The Boston Scientific Corporation (NYSE: BSX) (abbreviated BSC), is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a range of interventional medical specialties, including interventional cardiology, peripheral interventions, neuromodulation, neurovascular intervention, electrophysiology, cardiac surgery, vascular surgery, endoscopy, oncology, urology and gynecology.
Boston Scientific is well known for the development of the Taxus Stent, a drug-eluting stent which is used to open clogged arteries. This product was at the center of a claim of patent infringement on the part of Boston Scientific, which was found liable for $431 million in damages.[1]
Boston Scientific's main competitors are Johnson & Johnson, Medtronic, and St. Jude Medical. The company recently acquired longtime competitor Guidant for approximately $27 billion. The former Guidant was split between BSC and Abbott Laboratories. [2] [3]
Navilyst Medical was formed in February 2008 from Boston Scientific's Fluid Management and Vascular Access business units. [4]
Beginning in 2003, Johnson & Johnson and Boston Scientific have been involved in a series of litigation involving patents covering heart stent medical devices. Both parties claimed that the other had infringed upon their patents. The litigation was settled once Boston Scientific agreed to pay $716 million to J&J in September 2009 and an additional $1.73 billion in February 2010.[5]

Boston Scientific Corporation is a worldwide developer, manufacturer and marketer of medical devices that are used in a range of interventional medical specialties. During the year ended December 31, 2010, the Company’s products were offered for sale by seven business groups: CRM, Cardiovascular, including International Cardiology and Peripheral Interventions businesses; Electrophysiology; Endoscopy; Urology/Women’s Health; Neuromodulation, and Neurovascular. During 2010, it had 28% of net sales from CRM business, 42% from Cardiovascular group, 2% from Electrophysiology business, 14% form Endoscopy business, 6% from Urology/Women’s Health business, 4% from Neuromodulation business, and 4% from Neurovascular business. In October 2010, the Company acquired Asthmatx, Inc. In January 2011, the Company acquired Intelect Medical, Inc. In March 2011, the Company acquired Atritech, Inc. In January 2011, it sold its Neurovascular business to Stryker Corporation.
Cardiac Rhythm Management
The Company develops, manufactures and markets a variety of implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities, including Implantable cardioverter defibrillator (ICD) systems used to detect and treat abnormally fast heart rhythms (tachycardia) that could result in sudden cardiac death, including implantable cardiac resynchronization therapy defibrillator (CRT-D) systems used to treat heart failure, and Implantable pacemaker systems used to manage slow or irregular heart rhythms (bradycardia), including implantable cardiac resynchronization therapy pacemaker (CRT-P) systems used to treat heart failure. During 2010, it launched CRM products, including an upgrade to its LATITUDE system, providing enhanced functionality, as well as its new 4-SITE lead delivery system. The products in the pipeline include INGENIO pacemaker system, and next-generation line of defibrillators, INCEPTA, ENERGEN and PUNCTUA.
Interventional Cardiology
The Company manufactures coronary stent product offerings. Coronary stents are tiny, mesh tubes used in the treatment of coronary artery disease, which are implanted in patients to prop open arteries and facilitate blood flow to and from the heart. During 2010, it launched its third-generation TAXUS Element paclitaxel-eluting stent system in Europe/Middle East/Africa (EMEA) region and certain Inter-Continental countries, and continues to sell its second-generation TAXUS Libert paclitaxel-eluting stent system in the United States and Japan. It also markets PROMUS everolimus-eluting stent system, supplied to it in the United States and Japan by Abbott Laboratories, as well as its next-generation nternally-developed and manufactured everolimus-eluting stent system, the PROMUS Element stent system in the United States
Endoscopy
The Company markets a range of products to diagnose, treat and ease a variety of digestive diseases, including those affecting the esophagus, stomach, liver, pancreas, duodenum, and colon. Common disease states include esophagitis, portal hypertension, peptic ulcers, as well as esophageal, biliary, pancreatic and colonic cancer. It offers the Radial Jaw Single-Use Biopsy Forceps, which are designed to enable collection of high-quality tissue specimens without the need to use channel therapeutic endoscopes and during 2010, expanded its offering of this product to include a variety of sizes. Its line of RX Biliary System devices are designed to provide access and control for physicians to diagnose and treat challenging conditions of the bile ducts, such as removing gallstones, opening obstructed bile ducts and obtaining biopsies in suspected tumors. It also markets the Spyglass Direct Visualization System for direct imaging of the pancreatico-biliary system. During 2010, it continued commercialization of WallFlex family of stents in particular, the WallFlex Biliary line and WallFlex Esophageal line, and it’s Resolution Clip Device.
Electrophysiology
Within the Electrophysiology business, the Company develops less-invasive medical technologies used in the diagnosis and treatment of rate and rhythm disorders of the heart. Included in its product offerings are radio frequency generators, intracardiac ultrasound and steerable ablation catheters, and diagnostic catheters. Its products include the Blazer line of ablation catheters, including its -generation Blazer Prime ablation catheter. It sells products designed to treat patients with non-vascular disease. Its vascular suite of products include biliary stents, drainage catheters and micro-puncture sets designed to treat, diagnose and ease various forms of benign and malignant tumors. In 2010, the Express LD Stent System received FDA approval for an iliac indication, and it continued to market its Express SD Renal Monorail premounted stent system for use as an adjunct therapy to percutaneous transluminal renal angioplasty in certain lesions of the renal arteries, as well as Sterling, Monorail and Over-the-Wire balloon dilatation catheter for use in the renal and lower extremity arteries.
Urology/Women’s Health
The Urology/Women’s Health division develops and manufactures devices to treat various urological and gynecological disorders. The Company sells a variety of products designed to treat patients with urinary stone disease, stress urinary incontinence, pelvic organ prolapse and excessive uterine bleeding. It offers a line of stone management products, including ureteral stents, wires, lithotripsy devices, stone retrieval devices, sheaths, balloons and catheters. It markets a range of devices for the treatment of conditions, such as female urinary incontinence, pelvic floor reconstruction (rebuilding of the anatomy to its original state), and menorrhagia (excessive menstrual bleeding). It offers a range of mid-urethral sling products, sling materials, graft materials, pelvic floor reconstruction kits and suturing devices. During 2010, it launched its Genesys Hydro ThermAblator (HTA) system, a next-generation endometrial ablation system designed to ablate the endometrial lining of the uterus in premenopausal women with menorrhagia.
Neuromodulation
Within the Neuromodulation business, the Company markets the Precision Spinal Cord Stimulation (SCS) system, used for the management of chronic pain. This system delivers pain management by applying an electrical signal to mask pain signals travelling from the spinal cord to the brain. The Precision System utilizes a rechargeable battery and features a programming system. During 2010, it received the Food and Drug Association (FDA) approval and launched two lead splitters, as well as the Linear 3-4 and Linear 3-6 Percutaneous Leads for use with its SCS systems, offering a range of lead configurations and designed to provide physicians more treatment options for their chronic pain patients.

In August 1999 Boston Scientific recalled two of its medical laser system used in treating heart disease, the Rotablator RotaLink Advancer and RotaLink Plus systems. The systems employed a high-speed drill that used a blade to clear plaque from a clogged artery. After the company received complaints that the system's brake failed to stop the drill from moving through the artery after it had already cleared the blockage, it issued a voluntary recall. The company had sold about $60 million worth of the Rotablator systems in the first half of 1999 and expected no further sales for the rest of the year.
For 1999 the company reported revenue of $2.84 billion and net income of $371 million. Revenues for the first half of 2000 were expected to suffer from a lack of new products. In the latter half of 2000 the company was planning to introduce a gold-plated stent. Analysts noted that Boston Scientific was lagging behind its two major competitors, Guidant Corporation and Medtronic Inc., in introducing new stents, which typically had one-year life cycles.
Between July 1999 and February 2000 the company's stock price fell by 57 percent, from around $46 to $19 a share. In 2000, Tobin created a new business unit focused solely on heart stents and stent-delivery systems. These had been manufactured by the company's Minneapolis-based Scimed division, which would continue to provide cardiologists with products such as balloon catheters, guide wires, and guide catheters. In addition, Tobin announced he would be naming a chief technology officer to the newly created position.
In March 2000 Boston Scientific received FDA approval to resume marketing its NIR on Ranger with Sox coronary stents, after solving the leakage problems.
In July 2000 Boston Scientific continued its reorganization, cutting 1,000 positions in Minnesota, Washington, and Massachusetts, while adding 100 employees to its Miami operation and 800 jobs to company plants in Ireland. In Miami, some 300 jobs involving the production of biopsy forceps would be transferred to a lower-cost foreign contract manufacturer, while 400 positions for workers making guidewires were added. About 850 workers were dismissed from the company's Watertown, Massachusetts, plant. Facilities in Plymouth, Minnesota, which employed about 750 workers, and Redmond, Washington, with about 350 employees, were to be closed. One of the Watertown sites became the headquarters to the company's Medi-Tech division, which developed vascular surgery and radiology products. The reorganization was expected to save about $70 million in 2001 and $145 million in 2002.
Difficulties between Boston Scientific and Medinol Ltd., its key supplier of coronary stents, led to delayed product launches, according to some analysts. As a result, the company's stock plunged more than $7 in one day in July 2000 to close at $18.5625. Also affecting the stock price were the company's lower-than-expected second-quarter sales and a poor outlook for the rest of 2000. Boston Scientific subsequently entered negotiations to acquire Medinol Ltd., of which it already owned part, as a means of becoming more competitive with rival companies that already made their own stents.
Meanwhile, the episode of fraudulent sales reports for the period from January 1997 through June 1998 from Boston Scientific Japan was resolved with the Securities and Exchange Commission, whose report chastised the company for lacking effective controls at the time.
The year 2000 and those leading up to it were difficult for Boston Scientific. Product recalls and new competitors led to the loss of the company's market-leading position in its key product line, coronary stents and stent systems. Difficulties with its primary supplier of stents added to the company's woes. Its stock fell out of favor with Wall Street, resulting in a significant reduction in the firm's market capitalization. As investors wait for Boston Scientific to return to its leadership position, the company faces multiple challenges.
Principal Divisions:: EP Technologies; Medi-Tech; Microvasive Urology; Microvasive Endoscopy; Scimed; Target Therapeutics.
Principal Competitors: Cook, Inc.; Johnson & Johnson (Cordis Unit); EndoSonics; Medtronic Inc.; Guidant Corp.; Arterial Vascular Engineering Inc.; Human Genome Sciences; GenVec Inc.; Spectranetics Corp.


OVERALL
Beta: 1.15
Market Cap (Mil.): $11,444.90
Shares Outstanding (Mil.): 1,528.02
Annual Dividend: --
Yield (%): --
FINANCIALS
BSX.N Industry Sector
P/E (TTM): 21.07 8.83 40.56
EPS (TTM): 120.70 -- --
ROI: 2.72 3.20 1.92
ROE: 4.92 4.15 2.49

Statistics:
Public Company
Incorporated: 1979
Employees: 13,500
Sales: $2.84 billion (1999)
Stock Exchanges: New York
Ticker Symbol: BSX
NAIC: 339112 Surgical and Medical Instrument Manufacturing


Key Dates:

1969: Medi-Tech Inc., partially owned by John Abele, introduces its first products, a family of steerable catheters.
1979: Boston Scientific is founded by John Abele and Peter Nicholas for the purpose of acquiring Medi-Tech, Inc.
1992: Boston Scientific makes first public stock offering.
1994: Boston Scientific begins a string of acquisitions that will raise revenue to $2.84 billion in 1999.
 
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