STJ ST. Jude Medical, Inc.

Boston Scientific Corporation (BSX) has completed patient enrollment in the ASTI post-market clinical follow-up study that began in 2010. The study is designed to evaluate Adapt Monorail Carotid stent system in combination with FilterWire EZ Embolic Protection System for treatment of carotid artery disease in patients who are at high risk of surgery.

The study that enrolled 100 patients in Europe will examine rates of major adverse events – death, stroke or myocardial infarction after 30 days.  The study also aims to assess rates of late ipsilateral stroke, target lesion revascularization and in-stent restenosis. The Adapt Carotid Stent System is not available for sale in the US.  

Boston Scientific’s Peripheral Interventions portfolio consists of stents, balloon catheters, sheaths, which are used to diagnose and treat peripheral vascular disease. Sales of this segment were $176 million in the first quarter of 2011, up 7% (up 4% at CER) from $165 million in the year-ago period. The company experienced greater acceptance of recently launched products such as the Carotid Wallstent in Japan (in the second quarter of 2010), Epic (self-expanding stent for the treatment of iliac artery disease) and Express LD stent system.

Last month, the company expanded its portfolio with the launch of Mustang percutaneous transluminal angioplasty (PTA) balloon catheter (0.035 inch) globally. Introduction of this device could prove beneficial to a huge patient population as according to estimates, about 8−10 million patients in the US suffer from peripheral artery disease (PAD) giving way to blockage in vessels of the peripheral vasculature. In such cases, PTA balloon catheters come into play in peripheral angioplasty and stenting procedures to open  up blocked arteries.

We remain concerned about Boston Scientific’s core businesses, CRM and Cardiovascular, which are witnessing significant pricing pressure and loss of market share. Additionally, economic uncertainty is impacting procedure volume. The company also faces tough competition from players such as Medtronic (MDT) and St Jude Medical (STJ).

However, the company anticipates several new product launches in the coming quarters and consequently some revival in business. 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.

 
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