10. Boston Scientific
CEO: Michael Mahoney
Based: Marlborough, MA
2014 diagnostics division sales: $7.38 billion
2013 diagnostics division sales: $7.14 billion
It's been a long, hard slog for Boston Scientific ($BSX), but it seems to be emerging from a period of retrenchment and downsizing, as well as the terrible and expensive acquisition of Guidant in 2006, which led to a $6 billion-plus write-down--or roughly one-fourth of the No. 10 player's market cap.
Boston Scientific stole Guidant from Johnson & Johnson ($JNJ) at the last second, and earlier this year agreed to pay the rival bidder $600 million due to a disagreement stemming from the acquisition, even though it saved J&J a lot of headaches by winning the bidding war. Still, the payout is far less than the $7.2 billion requested by J&J.
Ongoing litigation regarding its pelvic mesh remains a concern. The company had accrued $972 million in expenses for legal matters in 2014, but that was before the agreement with J&J.
The good news is that worldwide net sales grew 5% on a constant currency basis in 2014, led by its cardiovascular devices, the company's biggest device segment. Sales grew 5% to $2.9 billion. Boston Scientific said its Premier and Synergy drug-eluting stents are gaining worldwide market share. Looking ahead, the recent FDA approval of the stroke-preventing Watchman Left Appendage Atrial Closure device (after at least one rejection) should power growth, though a slow rollout is planned.
Even further down the horizon is a hoped-for FDA approval in 2017 of the company's Lotus TAVR for patients too frail for open-heart surgery. The device is already available in Europe. And Boston Scientific made some moves in peripheral cardiovascular devices with the acquisition of Bayer's interventional devices and an agreement to distribute Bard's ($BCR) drug-coated angioplasty balloon for noncardiac blockages.
Sales of rhythm management devices were up 6% to $2.1 billion. Here, the company's S-ICD, which does away with leads that connect to the heart (which have caused fatalities in the past), was a standout performer. In Q4 2014, the company announced that the device exceeded $100 million sales goal and received favorable reimbursement designations heading into 2015. Also in the rhythm management space, Boston Scientific launched upgraded versions of its Dynagen and Inogen implantable defibrillators with extended battery life.
Finally, the company bulked up in surgical devices with its purchase of Endo International's ($ENDP) men's health devices for $1.6 billion, marking the second deal in which it took on a device unit for a company wishing to specialize in drugs. Those devices for conditions like erectile dysfunction and incontinence had sales of $400 million in 2014. Overall Boston Scientific's medsurg division contributed $2.3 billion in sales in 2014.
As is the case with all devicemakers, Boston Scientific's numbers are less flattering when the strengthening dollar is taken into account. Including the impact of unfavorable currency fluctuations, sales were up 3%, instead of 5%.
-- Varun Saxena (email | Twitter)
Boston Scientific implantable defibrillator gets FDA green light
Boston Sci to acquire Endo's men's health devices for $1.6B
Boston Scientific partners with Bard to distribute Lutonix drug-coated angioplasty balloon in the U.S.