St. Jude Medical Inc.'s making a multi-million dollar bet on a new invasive cardio imaging modality.

On Wednesday night, the device giant announced it was buying cutting-edge LightLab Imaging, LLC for nearly $90 million cash from its parent company Goodman Co., Ltd.

LightLab develops optical coherence tomography, a technique where a catheter is inserted into the blood vessel and beams near-infrared light into the tissue. The device analyzes the light that bounces back to create images 10 times sharper than that from intravascular ultrasound, according to Westford, Mass.-based LightLab.

LightLab received U.S. Food and Drug Administration clearance of the first OCT products available in the U.S. just a few weeks ago, St. Jude said. But the products have been available in Europe since this time last year.

"The C7-XR Imaging System with the C7 Dragonfly Imaging Catheter is the next-generation OCT platform, and was launched in Europe in May 2009," a St. Jude spokeswoman told DOTmed by email.

St. Jude expects OCT to add an additional $20 million in sales to its cardiovascular segment.

The deal should close in the second quarter of this year with no impact on earnings per share, Rick Wise, an analyst at health care investment bank Leerink Swann, said in a letter to investors Thursday morning.

"The deal seems relatively small for [St. Jude's]," Wise said. "But it ushers STJ into a new large, rapidly-growing market with promising new technology."

Invasive imaging is a nearly $500 million market, growing at a spanking rate of 10 to 15 percent, Wise said.

Still, the bank cautioned that OCT technology, though exciting, is new. Wise noted that an expert they consulted with told them while interesting, "broad-based clinical uses have yet to be clearly established."

St. Jude also has a competitor in Volcano Corporation. The San Diego, Calif-based company announced Thursday it was going to use its pending OCT device in trials in the United States and South America later this year. It predicts European and American releases in 2011. Leerink believes Volcano is well-positioned in the market because of its large installed user base of intravenous ultrasound consoles, some of which could be upgraded to OCT when it becomes available.

As of Friday afternoon, St. Jude was down 0.7 percent at 37.14 a share on the New York Stock Exchange, and Volcano was up 2.63 percent at 22.44 a share on Nasdaq.

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