Boston Scientific Corporation
(BSX) recently suspended sales of its defibrillators after the company failed to alert the U.S. Food and Drug Administration (FDA) regarding changes in the manufacturing process of these devices. The company will retrieve all the affected devices from suppliers and hospitals. The resumption of sales is still unclear.
The news is extremely bad for Boston Scientific and could even affect its market share. The company is one of the leaders in the global defibrillator market with a roughly 25% market share. Its closest competitors in this segment are Medtronic Inc. (MDT) and St. Jude Medical Inc. (STJ), accounting for 45% and 23% of the global market share, respectively. 
Shares of Boston Scientific reacted negatively to the news, with the price declining roughly 9% in the last two trading sessions to close at $7.09 at the end of March 16, 2010. The shares even touched an intra-day 52-week low of $6.31 on the previous day.
Boston Scientific made two production changes that were not cleared by the FDA. However, the devices do not pose any threat to patients. Per the rules, medical device makers are required to alert regulators to significant changes in life-sustaining devices such as defibrillators.
Boston Scientific had acquired the defibrillator business from Guidant Corporation in April 2006. The segment presently constitutes 15% of the total company revenue.
Boston Scientific manufactures medical devices and products used in a broad range of interventional medical specialties. The company faces significant competition across its product portfolio. The primary competitors include Johnson & Johnson (JNJ), Medtronic Inc., Abbott Laboratories (ABT) and St. Jude Medical Inc.
Presently, we are ‘Neutral’ on Boston Scientific Corporation.

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