European Union regulators approve Boston Scientific’s heart system
Boston Scientific Corporation (BSX) received approval from European Union (EU) regulators for its heart system, the Latitude Patient Management System. The company plans to start selling the device in Europe in the next few days.
The Latitude Patient Management System wirelessly monitors patients with implanted heart devices. Latitude monitors patients remotely and give updates on their health. The device has the capability to detect problems and send data to the patient’s physician. It is already in place in the U.S., with roughly 130,000 patients using it to date.
The new approval will increase BSX’s top-line. The company is a manufacturer of medical devices and products used in a broad range of interventional medical specialties. Boston Scientific competes in the cardiovascular, endosurgery and neuromodulation markets.
All three segments are experiencing strong sales growth and should remain relatively insulated from the current economic crisis. The company has historically grown through acquisitions, which had led to earnings-quality concerns.
Boston Scientific faces significant competition across its product portfolio. The primary competitors of the company include Johnson & Johnson (JNJ), Medtronic Inc. (MDT), Abbott Laboratories (ABT) and St. Jude Medical, Inc. (STJ).
Boston Scientific has several attributes that differentiate it from competition, such as the ability to create and acquire scientifically advanced technology, receive timely-approval from the regulators, apply technology in a cost-effective manner and with superior quality across product lines and markets, attract and retain skilled development personnel, obtain patent or other protection for its products, obtain required regulatory and reimbursement approvals, continuously enhance the quality of the systems, manufacture and successfully market the products and supply sufficient inventory to meet customer demand.
BSX’s first quarter of fiscal 2009 results were in line with our estimates. The stock is reasonably valued considering the company’s dominant position in the industry and the inelastic demand profile of its products.
We believe the recent approvals and launches will improve its 2009 outlook. Additionally, the pipeline of new products in the cardiovascular segment offers the potential for outperforming 2009 expectations. As such, our recent report has a Buy rating for Boston Scientific.
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