Muddy Waters Capital is short St. Jude Medical, Inc. (STJ US). There is a strong possibility that close to half of STJ’s revenue is about to disappear for approximately two years. STJ’s pacemakers, ICDs, and CRTs might – and in our view, should – be recalled and remediated. (These devices collectively were 46% of STJ’s 2015 revenue.) Based on conversations with industry experts, we estimate remediation would take at least two years. Even lacking a recall, the product safety issues we present in this report offer unnecessary health risks and should receive serious notice among hospitals, physicians and cardiac patients.

This past Friday, STJ published a response to the report MWC issued the day before. STJ’s response contained very little substance, and actually included admissions to several key points. There are no changes to MedSec or our conclusions about the lack of security in the STJ device ecosystem, and our belief in the need for recall and remediation. There were two components to STJ’s response: substance (~20%) and fluff (~80%).

After vehemently denying its devices suffer security vulnerabilities and then suing us, St. Jude issued a statement today that effectively vindicates the research published by MedSec and Muddy Waters. This long-overdue acknowledgement, just days after completion of St. Jude’s sale to Abbott Laboratories, reaffirms our belief that the company puts profits over patients. It also reaffirms our belief that had we not gone public, St. Jude would not have remediated the vulnerabilities. Regardless, the announced fixes do not appear to address many of the larger problems, including the existence of a universal code that could allow hackers to control the implants.