After the financial week that Boston Scientific ($BSX) just endured, interim CEO Hank Kucheman came on with a strong dose of optimism, insisting he believes revenue will resume growing in 2013.
Lets recap: the Massachusetts heart device giant reported this week it lost $3.4 billion for the 2012 second-quarter, due to a goodwill impairment charge. But one-time charges aside, sales continued to tumble for its cardiac rhythm management and interventional cardiology business lines. As Bloomberg reports, Boston Scientific trimmed its 2012 profit and revenue forecasts as a result. And then there's the share price: It plunged 6.8% to a 17-year low, hitting $4.97 at the close of trading in response to the bad news, capping a 28% drop over the last year.
But Kucheman is pleading patience.
"It gets down to us executing against a strategy we have laid out," Kucheman told FierceMedicalDevices. "We have been open and transparent with the investment community as to what that strategy is. And we will begin to see these things gain traction in the next 12 to 18 months. The investors that are with us today see that opportunity."
Kucheman reiterated that he sees a steady update of regular and new products--like the Alair system to treat asthma--will start to generate significant new revenues. Boston Scientific also closed its $150 million purchase of Cameron Health earlier this year. That company's signature product, an S-ICD device that works without leads, is awaiting FDA approval, and Kucheman said that product will help Boston Scientific reach critical mass in its recovery.
There is some good news to report. Let us not forget that Boston Scientific did see some growth during the 2012 second-quarter in neuromodulation and endoscopy sales, and that is a trend expected to continue. Kucheman noted that "7 of our 12 business units are growing greater than the market right now," and restructuring efforts begun in 2010 should help the company slim down and become more nimble in the long run. But consider that while Kucheman may be optimistic about the resumption of overall revenue growth in 2013, he's on the record with a sobering assessment of the global CRM market.
"We all know our two biggest businesses are the ones we are facing headwinds with CRM and [interventional cardiology], but the investment community has not given us a lot of [credit] for being able to grow over time," Kucheman said. "We believe we can get back to flat, to a maybe slightly positive outlook in 2013."
Meanwhile, Boston Scientific's stock price started to rebound ever so slightly in earlier trading on July 27, rising .6% to $5.
- read the Bloomberg story
- check out the NYT coverage
- here's MedCity News' take
- consider MassDevice's piece