Dow Jones Newswires -- July 29, 1998
Boston Scientific Up 8% On Stable 2Q
Angioplasty Sales
Dow Jones Newswires
By Louis Hau
NEW YORK (Dow Jones)--Despite falling slightly short of Wall Street's
second-quarter earnings estimates, Boston Scientific Corp. (BSX) saw its
shares climb 8.1% thanks to stable angioplasty sales, analysts said.
The Natick, Mass., medical-device company is a leading player in the
angioplasty market but has been unable to capitalize on the burgeoning
growth in the U.S. coronary-stent market because of chronic delays in
getting Food and Drug Administration approval for its lead stent product,
the Nir.
Nonetheless, Boston Scientific still saw second-quarter vascular-product
sales increase to $394 million, up 6.5% over last year, thanks to stable
angioplasty-balloon sales and strong revenue growth in the company's
interventional devices to treat vascular problems in the brain and the
abdomen.
Despite not having a stent in the U.S. market, sales at Boston Scientific's
angioplasty unit SciMed grew 7% sequentially, with angioplasty-balloon
prices holding steady, according to J.P. Morgan Securities Inc. analyst
Michael Weinstein.
Weinstein upgraded Boston Scientific to a buy from a long-term buy. In a
research note, he said he expects Boston Scientific to grab the No. 1
position in the U.S. stent market with the Nir, which should receive FDA
approval in the next couple of weeks. Despite the delays in getting market
approval, the Nir should rise to the top of the market on the strength of the
SciMed sales force, its longstanding leading position in the U.S. balloon
market and the added marketing advantage of the Nir's Socs system,
Weinstein said. The Socs system is a sheath that secures the stent more
securely to the angioplasty balloon being used to deploy it.
Boston Scientific's performance in the quarter offered further evidence that
Guidant Corp. (GDT) hasn't been able to translate its very strong stent sales
into significant U.S. market-share gains in angioplasty balloons at the
expense of Boston Scientific, said NationsBanc Montgomery Securities Inc.
analyst Kurt Kruger.
Another piece of positive news for Boston Scientific was the much
stronger-than-expected sales performance of the company's Radius stent,
which has already racked up sales of $10 million since receiving FDA
approval on July 16, Kruger said. The Radius is a self-expanding stent that
doesn't need a balloon to be deployed like conventional stents. While it is
perceived as a niche product, the Radius' surprisingly robust sales launch
suggests that it could potentially be a greater sales contributor than
previously thought, Kruger said.
Boston Scientific reported second-quarter sales of $505.7 million and net
income of $78.7 million, or 39 cents a diluted share, a penny short of the
First Call Corp. consensus projection. In the year-ago period, the company
reported revenue of $473.7 million and operating net income of $90 million,
or 45 cents a share.
Boston Scientific's NYSE-listed shares rose 5 11/16 to 76 1/8 on volume of
nearly 1.4 million. Average volume is 741,500.
- Louis Hau; 201-938-5240; louis.hau@cor.dowjones.com
Briefing Book for: BSX
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