* Cardiologist Hauser releases report on defibrillator leads
* Finds new technology does not prevent insulation problems
* Says one death reported in patient with Riata ST Optim
* Investors had braced for study, shares barely higher
By Toni Clarke
Aug 21 (Reuters) - Changes that St. Jude Medical Inc made to its heart defibrillator leads do not protect against insulation defects that could potentially lead to device failure and death, according to a report published online on Tuesday in the medical journal Europace.
The report, by prominent cardiologist Robert Hauser of the Minneapolis Heart Institute, found that St. Jude's Riata ST Optim and its newer Durata ICD leads had sometimes failed due to insulation problems.
Leads transmit electricity to the heart from the implantable defibrillator, which is designed to deliver a life-saving shock if it detects a dangerous cardiac rhythm.
Hauser's report concluded that his findings were "new and unexpected." Additional studies are needed to determine the incidence of these failures and their clinical implications, the report said.
Still, the report, which was expected by investors, did not reveal as many problems as some had anticipated, and St. Jude's shares rose as much as 1.8 percent in Tuesday trading but later trimmed those gains to be barely higher.
"The good news is that the anticipation of this article is behind us and although not a glowing report (frankly, it never was going to be) it is not horrible, in our opinion," said Joanne K. Wuensch, an analyst at BMO Capital Markets, in a research report.
St. Jude's shares have been depressed for months amid concerns the newer models might also have to be withdrawn.
Last week, the FDA said the Durata leads should be the subject of surveillance studies, sending the company's shares down more than 4 percent.
The newer leads are coated with a material that St. Jude hoped would reduce the risk of insulation abrasions. According to Hauser, that may not be the case.
"The results of this study suggest that Optim, a proprietary copolymer of silicone and polyurethane, does not prevent critical insulation failures in Riata ST Optim and Durata leads that are caused by friction with the can or another device," he said.
Of equal concern, he said, is the fact that these failures occurred in leads that had only been implanted for four years or less.
St. Jude said in a statement: "We have only just accessed the online manuscript and are reviewing the information. We welcome ongoing discussion and research about the performance of our products, and believe it is important to consider all of the available information to understand the clinical performance of a device. To date, the accumulation of data continues to support the overall safety and reliability of our Durata leads."
Last year St. Jude recalled its older-model Riata defibrillator leads amid reports that the silicone coating around the wires eroded at a higher-than-expected rate.
An article by Hauser published in medical journal HeartRhythm linked the leads to 20 patient deaths.
Hauser and his team searched a database held by the U.S. Food and Drug Administration, which records adverse events associated with a medical device.
The search returned 15 reports for the Riata ST Optim and 37 reports for the Durata leads, which were submitted by St. Jude based on its analyses of returned leads related to clinical events that occurred between December 2007 and January 2012.
Four abrasions associated with the Riata ST Optim lead resulted in high-voltage failures and one death. There were no deaths associated with the Durata lead.
Hauser said most of the insulation defects were outside-in abrasions, or those caused by contact with another device or part of the body. The Optim coating did not provide the abrasion resistance for which it is intended, he said.
However, he said one Riata ST Optim lead failure and three Durata lead failures were internal abrasions, which appear to be similar to the type of abrasions that were reported with the older, withdrawn leads.
St. Jude said in June that an internal investigation showed that damage to one of its Durata defibrillator leads was not caused by the same type of abrasion which forced the recall of the Riata products.
St. Jude said that data from its own surveillance indicates that "the overall performance and high reliability of the Durata lead is comparable to other defibrillation leads on the market."
St. Jude's shares were up five cents, or 0.1 percent, to $38.22 in late morning trading on the New York Stock Exchange. Earlier they rose as high as $38.87.