St. Jude Medical Inc. (STJ) on Friday backed its long-term earnings growth outlook while detailing for the first time its interest in the market for replacement heart valves that don't require major surgery.

The so-called transcatheter valves, which can be threaded into place through arteries, are a key new product and growth driver for Edwards Lifesciences Corp. (EW). The valves also have attracted the attention of medical-device heavyweights Medtronic Inc. (MDT) and Johnson & Johnson (JNJ).

Those companies have said that they are pursuing the market. St. Jude, which already competes with Edwards in the market for valves that require more significant surgery, is also entering the fray.

"We've been busy this year" expanding investment in that area, said Daniel J. Starks, St. Jude's chairman and chief executive, speaking at the company's annual investor conference.

He also reiterated the St. Paul, Minn., company's goal for expanding per-share earnings at a minimum 15% compound annual growth rate. The company, where implanted pacemaker and defibrillator heart devices are the biggest business, also targets double-digit sales growth.

St. Jude's shares were recently trading 4 cents lower at $37.16.

St. Jude has completed initial animal work studying transcatheter valves and plans its first clinical implants to study the devices in humans late next year, using one type of delivery approach. First implants with another type of delivery approach are anticipated in late 2011, and market introduction is several years away.

European approval for one delivery approach could come in mid 2012, and approval for the other approach could come in 2013, said Frank J. Callaghan, president of St. Jude's cardiovascular division. He the company isn't ready yet to give guidance regarding potential U.S. approval - accessing the U.S. often comes after Europe due to requirements for bigger studies.

Despite the long wait, transcatheter valves are generating some enthusiasm in a medical-devices sector where major markets are showing their age and there is high interest in new growth drivers. Edwards is one of few device makers that actually saw its stock price rise last year amid brutal broader market conditions as early sales of its transcatheter valve exceeded expectations.

Edwards' "Sapien" valve, available in Europe so far, garnered sales of $53 million last year, and the company has projected sales of $75 million to $95 million in 2009. A private company called CoreValve is already competing with Edwards in Europe, but Edwards believes it has a long head start in its push toward the U.S. market. Its major U.S. study is rolling along.

Sapien is a replacement for faulty aortic valves, or the valves that send blood to the body from the heart's main pumping chamber. The valves are viewed as an option for sick patients who may be too frail to withstand the rigors of major heart surgery.

There are two ways to deliver the devices to the heart, depending on a patient's condition. One, called a transfemoral procedure, involves passing the valve up a blood vessel through a small incision in the leg. There is another option called a transapical procedure, in which the valve is delivered between the ribs, for patients whose blood vessels may not accommodate the first delivery method.

St. Jude is also focused on aortic valves that can be put in place with both delivery methods. Callaghan said St. Jude has settled on a self-expanding metal framework design for the valves, which are surrounded by this framework and then expanded once they've been delivered.

Callaghan said that testing to determine the device's durability is well underway and that St. Jude is very pleased with the results.

"This is certainly a segment we are very excited about and pursuing very rapidly," he said.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

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