Boston Scientific Corp. (NYSE:BSX) officials said today that renewed strength in its drug-eluting stent business should be enough to offset a weak cardiac rhythm management market over the near term.
Speaking at an investors conference in Boston this morning, BSX officials said they expect the U.S. CRM market to be soft for at least the next six months, due in part to a massive study released in January showing that doctors implant defibrillators in thousands of patients who don’t need them.
“I think it’s real,” BSX CEO Ray Elliot said at a “town hall”-style meeting at the Deutsche Bank Securities Inc. Health Care Conference. “I don’t think it’s a long-term effect, but we’ve seen some pullback in the devices.”
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The CRM market slowdown affecting Boston Scientific’s defibrillator business is “not end of the world, but certainly a headwind,” added CFO Jeffrey Capello.
Elliott’s pronouncement isn’t surprising, given that BSX took a $723 million estimated goodwill impairment charge associated with its U.S. CRM unit during the first quarter, based on its dim view of the market.
But both men pointed to an unlikely ray of light: The comeback of Boston Scientific’s drug-eluting stent business, which Cappello said should be enough to offset the headwinds for the CRM business. Although the company’s DES sales have declined for several years now, “we have some tailwind with DES,” Capello said.
The company is “very bullish” on its DES business, Elliott said, due to the upcoming release of the new Ion DES and the anticipated 2012 release of its next-generation Promus Element stent into the domestic market.
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Those débuts are expected to help BSX increase its current 46 percent market share stateside, according to company officials. Capello said in a recent conference call with investors that the company maintains a healthy lead over its competitors at Abbott (NYSE:ABT), Johnson & Johnson’s (NYSE:JNJ) Cordis Corp. and Medtronic (NYSE:MDT).
Capello said BSX believes “Abbott’s share was approximately 31 percent, while J&J and Medtronic achieved approximately 10 percent and 13 percent, respectively.” The total U.S. DES market was about $422 million during the first quarter, he noted, about 8 percent smaller than it was during the same period a year ago. BSX saw its own DES sales drop to $189 million, down 13 percent from the comparable period in 2010. Taxus sales make up about 26 percent of the company’s total U.S. DES sales.
A study published in January in the Journal of the American Medical Assn. reviewed 111,707 defibrillator implants and showed that 22.5 percent of patients fell short of medical guidelines required to receive the $25,000 devices. Although the review didn’t discern why doctors weren’t sticking to guidelines, author Dr. Sana M. Al-Khatib told the New York Times that physicians’ lack of knowledge and awareness of the guidelines were the likely culprits. The report sparked fears among some cardiac device makers that renewed scrutiny could have a chilling effect on sales.
The Massachusetts Medical Devices Journal is the online journal of the medical devices industry in the Commonwealth and New England, providing day-to-day coverage of the devices that save lives, the people behind them, and the burgeoning trends and developments within the industry.
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