, or customer

call point between the new market and one or more markets already within

our portfolio.

Our CRM business provides synergy with our AF, HF, chronic pain, and DBS

growth drivers.

Success in our AF, HF, chronic pain, and DBS growth drivers can help

improve the economics, investment, and the competitiveness of our CRM

business.

This impacts our gross margin, level of R&D investment, innovation, level of

service to customers, and more.

WE ONLY ENTER MARKETS WHERE WE THINK WE HAVE A

COMPETITIVE ADVANTAGE AND A CREDIBLE

OPPORTUNITY TO WIN ON A SUSTAINABLE BASIS.

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OUR MARKETS FOR 2015 EXCEED $21 BILLION IN SIZE

AND ARE GROWING AN AVERAGE OF 4%.

Size

Market $ billions Growth %

Cardiac arrhythmias1 13.4 3%

HF2 .1 N/A

Structural Heart 3.5 10%

Vascular 2.1 3%

Chronic Pain3 2.0 8%

DBS .5 10%

21.6

1 AF/CRM 2 CardioMEMS only 3 SCS and spinal nerve ablation

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Full year impact of CardioMEMS™.

Full year impact of new ablation catheters.

Return to growth in our neuromodulation business in the U.S.

OUR SUCCESS IN 2015 WILL BE DEFINED PRIMARILY BY

OUR ABILITY TO ACCELERATE OUR SALES GROWTH DUE

TO 3 CATALYSTS.

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Patient demographics, reimbursement, and overall health care economics

surrounding CardioMEMS™ in the U.S. are extremely favorable.

We have no competitors.

We envision superior ROI for developing the market.

CardioMEMS™ may pull through CRM market share due to the common

Merlin™ remote care platform and the other device synergies.

CardioMEMS™ revenue and product pull-through in 2H 2015 will provide

good visibility for revenue growth for the U.S. in 2016 and for international

markets in future years.

FULL YEAR IMPACT OF OUR CARDIOMEMS™ HF

MONITORING SYSTEM.

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The AF/EP market is $3.4 billion. The ablation catheter segment alone is $1.1

billion. Both are expected to grow at a low double digit rate.

Customer preference for STJ ablation catheters will generate stand alone

revenue and may help pull through our entire bundle of AF/EP products

including our mapping system, introducers, diagnostic catheters, and our

integrated lab.

Market share gains in 2015 can create an annuity of double digit revenue

growth in 2016 and beyond in this portion of our portfolio.

FULL YEAR IMPACT OF OUR TACTICATH™ AND

FLEXABILITY™ LINES OF ABLATION CATHETERS.

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New products already on the market – (1) Protégé™ SCS, (2) portfolio of

spinal nerve ablation devices.

Products expected to come to the U.S. market in 2015 – (1) Invisible trial

system, (2) Proclaim™ SCS, (3) iPad mini™ clinical programmer, (4) iPod

touch™ patient programmer, (5) Axium™ DRG SCS system, (6) Infinity™ DBS

system, (7) DBS directional lead.

We expect to exit 2015 with good visibility that our global neuromodulation

revenue can continue to grow at a strong double digit rate for the

foreseeable future.

RETURN TO GROWTH IN OUR NEUROMODULATION

BUSINESS IN THE U.S. WILL BE DRIVEN BY A STRONG

PORTFOLIO OF NEW PRODUCTS.

iPod touch and iPad mini are trademarks of Apple Inc.

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Successful launch of new products in our CRM and CV businesses.

Advance St. Jude Medical innovations in 2015 to sustain accelerated sales

growth in 2016 and beyond.

Continue to leverage adjusted EPS on a constant currency basis.

Maintain the cash flow and balance sheet to continue to repurchase stock,

increase our dividend, and fund disciplined acquisitions as appropriate.

OUR SUCCESS IN 2015 WILL ALSO DEPEND ON A BROAD

RANGE OF OTHER ACCOMPLISHMENTS.

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OUR CONTINUED FOCUS

ON RETURNING

SHAREHOLDER VALUE Don Zurbay, Chief Financial Officer

DELIVERING ON OUR COMMITMENTS

Constant

Currency

Sales

Growth

2014

Guidance

2014

Results

Constant

Currency

Adjusted

EPS

Growth

Adjusted

Gross

Margin

3-5%

6%-8%

71.5%-72.0%

9%

71.7%

4%

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Our 2015 guidance calls for constant currency sales growth of

3-5% and constant currency adjusted EPS growth of 8-10%.

We are committed to continuously improving our operational

efficiency and have the opportunity to continue taking significant

costs out of our business.

We are continuing to expand manufacturing in cost

advantaged locations.

Accelerating sales growth will provide natural leverage on our

underlying infrastructure and cost base.

WE ARE WELL POSITIONED TO CONTINUE DELIVERING

EPS LEVERAGE IN 2015 AND BEYOND

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CONSISTENT GROSS MARGIN

73.1% 73.2% 73.0% - 73.5%

64.0%

66.0%

68.0%

70.0%

72.0%

74.0%

76.0%

2013 2014 2015

Adjusted Gross Margin, Excluding Foreign

Currency Impact and Excise Taxes

(est.)

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Our gross margin faces headwinds from geographic and product mix shifts and

lower average selling prices.

We expect to offset the headwinds impacting gross margin through:

Ongoing product cost improvement initiatives and benefits from the 2014

centralization of our world-wide manufacturing and supply chain organization.

Consolidation of facilities and processes, leveraging suppliers, streamlining logistics,

and alignment of best practices globally.

Improved scale of our growth drivers (CardioMEMS™ HF System and

ablation catheters).

Continued expansion of our manufacturing in cost advantaged locations.

We continue to advance toward our internal goal of 80% our world-wide

volume in cost advantaged locations.

WE ARE WELL POSITIONED TO MAINTAIN OR IMPROVE

OUR GROSS MARGIN BEYOND 2015

Adjusted SG&A expenses excluding amortization in 2014 were

approximately 170 basis points lower than in 2011.

Our adjusted SG&A ratios will continue to improve as we continue to

realize the benefits of centralization and accelerate our sales growth.

The commercialization of our growth drivers in 2015 will require

investment in our field selling organization.

2015 guidance implies up to 50 basis points of improvement in adjusted

SG&A as a percentage of constant currency sales as we balance these

investments with continued operational efficiency.

The optimization of our cost structure allows us to remain committed to

our innovation-based growth strategy with our investment in R&D at

approximately 12% of sales.

OPTIMIZATION OF OUR COST STRUCTURE

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ADJUSTED INCOME TAX RATE

Largest driver of our tax rate improvement is expansion of manufacturing in cost

advantaged locations.

25.0%22.8% 22.4% 21.8%

19.1%17.5% - 18.5%

2010 2011 2012 2013 2014 2015 (est.)

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Balances as of January 3, 2015:

Cash on hand $1.4B

Debt outstanding $3.9B

Current credit ratings: Moody’s-Baa1, S&P-A, Fitch-A

For the five years ended 2014, we have generated cash flow from

operations of approximately $6.2B.

We have ample capacity to continue returning capital to shareholders

while maintaining the capacity to augment our growth strategy with

disciplined acquisitions.

WE BENEFIT FROM STRONG AND CONSISTENT

CASH FLOW

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DELIVERING SHAREHOLDER VALUE

Cash Dividends$1.1B

Adjusted Share Repurchases

$3.1B

Acquisitions and Certain

Strategic Investments

$2.3B

(9% CAGR)

($43 average share price)

2010 -2014

Capital

Deployment

History

Free Cash Flow for this period is $4.9B

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Our goal is to grow constant currency sales at a 3% to 5% rate for full

year 2015 and create the conditions to support sales acceleration.

We expect to continue delivering EPS leverage.

We have consistent and strong cash flow to continue to repurchase

stock, increase our dividend and fund disciplined acquisitions

as appropriate.

SUMMARY

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THE CARDIOMEMS™ HF SYSTEM

IS A CATALYST FOR 2015


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1) Are we improving patient outcomes?

2) Can we help health care systems reduce costs?

3) Can we effectively develop new markets?

4) Can we scale and grow quickly?

5) Can we execute on our strategy?

LAUNCHING INNOVATION – THE QUESTIONS WE NEED

TO ANSWER

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Dr. Philip Adamson:

Joined St. Jude Medical in February 2015 as Vice President and Medical Director,

Heart Failure Therapies

Co-Principal Investigator for CHAMPION Trial

Founded the Heart Failure Treatment Program at the University of Oklahoma

in 1995

Developed a novel cardiology training curriculum designed to provide

skills in device implantation along with expertise in out-patient

multidisciplinary management

Established the Heart Failure and Pulmonary Hypertension Treatment Institute

at Oklahoma Heart Hospital in 2005

Has been closely involved in developing implantable hemodynamic monitoring

systems to improve success of outpatient heart failure and pulmonary

hypertension management

INTRODUCTION

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EXPERIENCE IMPLEMENTING

THE CARDIOMEMS™ HF

SYSTEM TECHNOLOGY Philip Adamson, MD, MSc, FACC

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Heart Failure – Epidemic and growing

5-6M Americans suffer from HF1

> 650K new heart failure diagnoses each year2,3

1M HF hospitalizations each year4

$31B in 2013, more than doubling to $70B by 20306

We need a new way to manage these patients without relying

on hospitalization

High re-admission rates

25% re-admission within 30 days3

50% re-admission within 6 months7

THE EXPENSIVE EPIDEMIC PROBLEM

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FDA Approved Indications

The CardioMEMS™ HF System is indicated for wirelessly measuring and

monitoring pulmonary artery (PA) pressure and heart rate in New York Heart

Association (NYHA) Class III heart failure patients who have been

hospitalized for heart failure in the previous year. The hemodynamic data

is used by physicians for heart failure management and with the goal of

reducing heart failure hospitalizations.

CARDIOMEMS™ HF SYSTEM – THE NEW WAY

OTHER APPROACHES HAVE BEEN EVALUATED

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COMPASS

HOMEOSTASIS

CHAMPION

Right Parameter – Pressure

Right Patients – Class III

Right Approach – Management to target pressures and

physician directed patient self management


Right Patients – Class III

Right Approach – Management to target pressures


Right Patients – Class III showed significant benefit

Wrong Patients – Including Class IV resulted in no benefit

Wrong Approach – Management to pressure spikes

X X

SUBSTANTIAL EVIDENCE SUPPORTING PA PRESSURE

MONITORING IN CLASS III HF PATIENTS

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Meaningful clinical outcomes

37% reduction in HF hospital admissions at average 15 months follow-up8,

Increasing to 49% when extended to 18 months follow-up12

Safe and reliable

Patient Quality of Life aligned with Hospital Payment Priorities

58% reduction in all-cause readmissions12

78% reduction in HF 30-day readmissions12 (recently presented at AHA 2014)

Safe and effective means to reduce overall hospitalization burden and 30-day

readmissions problem – maintaining stability vs. reacting to disaster

THE ONLY FDA APPROVED IMPLANTABLE SYSTEM TO

MONITOR PA PRESSURE

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Diastolic or preserved Ejected Fraction (EF)

(HFpEF) patients represent ~50% of all HF patients

Pulmonary Artery (PA) pressure-guided therapy

significantly reduced HF hospitalizations in the

treatment group by 50% and 60% at 6 and 15

months (p < 0.0001 and p < 0.0004, respectively)13

Effect in HFpEF patients even more dramatic than

systolic HF patients with estimated NNT = 2

CardioMEMS™ HF System is the first effective

treatment strategy to manage 50% of patients

hospitalized with HF

LIMITED EFFECTIVE ALTERNATIVE FOR

PRESERVED EF POPULATION

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Initial centers are already actively monitoring patients in context of

disease management systems

Care coordination across specialties

Managing HF patient quality of life established as priority

Infrastructure, workflow and commitment to remote monitoring

Already intensely monitoring patients

CardioMEMS™ HF System provides data with excellent and proven

clinical meaning – improving established infrastructure

PROFILE OF IDEAL, INITIAL CENTER FOR CARDIOMEMS™

HF SYSTEM

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Heart failure team spends 2 to 6 weeks reviewing PA pressure waveforms to establish individual patterns,

stabilize static medications, titrate pressure drugs and coach lifestyle changes through telephonic patient

management or in-office evaluation

Once baseline pressures lower toward the target mean PA of 10 to 25 mm Hg10, the patient can move into the

maintenance phase monitoring for positive or negative changes

HOW DOES CARDIOMEMS™ HF SYSTEM DATA FIT INTO

THE EXISTING INFRASTRUCTURE

Patient Identification

Implant Lower

Baseline Pressure

Maintenance

MANAGE PA

PRESSURES

TITRATE

MEDICATIONS

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Center success less dependent upon implant procedure and

more dependent upon ongoing management of patient to pressure

Patients monitored weekly for trends

Notifications of changes to medications as needed based on variance to range

Cardiologists are well trained in the hemodynamic assessment of HF and

cardiovascular disease – this is not a new mindset

HF centers have the patients – our job is to educate across the care

coordination team about managing to pressure

LESSONS LEARNED FROM ONE CENTER:

DEPLOYING THE TECHNOLOGY

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HF nurse practitioners and nurses within HF clinic have high degree of patient

contact and are both committed to improving patient quality of life and

improving own service burden

This group strongly influences technology adoption within a center given day-

to-day responsibility for managing these complex and challenging patients

Initial concern may be the potential burden of data but seeing is believing

Changes in re-hospitalization and quality of life for “frequent flier patients”

drive adoption

Benefits are realized quickly

THE CARE TEAM IS CRITICALLY IMPORTANT

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CARDIOMEMS™ HF SYSTEM

COMMERCIALIZATION


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We offer improved patient outcomes and a new standard-of-care

The ability to better manage patients suffering from this expensive, epidemic disease

Better patient outcomes and quality of life

Treat a patient population which currently has no alternative treatment (HFpEF)

TECHNOLOGY VALIDATED IN CLINICAL PRACTICE AS

UNIQUE GAME CHANGING SOLUTION

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CardioMEMS™ HF System is a different sale

A new paradigm of care for heart failure

Majority of implanters are ICs (~70%)

Training is focused on patient identification and managing to pressure

System sale includes sensor and patient/hospital electronics

Multiple stakeholders – each center presents new challenges

Physician and/or HF nurse champions technology within center

Internal administrative alignment required for site initiation

VALIDATED SELLING METHODOLOGY

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Rep profile is different

Pharma detailing for market development vs. traditional device rep service model

More repeatable, easier to scale

Lower cost (service burden and compensation model)

Service profile is different

Majority of field force is HF Specialists familiar with managing these complex patients

Teaching HF Nurses how to manage to pressure

Training to self-sufficiency

Aggressively hiring and training talent

Based on pharmaceutical detailing model

HF Specialists for onboarding and training customers to manage to pressure

Accelerating contracting and onboarding process

REFINING SELLING PROCESS AND SCALING ORGANIZATION

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CMS declared CardioMEMS™ HF System a “substantial clinical improvement

over existing services or technologies”

Inpatient MS-DRG 264 New Technology Add-On Payment (NTAP) granted,

effective October 1, 2014

Outpatient Transitional APC Pass-Through Payment Status (TAPTS) granted,

effective January 1, 2015

POSITIVE U.S. REIMBURSEMENT DECISIONS

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Procedure is relatively straightforward at ~20-30 minutes, lends itself

to outpatient setting

Centers do not have to wait for HF hospital admission or consider

2-midnight rule; can proactively schedule “frequent fliers”

Appropriate reimbursement is now established within the ideal

CardioMEMS™ HF System site of service

THE VALUE OF OUTPATIENT TRANSITIONAL

APC PASS-THROUGH PAYMENT STATUS (TAPTS)

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CardioMEMS™ HF System

Quadra Assura™ CRT-D and Quadra Assura MP™ CRT-P:

Leader and innovator in Quadripolar therapy

180-day overall costs show savings of $2,1979

Trifecta™ stented tissue valve with Linx™ AC technology:

Best-in-class mean pressure gradient with Trifecta™ valve14

Remote Monitoring:

Proven benefit with remote monitoring solutions

17% reduction in total spending over 3 years ($10,640) per ICD/CRT-D patient11

9% reduction in total spending over 3 years ($4,356) per pacemaker patient11

CARDIOMEMS™ HF SYSTEM IS CORNERSTONE OF

PROVEN HF FORMULARY

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2015 KEY PRIORITIES IN EXECUTING OUR STRATEGY

Strategically and opportunistically increase number of active centers

Generate market awareness to drive patient flow

Onboard new centers

Certify through 3 proctored implants

Train for and reinforce managing to pressure (ongoing, virtual)

Maximize meaningful product iterations in 2015

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Enhance Clinical Workflow

Involve Patients in Managing their Health

Create a New Dynamic in the Management of HF Patients

LEADING WITH CONTINUED INNOVATION

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CLINIC WORKFLOW ENHANCEMENTS

Consolidated, centralized portal for all

patient data

Trend-driven, easily actionable

Improve clinic workflow

Automate phone calls/texts

Integrate data to EHR through exporting PDF

PRODUCT NOT FDA APPROVED. IDEAS UNDER DEVELOPMENT.

John Doe

Images do not reflect actual patient data.

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A NEW MODEL OF PATIENT ENGAGEMENT EXITING 2015

Connect-Rx™ technology enables

automated notification to patient of

prescription adjustments

Improves HF clinic workflow and

efficiency by decreasing time demand of

clinician-to-patient interaction by

replacing phone calls

Medication updates entered on website

are electronically pushed to app running

on patient’s smartphone

Facilitates closed-loop EHR updating of

medication changes Connect-Rx is a trademark of McKesson Corporation and/or one of its subsidiaries.

PRODUCT NOT FDA APPROVED. IDEAS UNDER DEVELOPMENT.

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PHOTO 1/2

PHOTO 1/2

SUBHEAD GUIDE

CONTENT GUIDE


$4 $12

$0

$50

$100

Q3'14A Q4'14A FY'15E

CardioMEMS™ HF System

Approx.

$70 We expect 2015 sales to be

approximately $70M

Currently have over 90 signed

contracts

Over 325 active targets in the U.S.

Work has begun to establish

appropriate reimbursement in

key international markets

WE ARE CONFIDENT IN OUR ABILITY TO EXECUTE IN 2015

Revenue, $M

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The health care environment has changed dramatically, requiring new

approaches to cost-effective, value-added patient care

We have robust clinical evidence to support improved patient outcomes and

reduced HF hospital readmissions

Hospitals, physicians, patients and payers recognize and believe in our value

proposition

Selling CardioMEMS™ HF System is about treating heart failure, a highly

complex and costly disease

We have learned how to sell and install CardioMEMS™ into a HF program

and continue to improve, refine and replicate best practices

We are excited about our progress to date – now it is about execution

SUMMARY

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REFERENCES 1. American Heart Association commends CMS proposal to expand coverage for chronic heart failure patients. http://newsroom.heart.org/news /american-heart-association-

commends-cms-proposal-to-expand-coverage-forchronic-heart-failure-patients. Accessed December 23, 2013.

2. Go AS, Mozaffarian D, Roger VL, et al. Heart disease and stroke statistics 2013 update: A report from the American Heart Asso ciation. Circulation. 2013;127(1):e6-e245.

3. Yancy CW, Jessup M, Bozkurt B, et al. 2013 ACCF/AHA guideline for the management of heart failure: A report of the ACC/AHA Ta sk Force on Practice Guidelines. Circulation.

2013;128(16):1810-52.

4. Heidenreich PA, Trogdon JG, Khavjou OA, et al. Forecasting the future of cardiovascular disease in the United States: A polic y statement from the American Heart Association.

Circulation. 2011;123(8):933-44.

5. Blecker S, Agarwal SK, Chang PP, et al. Quality of care for heart failure patients hospitalized for any cause. J Am Coll Card iol. 2014;63(2):123-30.

6. Costs to treat heart failure expected to more than double by 2030. http://newsroom.heart.org/news/costs -to-treat-heart-failure-expected-to-more-than-double-by-2030. Accessed

April 23, 2014.

7. Hunt SA, Abraham WT, Chin MH, et al. 2009 focus update incorporated into the ACC/AHA 2005 guidelines for the diagnosis and ma nagement of heart failure in adults.

Circulation. 2009;119(14):e391-479(e437).

8. Abraham WT, Adamson PB, Bourge RC, et al. Wireless pulmonary artery haemodynamic monitoring in chronic heart failure: A rando mised controlled trial. Lancet.

2011;377(9766):658-66.

9. Graham CM, et al. Comparison of Healthcare Utilization and Hospital Costs for Quadripolar versus Bipolar LV Lead Technologies . HRS 2014. San Francisco, California. May 7-

10, 2014.

10. Ruel M, Rubens FD, Masters RG, et al. Late incidence and predictors of persistent or recurrent heart failure in patients with aortic prosthetic valves. J Thorac Cardiovasc Surg.

2004:127(1):149-59.

11. Sutton B, et al. Improved Health Outcomes and Cost -Savings With Remote Monitoring of Cardiac Implantable Electronic Devices. HRS 2013. Denver, Colorado. May 11, 2013.

PO06-54. Retrospective claims analysis of Medicare 5% sample Limited Data Set Standard Analytical Files claims and enrollment da ta across all manufacturers.

12. Adamson et al., Impact of Wireless Pulmonary Artery Pressure Monitoring on Heart Failure Hospitalizations and 30 -Day Readmissions in Medicare-Eligible Patients with NYHA

Class III Heart Failure: Results from the CHAMPION Trial AHA 2014, Chicago. Abstract 16744.

13. Adamson PB, Abraham WT, Bourge RC, et al. CardioMEMS heart sensor allows monitoring of pressures to improve outcomes in NYHA class III heart failure patients

(CHAMPION) trial: Impact of hemodynamic guided care on patients with preserved ejection fraction. J Card Fail. 2010;16(11): 913.

14. FDA PMA data and company IFUs.

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OUR NEUROMODULATION

BUSINESS WILL RETURN

TO GROWTH IN THE U.S. Eric Fain, M.D., Group President

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In 2014 STJ Neuromodulation revenue grew 25% in International vs. 5% decline in U.S. Difference in geographic performance reflects availability of new innovative products Acquired NeuroTherm™ to add radiofrequency (RF) Ablation to Chronic Pain portfolio

Approximately $2.2B market in 2015 ~$1.7B chronic pain; ~$0.5B deep brain stimulation (DBS)

Expect the 2015 global market will grow at a mid to high single digit rate on a constant currency (CC) basis

Severely underpenetrated markets

Increasing stigma and negative outcomes from long-term opioid use in chronic pain

Growing evidence for improved outcomes and health care economics with earlier intervention

Significant opportunities for growth through innovation

WW NEUROMODULATION DYNAMICS

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SUBHEAD GUIDE SUBHEAD GUIDE CHRONIC PAIN

WARNING LETTER AND REMEDIATION ACTIVITIES RESULTED

IN A GAP IN INNOVATION AND PRODUCT INTRODUCTIONS

>2000 2004 2008 2012 2014

2000

Renew™

2001-2002

Genesis™ GenesisXP

2005-2008

Eon™ EonC™

Eon Mini™

2014

Protégé™ Prodigy™

2009 - 2014

Warning Letter Remediation

Impact of Warning Letter:

No significant product launches for approximately 6 years

Loss of industry-leading innovation position

Resources committed to remediation activities

2008

Eon Mini™

65

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iPad Mini™

Clinical

Programmer

iPod touch™

Patient

Programmer

Invisible

Trial System

2015 MARKS THE RETURN TO INNOVATION WITH NEW

PRODUCT PLATFORMS ACROSS ALL PRODUCT AREAS

IPG

Patient

Controller

Clinician

Programmer

Trial

First Upgradeable, Burst and

tonic-enabled primary cell system

First Bluetooth™-enabled wireless

neurostimulation system

First Apple™ iPod touch™ and

iPad mini™ programming system

First Direct-connect trial system

First Implantable pulse generator (IPG) and

trial systems with competitive headers

2014 2015 Apple, iPod touch and iPad mini are trademarks of Apple Inc.

Bluetooth is a trademark of Bluetooth SIG, Inc.

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INVISIBLE TRIAL SYSTEM TO IMPROVE USER EXPERIENCE

Conventional Trial System

Invisible Trial System

Key Attributes

Discreet (totally concealed under clothing)

No cables to dislocate lead placement

during trial period

Wireless, secure Bluetooth™ communication

Intuitive user interface for patient controller

Burst and tonic stimulation enabled

Disposable, single-use headers, including

competitive lead compatibility

EU: Launch 1H 2015

U.S.: Launch 2H 2015

Product Features

New primary cell platform design with high

capacity batteries

Sizes and shapes provides improved IPG

placement options

Burst and tonic stimulation capable

Magnetic resonance imaging (MRI) compatible

Bluetooth™ communication to modern,

secure externals

Upgradeable technology

EU: Launch 1H 2015

U.S.: Launch 2H 2015

Future Launches

Competitive headers (2H 2015)

Rechargeable models (2016)

PROCLAIM™ ADVANCED PRIMARY CELL TECHNOLOGY TO

DRIVE SHARE CAPTURE

Proclaim™

(HC)

Proclaim™

(LC)

Volume 39 cc 30 cc

Estimated

longevity 6 years 4 years

68

Lateral Discriminatory

Pathway

Medial

Affective/Attentional

Pathway

Pain Perception

Attention to Pain

WHY BURST STIMULATION?

Pain processing patterns and pathways

Lateral discriminatory pathway – controls pain

perception

Medial affective/attentional pathway – controls

emotional response and attention to pain

stimuli

IPG stimulation patterns and pathways

Low and high frequency tonic – modulates only

the lateral pathway

Burst – modulates both the lateral and medial

pathways to maximize effectiveness

Communication Pattern Burst pattern mimics the natural firing patterns

of the brain for more effective modulation

Tonic Burst

Communication

Pattern

69

BURST STIMULATION PROVIDES BROAD ADVANTAGES

Attribute Benefit

Parameters within traditional ranges

requiring low-moderate energy

Unlike high frequency stimulation, recharging requirements are

the same as today and can be implemented in primary cell

devices (~50% in international markets)

Devices provide both tonic and

burst stimulation Provides options for treating evolving pain patterns post-implant

Pulse generator connectable to all

lead types

May be used with percutaneous and paddle leads;

potential for other anatomical targets including Dorsal Root

Ganglion (DRG) and DBS 70

Multiple studies with consistent results:

CLINICAL EVIDENCE GENERATION CONTINUES TO BUILD

FOR EFFECTIVENESS OF BURST STIMULATION

SCS therapy success increased to more than 90% of patients 1

90% patients who have received both tonic and burst prefer burst stimulation1

Paresthesia was eliminated or reduced in 95% of patients1

Burst SCS reduced Visual Analog Scale (VAS) scores* by 66.7% for tonic non-responders

over 12-month period2

1. Espinet, A. Patients Reporting Moderate-Severe Pain Using Tonic Spinal Cord Stimulation Reported Mild-Moderate Pain Using Burst Stimulation. Presented at WIP Congress, Maastricht,

The Netherlands, April 2014

2. Bara, et. al, First Results of Burst High Frequency Stimulation in Failed FBSS Stimulation Patients: One Year Follow Up, Neuromodulation, 2013

3. VanCamp T. Preliminary outcomes with a new stimulation design: Response comparison and budget impact modelling. Presented at INS Congress, Berlin, Germany, June 2013 and

4. De Ridder et. Al., A Two Center Comparative Study on Tonic Versus Burst Spinal Cord Stimulation: Amount of Responders and Amount of Pain Suppression Clinical Journal of Pain

3-4

*VAS is a validated tool used to evaluate variations in pain intensity. 71

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SUNBURST IDE STUDY

Study Design

Overview Subjects randomized to Burst or tonic stimulation modes in a

crossover study design

Patient Indication

Intractable pain of the trunk and/or limbs

Primary Efficacy

Endpoint

Change in average daily pain (VAS) between Tonic and Burst

Secondary Efficacy

Endpoint

Presence of paresthesia

Quality of Life

Status

First patient enrollment January 2014

Enrollment completed Q4 2014

PMA Submission 2H 2015

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DORSAL ROOT GANGLION (DRG) STIMULATION

DRGs

What is DRG Stimulation Therapy?

DRG resides in the lateral recesses of the

epidural space and houses the primary

sensory neurons

DRG is critical to the development and maintenance of chronic pain

Implant procedure similar to traditional SCS

with access via epidural puncture and

electrode placement at a different target

location

Advantages of DRG Stimulation

Ability to treat pain syndromes that are typically not well served by traditional SCS

Minimal postural effects

Low energy requirements (< 10% vs. traditional)

Focused anatomical targeting

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Sub-dermatomal specificity of DRG stimulation provides a focused stimulation field

often confined to patient’s painful area while avoiding unwanted stimulation.

DRG STIMULATION PROVIDES FOCUSED

ANATOMICAL TARGETING

Patient’s

Pain

Traditional

SCS DRG

Large Area Coverage: Ideal

for larger, pain complaints

such as back or full leg or

arm pain.

Targeted Coverage: Ideal for

more specific, smaller areas

of pain.

Focal: Pain in a specific area

such as foot, knee, groin, hand

or post-surgical location.

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LONG-TERM INTERNATIONAL DATA DEMONSTRATES

DURABILITY OF DRG STIMULATION

Stable, anatomically-specific pain

relief over 12 months1

Targeting of difficult anatomical

areas such as the foot1

Minimal postural effects with stable

pain relief during change of

position2

Stimulation covered painful areas

with minimal extraneous coverage1

Improvements in Quality of Life,

Function and Mood1 2 Kramer J., Liem L., Russo M., Smet I., Van Buyten J.P., Huygen F. 2014. Lack of Body Positional Effects on Paresthesias When

Stimulating the Dorsal Root Ganglion(DRG) in the Treatment of Chronic Pain. Neuromodulation 2014;

1 Liem L, et al. 2014. One-Year Outcomes of Spinal Cord Stimulation of the Dorsal Root Ganglion in the Treatment of Chronic

Neuropathic Pain. Neuromodulation 2014;

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STRONG DRG GROWTH IN INTERNATIONAL MARKETS

Significant adoption in Europe and Australia

DRG expands the range of pain syndromes that can be successfully treated with neurostimulation therapy

Complex regional pain syndrome (CRPS) and peripheral neuropathy market remains greatly underpenetrated (< 2%)

Highest prevalence of all pain syndromes

with lowest SCS success rates

High incidence of post-surgical chronic

pain syndromes $0

$5

$10

$15

$20

$25

$30

2012 2013 2014

YoY Growth ($M)

> 80% YoY

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SPINAL MODULATION* DRG ACCURATE IDE STUDY

Study Design

Overview Subjects randomized to DRG vs. traditional SCS stimulation

(Medtronic (MDT) Restore Ultra/Restore Sensor)

Patient Indication Intractable pain of the lower limbs

Primary Composite

Safety/Efficacy

Endpoint

% patients with > 50% pain relief (VAS) without experiencing

stimulation-induced neurological deficit

Status

First patient enrollment August 2013

Follow-up completed December 2014

Premarket approval (PMA) submission January 2015

Predefined primary composite endpoint successfully met for both

non-inferiority and superiority

*Spinal Modulation, Inc. (SMI) is an independent, privately-held company in which STJ has a minority equity ownership interest along with an

exclusive option to acquire the company. STJ has consolidated the results of SMI as a variable interest entity since Q-2 2013.

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Product Features

Proclaim™ platform for best-in-class primary cell technology

Supported by STJ new external platforms with

Bluetooth™ communication with advanced security

Small size (30 cc) with exceptional longevity (> 8 years)

MRI compatible

Burst-capable for clinical study

Leverages STJ cost structure and economies of scale

Expect submission at time of FDA approval

RAPID INTEGRATION OF DRG STIMULATION INTO NEW

STJ PLATFORMS WILL ACCELERATE MARKET ADOPTION

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RFA

(NeuroTherm™)

Traditional SCS

(Protégé™, Prodigy™,

Proclaim™)

DRG

(SMI AXIUM, Proclaim DRG)

Cervical Spine

Thoracic Spine

Lumbar Spine

Sacroiliac

Knee

Foot

Shoulder

Hip

Failed Back Surgery Syndrome (FBSS )

(back and leg pain)

Trunk

Limbs

CRPS

Extremity

Groin (hernia)

Testicular pain

Post-surgical pain

(i.e. hip, knee, foot, etc.)

Stump pain

UNMATCHED TECHNOLOGY FROM STJ:

TREATING PATIENTS THROUGHOUT THE PAIN CONTINUUM

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SUBHEAD GUIDE SUBHEAD GUIDE MOVEMENT DISORDERS

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STJ POSITIONED TO ACCELERATE DBS GROWTH Under Penetrated

~1% of the market served Stable long term 10%+ market growth

Market dominated by single player

Highly concentrated customer base of primarily

academic-based medical professionals

~90% of patients receive primary cell systems

Opportunity for technology innovation

No innovation while under warning letter

Non-competitive primary cell devices

< 10% ID market share; not approved in US

Infrastructure and customer relationships

established to take share with improved

technology

Market STJ Current Status

US and EU Launch 2H 2015 for Parkinson’s and Essential Tremor Indications

2015 – INNOVATION IN DBS WITH INFINITY PLATFORM

Bluetooth™ wireless communication with advanced security

Bilateral frequency control in single device

Competitive headers for battery replacements

Upgradable software

Thin diameter compatible with current navigation systems

Robust lead design

Low profile extensible extension

iPad mini™, off-the-shelf technology

Bluetooth™ communications with robust security

Data export to support research needs

Responsive to the user, optimizing programming time

iPod touch™, off-the-shelf technology

Large color intuitive interface

Bluetooth™ wireless communication featuring robust security

Bold = industry first Pulse Generators

Leads and Extensions

Clinician Programmers

Patient Programmers

Apple, iPod touch and iPad mini are trademarks of Apple Inc. Bluetooth is a trademark of Bluetooth SIG, Inc.

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DIRECTIONAL DBS LEAD ─ IMPROVED CONTROL OF

STIMULATION FIELD FOR FOCAL ANATOMICAL TARGETING

Small anatomical target structures require

precise stimulation for effective therapy while

avoiding unwanted side effects

Potential advantages over traditional DBS leads:

Reduced stimulation-causing side effects

Decreased power requirements leading to

improved device longevity

Reduced unnecessary reoperation due to lead

misplacement or migration

May enable asleep lead placement

EU: Launch 2H 2015

US: Submission 2H 2015

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Warning letter is fully resolved with implementation of a strengthened quality system

We are leveraging technologies from CRM to strengthen our innovation pathway

In 2015, we will return to innovation leadership launching differentiating new platforms across all product lines

We offer an unmatched portfolio of solutions for Chronic Pain that improves therapy effectiveness and patient ease-of-use

DRG stimulation represents a large opportunity for growth from share capture and market expansion

We will have a very competitive DBS platform with innovative features that will allow us to capture meaningful share in the Movement Disorder space

We have a full product pipeline for future growth

NEUROMODULATION SUMMARY: RETURN TO GROWTH

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BIG THOUGHT GUIDE BIG THOUGHT GUIDE

PANEL AND Q&A

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STJ important dates in 2015:

Q1 2015 Earnings Results Conference Call April 22, 2015

Q2 2015 Earnings Results Conference Call July 22, 2015

Q3 2015 Earnings Results Conference Call October 21, 2015

BREAK

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NEW ABLATION SYSTEMS

ARE ANOTHER CATALYST

FOR 2015 Joel Becker, President, Americas Division

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2015 ESTIMATED WORLDWIDE EP MARKET SIZE

Revenue in Millions AR; Growth CN

EP Ablation $1,140 34%

EP Diagnostic $690 20%

EP Mapping and Recording Systems

$540 16%

Access $390 11%

ICE/Other $260 8%

ILR $380 11%

2015 Market Revenue $3.4B

Market Growth: ~11%

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EP ABLATION MARKET IS ~75% IRRIGATED/ADVANCED

ABLATION

$0

$200

$400

$600

$800

$1,000

$1,200

US WW

Standard Irrigated/Advanced

$1,140

$560

Revenue in Millions

US Catheter Ablation

Procedures estimated to be ~250K in 2015

Market revenue growing at 15% (’12-’15 CAGR)

STJ Market share growth from 11-17% (2014-’15)

2015 Catheter Ablation Market Size

WW Catheter Ablation

Procedures estimated to be > 990K in 2015

Market revenue growing at 13% (’12-’15 CAGR)

STJ Market share growth from 16-21% (2014-’15)

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-

200,000

400,000

600,000

800,000

1,000,000

2012 2013 2014 2015

All Other SVT AF VT

20.0% 20.9% 21.1%

10.9%

9.8%

9.7%

4.3% 3.5% 3.3%

(Sources: MRG, EHRI, Truven Health Analytics, STJ estimates)

HEALTHY BASE OF SVT PROCEDURES, WITH ATRIAL

FIBRILLATION BEING THE FASTEST GROWING

ABLATION SEGMENT Growth in WW Catheter Ablation Procedures

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GROWTH IN US CATHETER ABLATION PROCEDURES

-

50,000

100,000

150,000

200,000

250,000

300,000

2012 2013 2014 2015

All Other SVT AF VT

17.6% 17.7% 17.2%

-0.7% -0.7% -1.1%

9.3%

7.5% 7.4%

(Sources: MRG,Truven Health Analytics, STJ estimates)

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EP ABLATION MARKET DYNAMICS

AF procedures drive growth in total catheter ablation procedures

Growing adoption of contact force technologies for AF ablations globally

Clinical evidence and adoption of technologies from Key Opinion Leaders globally

STJ ’s TactiCath™ contact force ablation catheter (second generation platform)

commercially available in US and EU

Interest in mapping atrial substrates for patients with persistent AFs

VT procedures emerging with high KOL interest

STAR-VT multi-centered prospective trial to address VT initiated

Procedure reimbursement is in place for major markets

STJ poised for growth

Integrated product portfolio including diagnostic, imaging and mapping technologies

Advanced ablation catheter platforms

Proven clinical results

Dedicated distribution channel, current customer base

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TactiCathTM

contact force ablation catheter

FlexAbilityTM

irrigated ablation catheter

AmpereTM

RF generator

Cool PointTM

irrigation pump

WorkMate ClarisTM

recording system

EnSite VelocityTM

mapping system

MediGuideTM

guidance system

VantageViewTM

HD display

Agilis™ NxT

steerable introducers

SwartzTM

guiding introducers

BRKTM

transseptal needles

Access and Guidance

INTEGRATED EP PRODUCT PORTFOLIO

Advanced Ablation Recording Mapping

and Navigation Diagnostics and

Visualization

ViewFlexTM/ViewMateTM

intracardiac ultrasound console

Reflexion™

spiral variable radius mapping

catheters

LiveWireTM /InquiryTM

steerable electrophysiology

catheters

ResponseTM/SupremeTM

fixed diagnostic catheters

Complete Ablation Solution

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1. Neuzil P, Reddy VY, Kautzner J, et al. Electrical reconnection after pulmonary vein isolation is contingent on contact force during initial treatment: Results from the EFFICAS I study. Circ Arrhythm Electrophysiol.

2013;6(2):327-33.

2. Reddy VY, Shah D, Kautzner J, et al.; The relationship between contact force and clinical outcome during radiofrequency catheter ablation of atrial fibrillation in the TOCCATA study. Heart Rhythm. 2012 Nov;9(11):1789-95.

3. Neuzil P, Wissner E, Kautzner J, et al. EFFICAS II Results: Contact Force, FTI, Lesion Continuity Roles at PVI. Cardiostim,June 2012, Nice, France.

4. Development report number 90168493, on file based on Therapy™ Cool Flex™ Ablation Catheter Tip.

5. St. Jude Medical. Data on File. Report 90122753, on file - Based on Therapy™ Cool Flex™ Ablation Catheter Tip.

6. Guerra, J. M. et al., (2013). Effects of open-irrigated radiofrequency ablation catheter design on lesion formation and complications: in vitro comparison of 6 different devices. Journal of Cardiovascular Electrophysiology,

24, 1157-1162. Criteria for “like no other” includes differentiated ablation technology characteristics: TactiCath™ Quartz: Optical (white light interferometry) sensor

technology, sampling rate of 50Hz (20ms), automatic reset for baseline management. FlexAbility™: IP for flexible tip, STJ market information

regarding WW approvals of a flexible tip to perform RF ablation.

Two unique catheters that offer innovative solutions designed to ensure clinical outcomes1-3, efficient

procedures and more productive EP labs.4-6

STJ OFFERS AN ADVANCED IRRIGATION CATHETER

PORTFOLIO LIKE NO OTHER

FlexAbility™ ablation catheter

has a unique flexible tip for effective

lesion formation, with optimal

handling for non-contact

force cases.

TactiCath™ Quartz

ablation catheter

pioneering technology in contact

force for the treatment of

paroxysmal atrial fibrillation.

AmpereTM RF

generator

is designed to provide more

physician control, and higher

procedure efficiency.

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TACTICATH™ QUARTZ ABLATION CATHETER

Pioneering technology in contact force that provides

accurate, reliable readings for the treatment of

paroxysmal atrial fibrillation

Strong clinical evidence to support contact force

TOCCATA, EFFICAS I, EFFICAS II, TOCCASTAR

Real time contact force readings in any

catheter position

Fiber optic sensing for accurate, reliable

measurement

Fast sampling rate for efficient workflow

No need for recalibration

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TOCCASTAR results continue the TactiCath™ legacy with clinical evidence supporting force

CONTACT FORCE A NEW STANDARD OF CARE IN

AF ABLATION

85.5%

67.7%

1. Optimal CF cohort defined as those patients where ≥ 90% lesions ≥10g

2. Non-optimal CF cohort defined as those patients where < 90% lesions ≥10g

3. Per protocol cohort.

Optimal CF1 vs. Non-optimal CF2 Clinically Relevant

Success at 12 months

Outcomes are improved when minimum

contact force recommendations of 10 grams

are followed

70% lower rate of repeat ablation when

optimal CF force is used vs. non-optimal CF

(p-value = 0.02)

Deflectable sheath use (Agilis™) improved

protocol defined treatment success vs. fixed

curve sheath (74% vs. 62.7%)3

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US TACTICATH™ QUARTZ CATHETER LAUNCH SUCCESS

FDA approval for Paroxysmal Atrial Fibrillation

indication on October 27, 2014

Momentum continues to build with > 250 active

TactiCath™ Quartz catheter accounts globally

Success stories coming in across all regions

Dedicated field resources to drive US market

penetration

US Launch

US TaciCathTM Weekly Sales Performance

“Contact force is becoming the standard of care in ablation. The TactiCath system is unique in the

large amount of clinical data indicating its effectiveness.“

- Dr Vivek Reddy

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FLEXABILITY™ ABLATION CATHETER FDA APPROVAL

FDA approval for Atrial Flutter indication on January 23, 2015

Japanese reimbursement received ahead of schedule, effective

February 1, 2015

WW adoption of new flexible tip ablation platform, including Ampere™

generator has been positive

Flex tip accounted for a > 40% increase in revenue in first year of

launch in ID regions (2011)

Designed with feedback from > 40 KOLs around the globe

Unique flexible tip: Effective lesion formation with potentially fewer risks

Next-generation shaft technology: Reliability, accuracy and consistent

performance

Advanced handle-shaft combination: Maneuverability with comfort and

ease of use

Better signal quality for substrate based persistent AF and VT ablation

“The FlexAbility catheter brings technical and functional advancements to the EP lab through its unique

catheter tip and excellent handling capabilities. The catheter represents an important option for

electrophysiologists that are looking to broaden their ability to treat arrhythmias with increased confidence.”

- Dr . Andrea Natale

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WE PLAN TO LAUNCH A NEXT GENERATION ENSITE

VELOCITYTM MAPPING SYSTEM

We are not disclosing complete details for competitive reasons

Key components of the Next Generation System will include:

Robust high definition cardiac models (software)

High density automatic data acquisition combining force

sensing and physiologic parameters (software)

Next generation catheter tool integration

Key benefits of the Next Generation System:

Designed for improved workflow and efficiency

Enables high density electroanatomic maps are necessary to

enable substrate based mapping and therapy guidance

Designed to include more precise clinical diagnostic indices

Commercialization 2H 2015

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STAR-VT IDE STUDY

Prospective, multi-center, randomized study using the FlexAbility™ catheter

Staged enrollment of ~1,450 patients at 50 U.S. centers and additional qualified

international centers

Patients with a new ICD or a CRT-D and at high-risk of ICD shock due to monomorphic VT

will be randomized 1:1 to either adjunctive treatment (ablation therapy) or control (routine

drug therapy) groups

First patient enrolled December 2014

Substrate Targeted Ablation using the FlexAbility™ ablation catheter system for the Reduction of

Ventricular Tachycardia (STAR-VT)

Participating centers in the U.S. are the most

advanced ablation sites

National PIs:

Dr. Andrea Natale

Dr. Frank Marchlinski

Prestigious centers include:

Mayo Clinic, MGH, Duke, UCLA, Loyola, UAB,

Washington Hospital, Emory, NYU, Mount Sinai (NY),

Johns Hopkins, UPenn, Vanderbilt, Sanger Clinic,

UCSF, Barnes Jewish, Texas Cardiac

"CAUTION - Investigational Device. Limited by Federal

(or United States) law to investigational use."

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EP PORTFOLIO IS A CATALYST FOR GROWTH IN 2015

Global AF product sales increased 11% on a constant currency basis for

full year 2014

We expect growth from AF product sales to accelerate on a constant

currency basis for full year 2015 due to the launch of our FlexAbility™

irrigated ablation catheter and TactiCath™ contact force ablation

catheter lines

US ablation catheter sales grew 63% in Q4 2014

We expect to exit 2015 with a next generation EnSite™ Velocity™

cardiac mapping system platform and a robust pipeline of new products

ready to help us sustain the superior growth of our EP portfolio in 2016

and beyond

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HIGHLIGHTS OF OUR CRM

AND CV BUSINESSES Eric Fain, M.D., Group President

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SUBHEAD GUIDE SUBHEAD GUIDE CARDIAC RHYTHM MANAGEMENT

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2015 WW CRM MARKET DYNAMICS

Similar to 2014, expect the 2015 global Cardiac Rhythm Management

(CRM) market to be flat to down 2% versus 2014 on a constant

currency (CC) basis

We expect our 2015 CRM revenue to roughly track with the WW market

on a CC basis

Our model assumes a CRM market of approximately $10-10.5B on a

constant currency basis in 2015

Low, single-digit unit growth offset by pricing pressure

MRI TECHNOLOGY EVOLUTION HAS COME FULL CIRCLE Less focus on new technology as new testing methods and standards demonstrate older

CRM products are MRI compatible

MRI Ready System

Evolution

2008 CRM products are NOT

considered MRI compatible

New technology needed

Tendril MRI™ lead

New global test standards and

methods emerge, ISO technical

specification 10974 published in 2012

Magnasafe* data of 1500 pts has

demonstrated that special

devices and leads were

unnecessary in non-thoracic

scans

IsoFlex™ Optim™ leads

Tendril ™ STS lead

Special MRI leads and

pacemakers introduced with

restricted scanning labelling

2015 CRM products are considered

MRI compatible based on testing

New technology NOT needed

Labelling expanded to

include full body

CRM Manufacturers get approval

for MRI scanning with standard

leads and devices

Pacing

107

*Caution - INVESTIGATIONAL DEVICE, LIMITED BY FEDERAL (OR UNITED STATES) LAW TO INVESTIGATIONAL USE.

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MRI labeling a more significant driver of device

choice in Japan vs. rest of world

Historically share is temporarily “borrowed”

when one competitor has MRI labelling

No real differentiation within the MRI category

No new HV technology for MRI labelling – will

leverage our existing Ellipse™ and Assura™

ICDs and Durata™/Optisure™ leads

Upon approval, previously implanted ICD

systems will be labeled for MRI scanning

Published HV data shows strong performance

of STJ ICD systems in MRI testing

MRI LANDSCAPE IN JAPAN – PACEMAKER EXPERIENCE

1H'12 2H'12 1H'13 2H'13 1H'14 2H'14

Pac

emak

er M

arke

t Sha

re

Impact of MRI Pacemaker Labeling

on STJ Share in Japan

Competitive

MRI PM launch

STJ MRI PM

launch

*Q.Wang, S.Feng, C. Wen, J.Chen Magnetic resonance imaging-induced radiofrequency heating of implantable cardioverter-defibrillator leads. XVI

International Symposium on Progress in Clinical Pacing, Rome 2014

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MRI LABELED NEW PRODUCTS IN ALL SEGMENTS IN 2015

Low Voltage High Voltage CRT

Tendril™ MRI lead

Assurity™ MRI Endurity™ MRI

Ellipse™ ICD

Durata™ and Optisure™ leads

Fortify Assura™ ICD

Quadra Assura™ CRT-D

Quadra Assura™ MP

CRT-D

Allure Quadra™ CRT-P

Quartet™ Leads

EU: Launched

Japan: Submitted 2H 2014

US: Submitted 2H 2014

EU: Launch 1H 2015

Japan: Submit 1H 2015

US: Submit 1H 2015 (IDE)

EU: Submit 2H 2015

Japan: Submit 2H 2015

US: Submit 2H 2015 (IDE)

Tendril™ STS lead

IsoFlex™ Optim™

leads

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New platform of smaller, longer lasting MRI compatible pacemakers

Significant cost reduction over Accent MRI

Multiple models to compete successfully across price tiers

ASSURITY™ AND ENDURITY™ MRI PACEMAKERS

Driving continued share capture and margin improvement with the world’s smallest,

longest lasting wireless MRI pacemakers

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Have completed > 500 Nanostim™ implants worldwide

Completed enrollment/implantation of population needed for PMA submission

(minimum 300 patients) in the LEADLESS II IDE Study in 2H 2014

PMA submission anticipated 2H 2015

We are in the process of reviewing data from our European Post-Market Clinical

Follow-up Study with our Notified body and lead Competent Authority to evaluate

and confirm effectiveness of corrective actions put in place last summer

In the meantime, we are holding off additional implants in Europe until the review

is completed

MRI compatibility testing successfully completed

Dual chamber development continues to make good progress

Dual chamber pacemakers represent > 70% of worldwide pacing market

NANOSTIMTM LEADLESS PACEMAKER*

*Caution - INVESTIGATIONAL DEVICE, LIMITED BY FEDERAL (OR UNITED STATES) LAW TO INVESTIGATIONAL USE.

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STJ QUADRA ASSURA™ CRT-D SYSTEM FIRST IN QUADRIPOLAR

US CRT-D market share

With new competitor entry, expect share to

follow similar trajectory of recovery as it did

internationally after initial trialing

CardioMEMS™ and MultiPoint™ pacing will

provide competitive differentiation going

forward

STJ pioneered the standard in quadripolar

More than 100,000 implants worldwide

100+ publications with strong evidence for improved clinical

outcomes and economic benefit

Physician feedback indicates preference for STJ Quartet™ LV

lead handling

CR

TD

Mar

ket S

hare

STJ CRT-D Share in EMEA

Competitive

Quadripolar

Launch

STJ MPP

Launch

2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4

STJ CRM/CARDIOMEMS™ HF SYSTEM COMBINATION PROVIDES MORE COMPLETE

HF DIAGNOSTICS STJ ICD/CRT-D with CardioMEMS™ Competitor ICD/CRT-D with CardioMEMS™

Only use of STJ CRM devices provide:

Time based alignment and integration of CMEMS

PAP data and STJ ICD/CRT device diagnostics

(including VT/VF, AT/AF, Activity, Heart Rate

and % pacing)

Improved clinic workflow and efficiency; need to

visit only one website and view one report

Provides clinical and efficiency reasons to select

STJ device at the time of box change

Expect to launch 1H 2015

113

1. Ypenburg C, van Bommel RJ, Borleffs CJ, et al. Long-term prognosis after cardiac resynchronization therapy is related to the extent of left ventricular reverse remodeling atmidterm follow-up. J Am Coll Cardiol. 2009;53(6):483-90.

2. Rinaldi et al. Acute hemodynamic benefits of multisite LV pacing in CRT recipients. Abstract ACC 2012

3. Thibault et al. Acute haemodynamic comparison of multisite and biventricular pacing with a quadripolar LV lead. Europace 2013 ;15:984-991

4. Pappone et al. Multipoint LV pacing improves acute hemodynamic response assessed with pressure-volume loops in CRT patients. Heart Rhythm 2014;11(3):394-401

5. Rinaldi et al. Acute effects of multisite LV pacing on mechanical dyssynchrony in patients receiving CRT. J Cardiac Failure 2013;19:731-738

6. Pappone, et al. Multipoint left ventricular pacing in a single coronary sinus branch improves 12-month response to cardiac resynchronization therapy. ESC 2014 (abstract).

7. Cuko et al. Multipoint LV pacing provides additional echo benefit to responders and non-responders to CRT. XVI International Symposium on Progress in Clinical Pacing 2014

8. Pappone C, et al. Improvement in 3-month echocardiographic response with multisite left ventricular pacing in cardiac resynchronization therapy patients. HRS 2013 Postersession PO02. May 9, 2013.

MULTIPOINT™ PACING EXCLUSIVE APPROACH TO IMPROVING PATIENT RESPONSE TO CRT THERAPY

Meeting an important unmet clinical need Many CRT patients do not respond to CRT therapy1

Non-responders cannot be identified at time of implant

MultiPoint™ pacing Exclusive STJ solution

Non-invasive toolset using STJ quadripolar technology

Improved responder rate should translate into economic

benefit

Clinical evidence for MPP continues to build Improved acute hemodynamics2,3,4,5

RCT demonstrated sustained chronic improvement at

12 months with a 19% absolute increase in responder

rates and 44% reduction in non-responder rate6

Commercial and Clinical Status Majority of STJ quadripolar devices sold in Europe are now MultiPoint™ pacing devices with an

increase in ASP

US IDE enrollment completed 2H 2014

Expect FDA submission 2H 2015

114

QUADRA ALLURE™ CRT-P LEADERSHIP IN FASTEST GROWING CRM SEGMENT

Strong demand driving double digit share

capture in fastest growing CRM segment

Exited 2014 with > 50% US de novo share

Continued clinical evidence leading to market

growth, appealing to pacer implanters who

begin implanting CRT-P

U.S. Centers for Medicare and Medicaid

Services (CMS) reimbursement increased

55% effective January 1, 2015

Significant competitive advantage with

quadripolar technology and now MultiPoint™

pacing available (International)

Leverages new low voltage platform for

improved cost structure, longevity and size

$200

$300

$400

2012 2013 2014 2015$M

M

Estimated CRT-P Market Revenue

WW Market Size

8% CAGR

115

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SUMMARY OF CRM HIGHLIGHTS FOR 2015

The global CRM market has mostly stabilized

We will have new MRI labeled device submissions and launches across

all CRM product segments

We continue to strengthen and grow our low voltage product portfolio

We continue to be the leaders in Quadripolar technology with

MultiPoint™ pacing, Quadra Allure MP™ CRT-P and product synergies

with CardioMEMS™ HF System

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SUBHEAD GUIDE SUBHEAD GUIDE CARDIOVASCULAR

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$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2014 2015 2016 2017 2018 2019

WW

Mar

ket R

even

ue (

$M)

2% of the population ages 65 or older

have moderate to severe aortic stenosis

6 million people worldwide suffer

from severe aortic stenosis

(diagnosed prevalence)

Expectation that intermediate risk patients

will be treated with TAVR technology

Without treatment, half of symptomatic

aortic stenosis patients will die within

2 years

WW TAVR Market

*Projected

GROWING WORLDWIDE TAVR MARKET OPPORTUNITY

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PORTICO™ VALVE ADVANCED FEATURES

*All sizes remain investigational in the U.S. and not available for sale. Sizes 27 and 29 remain investigational in EU and not for sale.

Non-flared annulus section of

stent frame and optimal valve

height designed to mitigate

conduction disturbances

Bovine pericardium leaflets

with porcine pericardium

sealing cuff to reduce PV leak

23, 25, 27 and 29 mm sizes*

Large cell geometry allows

tissue to conform around calcific

nodules to minimize PV leak

Portico™ TAVR technology contains key product features desired in latest generation devices.

Multiple access sites:

transfemoral, transaortic,

subclavian and

transapical

Unique Nitinol properties allows valve

to be fully repositioned and

retrieved in situ until fully

deployed for accurate placement

PORTICO™ PERFORMANCE COMPARES FAVORABLY

WITH LATEST GENERATION DEVICES

30-Day Results*

Portico™1

N=103

CoreValve™2

(US Pivotal

Extreme Risk)

N=471

Sapien™ XT3

(PARTNER II)

N=276

Sapien™ 4

N=96

Direct Flow™5

N=100

Lotus™ Valve6

N=120

Death 2.9% 7.9% 3.5% 2.1% 1.3% 4.2%

Stroke

(Disabling) 2.9% 2.4% 3.2% 0.0% 4.0% 1.7%

New Pacemaker 9.7% 22.2% 6.4% 12.5% 17.0% 28.6%

MI 1.9% 1.3% 1.8% 2.1% 1.3% 3.3%

Major Vascular

Complications 5.8% 8.3% 9.6% 5.2% 2.7% 2.5%

Disabling Bleeding 3.9% 11.7% 7.8% 2.1% 2.7% 5.0%

Mean Gradient 8.8 mmHg 8.5 mmHg 10 mmHg 10.7 mmHg 12.5 mmHg 11.5 mmHg

PVL (Mod/Severe) 4.0% 11.5% 24.2% 2.6% 2.0% 1.0%

*Trials are not head-to-head comparisons but reflect individual studies

1. Manoharan, G. Portico CE Trial Assessment of the St. Jude Medical Portico™ Transcatheter Aortic Valve Implant and the Transfemoral Delivery System. TCT 2014.

2. Popma J. CoreValve US Pivotal Extreme Risk Iliofemoral Study Results. TCT 2013.

3. Leon, M. A Randomized Evaluation of the SAPIEN XT in Patients with AS Who Are Not Candidates for Surgery: PARTNER II, Inoperable Cohort, ACC 2013.

4. Webb, J. 30-Day Outcomes from the Sapien 3 Trial. EuroPCR May 2014. Results for TF cohort.

5. Shofer, J. Prospective, multicenter evaluation of the Direct Flow Medical transcatheter aortic valve: the DISCOVER trial 6-month follow-up. TCT 2013.

6. Meredith I. REPRISE II: A Prospective Registry Study of Transcatheter Aortic Valve Replacement with a Repositionable Transcatheter Heart Valve in Patients with Severe Aortic Stenosis. TCT 2013.

Sapien 3 and Sapien XT are trademarks of Edwards Lifesciences Corporation. CoreValve is a trademark of Medtronic CV Luxembourg S.A.R.L. Lotus is a trademark of Boston Scientific Corporation. Direct Flow is a

trademark of Direct Flow Medical.

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CONTENT GUIDE CONTENT GUIDE

DESCRIPTION DESCRIPTION

PICTURE GUIDE PICTURE GUIDE

PICTURE GUIDE PICTURE GUIDE


FDA discussions ongoing

Resumption of US IDE Study:

Expected 1H 2015

Complete activation of all 40 US IDE

sites: Expected 2H 2015

Expect return to rapid enrollment

upon restart

Resumption of 27/29 mm CE mark studies: 1H 2015

Resumption of commercial 23/25 mm implants in OUS markets: Expected 1H 2015

Commercial availability of full range of transfemoral sizes 23/25/27/29 mm: Expected 2H 2015

US ACTIVITIES

INTERNATIONAL ACTIVITIES

PORTICO™ FOCUS IN 2015

Monthly US IDE Enrollment Prior to Pause

0

10

20

30

40

50

60

May June July August

Enrolling Sites: 2 3 4 10

Pat

ient

s pe

r M

onth

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PHOTO 1/2

PHOTO 1/2

Strong international adoption of LAA Occlusion continues

STJ grew faster than the market in 2014

Recently improved reimbursement in European markets

STJ strength with EP and IC physicians is well suited to

LAA Occlusion

Next generation AMULET™ improves upon an already

successful AMPLATZER™ Cardiac Plug (ACP)

Enhanced delivery system and workflow (pre-loaded)

Addresses a broader range of patient anatomies

Full launch underway 1H 2015 in Europe and Australia

Positive feedback and strong product adoption

at launch

Awaiting FDA decision on competitor’s device to decide

on US strategy

AMPLATZER™ AMULET™ BUILDS UPON THE AMPLATZER™

CARDIAC PLUG SUCCESS

*2015 Projected

$0

$30

$60

$90

2011 2012 2013 2014 2015*

OU

S M

ark

et R

evenue (

$M

)

LAA Occlusion Market – International

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FFR MARKET IS UNDERPENETRATED AND GROWING STJ is the WW market leader

FFR market remains underpenetrated

Wireless PressureWire™ FFR is the gold

standard

For physicians that stage with resting indices,

Pd/Pa allows for an adenosine-free option that is

at least as accurate as other resting indices

New Pd/Pa software upgrade available 1H 2015

*2015 Projected

$0

$200

$400

2011 2012 2013 2014 2015*

WW FFR Market

WW

Mar

ket

Rev

enu

e ($

M)

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OCT MARKET IS UNDERPENETRATED AND GROWING

STJ is the WW market leader

OCT Market continues to see strong growth at

the expense of intravascular ultrasound (IVUS)

New Dragonfly™ OPTIS™ imaging catheter for

enhanced workflow

Redesigned tip for improved tracking

Continuous calibration for reduced procedural

time

US, EU, Japan launch: 1H 2015

*2015 Projected

$0

$50

$100

$150

2011 2012 2013 2014 2015*

WW OCT Market

WW

Mar

ket

Rev

enu

e ($

M)

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OPTIS™ INTEGRATED SYSTEM:

FFR AND OCT WITH REAL-TIME ANGIO CO-REGISTRATION

FFR and OCT are now “always there and always

on” …built into the cath lab angiography system Real-time co-registration of

OCT and Angio image

Supports both OCT and FFR in

a single system

Identifies important vessel

characteristics that cannot be

seen with Angio or IVUS

US, EU launch: 1H 2015

Japan launch: 2H 2015

“With Optis Integrated, I know, without

question, exactly where I am and what

I am looking at…”

- Interventional Cardiologist

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CV SUMMARY

STJ has invested in the segments of the Cardiovascular space that are

expected to show strong double digit growth for a number of years:

TAVR – Portico™

LAA Occlusion – Amplatzer™ Amulet™

FFR – PressureWire™

OCT – OPTIS™ integrated system with Dragonfly™ OPTIS™ catheters

Hemodynamic Monitoring for HF – CardioMEMS™

Our innovative product portfolio provides improved workflow, decreased

overall costs and improved patient outcomes

We expect that our cardiovascular business will continue to grow at a high

single digit or low double digit rate in 2015

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PANEL AND Q&A

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THIS CONCLUDES OUR MEETING. THANK YOU FOR YOUR CONTINUED

INTEREST IN ST. JUDE MEDICAL.

st. jude medical 2015 investor...

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