STJ ST. Jude Medical, Inc.

Boston Scientific Corporation (BSX) strengthened its Peripheral Interventions portfolio with the launch of Coyote Balloon catheter (0.014 inch) to treat patients undergoing peripheral angioplasty procedures below the knee. The company is marketing the product in the US, Europe and other international markets.  

Prior to this, in June, the company had launched 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.

Sales of this segment were $189 million in the second quarter of 2011, up 14% (up 7% at CER) from $166 million in the year-ago period due to the recently launched products, particularly in stents and Interventional Oncology franchise. The company expects the segment to continue to grow in the forthcoming period.

Boston Scientific presented all-round growth during the second quarter, outgrowing its own guidance, although the CRM segment continues to remain challenging. After several quarters, growth in the Cardiovascular portfolio came as a pleasant surprise.

While the launch of Ion in the US helped the company increase its share in the DES market, the launch of Promus Element is expected to come ahead of its original timeline of June 30, 2012.

Boston Scientific is leaving no stone unturned to keep it on the growth track. These include technological developments through acquisitions, restructuring program, debt reduction and a new $1 billion share repurchase program. Based on a strong quarter, the company raised its guidance for 2011.

However, our views are restrained as the CRM segment continues to be the major area of concern. Boston Scientific also operates in a highly competitive environment with the presence of players such as Medtronic (MDT) and St Jude Medical (STJ). Moreover, the company remains exposed to pricing/procedure volume headwinds.

We currently have Outperform recommendation on Boston Scientific, which is backed by short-term Zacks #1 Rank (Strong Buy).

 
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