Boston Scientific Recalls Catheters - Analyst Blog
May 31 2011 - 7:51AM
Zacks
Leading medical devices player, Boston Scientific
Corporation (BSX) has announced a voluntary recall of its
iCross catheters. The catheters are used for intravascular
ultrasound (IVUS) imaging for patients about to undergo
transluminal coronary interventional procedures.
This recall involves about 29,664 iCross catheters distributed
in the US, Puerto Rico, Trinidad, Tobago and the American Virgin
Islands. Boston Scientific had no way but to initiate the recall
after getting reports of eight occurrences of catheter tip
detachments within April 1, 2010 and May 10, 2011.
However, the company confirmed that patients who had undergone
treatment with the recalled products would no way be affected since
the problem with the catheter occurs during the procedure. Boston
Scientific has a solution to the problem, which has been submitted
to the US Food and Drug Administration (FDA) for approval.
Boston Scientific has agreed to replace, free of charge, all
returned iCross catheters with Atlantis SR Pro catheters, which
will operate with its IVUS imaging consoles. The company does not
expect this recall to have any material financial impact. The FDA
has labeled this action as a Class I recall.
Earlier in the first quarter 2010, the company had to suspend
sales of its ICDs and CRTDs after it failed to inform the FDA
regarding changes in the manufacturing process of these devices. As
a result, Boston Scientific’s CRM segment recorded declining sales
apart from the negative impact on market share, which in turn
benefited players like Medtronic (MDT) and
St Jude Medical (STJ).
We remain concerned about Boston Scientific’s core businesses,
CRM and Cardiovascular, which are witnessing significant pricing
pressure and loss of market share.
Moreover, having witnessed, a reduction in the estimated size of
the US CRM market, the company recorded a $723 million of goodwill
impairment charge associated with its US CRM business unit in the
last reported quarter. Additionally, economic uncertainty is
impacting procedure volume.
Moreover, the sudden decision of Ray Elliott to retire this year
will again make the growth path uncertain. However, the company
anticipates launching several new products in the coming quarters,
which should revive the business to some extent.
Moreover, several acquisitions were made in the recent past to
target the areas of unmet medical needs. The restructuring
initiatives undertaken should also lead to improvement in bottom
line.
We are currently Neutral on the stock, which also corresponds to
the Zacks #3 Rank (Hold) in the short term.
BOSTON SCIENTIF (BSX): Free Stock Analysis Report
MEDTRONIC (MDT): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
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