St. Jude Medical, a Minnesota-based global medical device manufacturer, saw its shares drop last week after a Muddy Waters Capital report noted demonstrations of cyber attacks to two of the company’s cardiac devices.
According to an Aug. 25th report from CNBC, shares briefly fell more than 8 percent on that day, but ended up recovering though still finishing the day down 5 percent. Meanwhile, the report from the short selling firm Muddy Waters said they have seen demonstrations of two types of cyber attacks against St. Jude’s implantable cardiac devices: a “crash” attack that causes cardiac devices to malfunction—including by apparently pacing at a potentially dangerous rate; and, a battery drain attack that could be particularly harmful to device dependent users. The report from Muddy Waters admitted that the firm has no experience in cybersecurity, but nonetheless was able replicate in-house key exploits that help to enable these attacks.
The firm’s report stated that, “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.”
What’s more, the report noted that the devices’ vulnerabilities are more worrying than the medical device hacks that have been publicly discussed in the past. “These attacks take less skill, can be directed randomly at any STJ Cardiac Device within a roughly 50 foot radius, theoretically can be executed on a very large scale, and most gallingly, are made possible by the hundreds of thousands of substandard home monitoring devices STJ has distributed,” the report stated. “The STJ ecosystem, which consists of Cardiac Devices, STJ’s network, physician office programmers, and home monitoring devices, has significant vulnerabilities. These vulnerabilities highly likely could be exploited for numerous other types of attacks,” it concluded.
In a Bloomberg report, Phil Ebeling, St. Jude’s chief technology officer, insisted that “The allegations are absolutely untrue.” He added, “There are several layers of security measures in place. We conduct security assessments on an ongoing basis and work with external experts specifically on Merlin@home and on all our devices.” Even so, the Bloomberg report predicted that if proven, the company’s planned purchase by Abbott Laboratories “could be derailed.”