Good News for Boston Scientific – Analyst Blog

Boston Scientific Corporation (BSX) recently received the U.S. Food and Drug Administration (FDA) clearance for two manufacturing changes to its cardiac resynchronization therapy defibrillators (CRT-Ds) and implantable cardioverter defibrillators (ICDs). The company will immediately resume sales of these devices in the United States. These devices were temporarily held back for sales since the middle of March, 2010. 

 

Earlier, Boston 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 expects the production stalemate and recall of the affected devices to have a negative impact on its previously issued guidance for the first quarter and fiscal 2010. However, the resumption of CRT-Ds and ICDs sales will help the company prevent erosion of its top line and market share.

 

Boston 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. 

 

Boston had acquired the defibrillator business from Guidant Corporation in April 2006. The segment presently constituted 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.