STJ ST. Jude Medical, Inc.

Leading medical devices player Boston Scientific (BSX) presented positive data from the Research in Severe Asthma (RISA) trial at a conference in Amsterdam. It was observed that patients with severe refractory asthma, when treated with Alair bronchial thermoplasty (BT) system, experienced stability in lung function without clinical complications over a five-year period.

Long-term safety data from the RISA trial also concurred with another five-year data from the Asthma Intervention Research (AIR) study. The AIR trial comparing BT with the standard of care, for patients with moderate-to-severe asthma, also condoned the long-term safety profile of the BT system.

Moreover, findings from the Asthma Intervention Research 2 (AIR2) trial show persistence of safety and effectiveness of BT after two years. Besides, results from AIR2 trial at one year also demonstrated positive outcome with respect to reduction in asthma attacks (by 32%), emergency room visits for respiratory symptoms (84%) and days lost from work (66%).

Alair was inducted in Boston Scientific’s portfolio with its acquisition of Asthmatx in October 2010. The Alair BT system provides long lasting and improved asthma control for adult patients suffering from severe asthma who have not benefited from current inhaled medications.

Alair has been approved in both Europe and the US and is the first device-based asthma treatment approved by the US Food and Drug Administration (FDA). Alair has been available in the UK since June 2011 and in other European countries since September 2011. 

Asthma is one of the most common ailments in the world which involves a costly treatment process and afflicts more than 30 million people in Europe and 300 million globally. About 20% of European patients with severe asthma cannot control their symptoms with drugs. We believe recent favorable data from Alair BT should lead to better acceptance of the product going ahead.

Recommendation

Boston Scientific presented all-round growth during the most recent quarter, exceeding its own guidance, despite the lingering challenges in its core CRM business.

The company is leaving no stone unturned to keep the company on the growth track. These include technological developments through acquisitions, restructuring program, debt reduction and a new $1 billion share repurchase program. However, the company faces stiff competition from players such as Medtronic (MDT) and St Jude Medical (STJ) among others.

We currently have an Outperform recommendation on the stock, which also corresponds with the Zacks #2 Rank (Buy) in the short term. Both Medtronic and St Jude Medical carry Zacks #3 Ranks (Hold) along with Neutral recommendations.

 
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