Boston Scientific hopes to capitalize on competitors' weaknesses

Boston Scientific ($BSX) thinks it will benefit from recent less-than-favorable studies of competitor devices. The company is trotting out data for a bioresorbable stent from Abbott ($ABT) and transvenous leads in some St. Jude Medical ($STJ) products that highlight the advantages of its own offerings.

During Boston Scientific's second-quarter earnings call, management pointed to a recent study published in EuroIntervention showing that Abbott's Absorb BVS bioresorbable stent patients had a 3.4% rate of stent thrombosis at one year.

"To put that in perspective, the Synergy stent thrombosis rate at three years is 0% admittedly in a more simple patient population," Boston Scientific Chief Medical Officer Keith Dawkins said of the company's own stent. "In terms of BVS, we note a single--low-single-digit EU market penetration. That's despite the fact that CE mark was achieved for the product 3.5 years ago, and I think that compares strikingly with what we're doing with Synergy," he said, adding that he expects U.S. approval of the CE-marked product in late 2015.

In addition, Boston Scientific recently told FierceMedicalDevices that its subcutaneous implantable defibrillator should gain ground due to a study in Heart Rhythm that once again raised well-established safety concerns about the transvenous leads used in some St. Jude Medical products. And during the earnings call, CEO Michael Mahoney said Boston Scientific remains "very comfortable with our target for S-ICD revenue contribution north of $75 million." The S-ICD uses leads as well, but not the transvenous ones that contact the heart.

Boston Scientific is recalibrating its renal denervation strategy in light of disappointing clinical trial results from Medtronic ($MDT). This time, the company didn't benefit, for the results cast doubt on the technology in general, and others are scrambling to find a way forward as well.

"We expect to engage regulatory agencies in the coming weeks and we'll propose a revised daily protocol in which our goal would be to isolate the effects of renal denervation while minimizing the challenges encountered in other trials due to the unpredictable effects of changes in medication and patient compliance. This is an innovative approach that we believe is the appropriate strategy, given both the significant opportunity and near-term challenges in the renal denervation market," Mahoney said.

The CEO indicated that only small acquisitions were likely amid a period of consolidation in the industry. "When we think about how we compete, we want to be the preferred innovative clinical leader in very large disease states," Mahoney said. "And we have seven of those businesses today, so we'll continue to provide tuck-in acquisitions and the right innovation bets to be really clinically differentiated and have scale in those specific disease states."

The company engaged in one such acquisition during the quarter when it agreed to purchase Bayer's interventional unit, focused on devices for peripheral artery disease.

For the quarter, Boston Scientific reported sales of $1.87 billion in Q2, a 4% increase year over year. The cardiovascular group posted revenues of $739 million (up 2%), rhythm management $553 million (up 8%) and medsurg $580 million (up 5%). Highlights of the quarter include the receipt of three CE marks, the launch of the Promus Premier coronary stent in Japan and FDA approval of the Rebel bare-metal stent.

- read the earnings release

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