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Three big medical-device makers have moved a step closer to expanding their sales of products that treat potentially fatal rapid heart beats. But shares of these companies --







St. Jude Medical


-- appear to already have absorbed most of the anticipated benefits.

The companies received an expected boost late Wednesday afternoon, after markets had closed, when the

New England Journal of Medicine

released a study showing that implantable cardioverter defibrillators, or ICDs, reduce heart-failure death by 23%. The medical journal article contains information that was announced in March by the National Institutes of Health on the potential benefits of ICDs.

That study of more than 2,500 people prompted the agency administering Medicare to issue

new preliminary guidelines in late September that would expand the government's payment for ICDs to more patients. Final regulations are expected to be issued by the end of the month. The government's decision could expand the pool of potential Medicare recipients by one-third to nearly 500,000 people for the surgically implanted ICD that delivers electrical shocks to control rapid heartbeats.

"This is a home run for the cardiac rhythm management industry," said a Thursday report by First Albany Capital. "Our ICD estimates and those of the consensus likely will come up over time."

First Albany predicts the final Medicare rules will be essentially the same as the preliminary guidelines issued in September. "We reiterate our view that this is the most important catalyst for the cardiac rhythm management industry," the firm said.

The medical journal article adds an extra dose of credibility to

the NIH study, which had been praised by researchers and analysts for its size and scope. Top Medicare officials wrote a companion editorial in the journal noting that Medicare recipients now account for 80% of sudden cardiac death and that the new Medicare regulations will expand Medicare coverage "substantially."

Shares of Medtronic, which provided the ICDs for the NIH study, gained 69 cents, or 1.4%, to $51.76. Medtronic is the market leader in ICDs. Shares of Guidant lost 22 cents, or 0.3%, to $71.28. Guidant has traded in a very narrow range since Dec. 16, when

Johnson & Johnson


said it was buying the company. Shares of St. Jude rose 16 cents, or 0.4%, to $38.83.