Amid St. Jude Medical's ($STJ) anguish over Durata leads, there's a chance for Boston Scientific ($BSX) to chart some gains in the cardiac world, according to a Citi analyst.
As The Associated Press reports, Citi's Matthew Dodds raised his rating on Boston Sci, pointing out that the latest FDA concerns over St. Jude's next-gen ICD leads could lead to Durata getting pulled from the market by mid-2013. If that happens, Boston Sci is positioned to reap a larger market share, Dodds says, snagging up to 41%, or $338 million, of St. Jude's lead sales.
St. Jude has touted Durata as free of the erosion risk that led to a recall of Riata, its predecessor, but a recent FDA letter chided the company for how it tests and manufactures the devices, sparking fresh concerns over Durata's safety. St. Jude is also in the throes of a legal fracas with AorTech, which makes the polymer insulation for Durata leads, and it's that very insulation that St. Jude says makes Durata safer than its forebear.
For Boston Sci, an uptick in cardiac revenue would be music to new CEO Mike Mahoney's ears. In the last quarter, Boston Sci's cardiac rhythm management revenues dropped 8% to $462 million, and the company reported an $809 million goodwill charge related to the shrinking CRM market. Mahoney is promising a comeback for the down-trodden devicemaker, and a boost in lead sales could go a long way to reversing the unit's continued slide.
- read the AP story