Boston Scientific Inc.BSX

Morningstar Rating

Stock Research and Analysis

by Debbie S. Wang

Boston Scientific has struggled with a large case of indigestion after its pricey purchase of Guidant and now could be facing slowing procedure growth in its two key markets, stents and cardiac rhythm management (CRM), as well as delays in launching Read more

Bulls Say

New Boston CEO Ray Elliott has had proven success at Zimmer, bringing down manufacturing costs and pushing the operating margin into the low 30s. He has set a goal to do the same at Boston.

With the increasing emphasis on comparative effectiveness, Boston inherited Guidant's earlier landmark MADIT II study that provides some of the longest-term data available demonstrating the efficacy and cost-effectiveness of ICDs.

With the launch of the Promus Element, Boston could see gross margins increase as the firm will not need to share proceeds from that product with Abbott Labs.

Boston remains one of the top players when it comes to intellectual property in the medical technology arena, which bodes well for the firm's ability to innovate going forward.

Aside from CRM and DES, Boston remains a major player in a vast range of devices used in minimally invasive procedures. The firm has also made investments in the emerging therapeutic areas of neuromodulation and electrophysiology. Read more

Bears Say

A large-scale study of patients with stable coronary artery disease suggests that the use of stents does not offer any advantage over drug therapy when it comes to preventing heart attacks or death. This could temper demand going forward.

With more rivals competing, the drug-coated stent market can be treacherous with physicians eager to try next-generation products, and market share can shift dramatically in a short amount of time.

Recent studies have suggested that there is a small, but potentially fatal, blood clot side effect associated with the long-term use of drug-eluting stents. This has limited the patient pool to those who can tolerate longer-term use of blood-thinning medications.

Despite favorable data from the MADIT-CRT trial that demonstrated that resynchronization therapy can delay the process of congestive heart failure, practitioners have generally not been impressed with the cost-effectiveness aspect of the therapy. Read more

Strategy

Boston Scientific seeks to maintain its dominant position in the less-invasive medical-device market and strengthen its presence in the attractive CRM arena. To maintain its leadership position, the Read more

Management

We give Boston a C for stewardship and were disappointed by management's complete disregard for existing shareholders' interests as the firm pursued the pricey purchase of Guidant. Ray Elliott, former CEO of Zimmer Medical Holdings ZMH, stepped into Read more

Profile

Boston Scientific produces less-invasive medical devices that are inserted into the human body through small openings or cuts. It manufactures products for use in angioplasty, Read more

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