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Thursday, September 07, 2006

Boston Scientific, The Last To Know (BSX)

Boston Scientific now says that it has clinical evidence that its drug-coated stents can cause clotting months after they are put into the heart. Cardiologists have been saying this for over a year.

The implications of this to patients and the stock price of Boston Scientific could be severe. According to the Wall Street Journal more than a million people get the devices each year, so the stents could actually become a public health issue.

Aside from the potential loss of life, Boston Scientific may now be faced with lawsuits and a drop in its revenue. J&J also makes drug coated stents.

Boston Scientific's stock has dropped from a 52-week high of $27.82 to $17.27.

Revenue growth at BSX over the last three years has been amazing. The topline in 2003 was $3.5 billion. In 2005, it was $6.2 billion. Over the last four quarters, the growth has continued.

Morningstar projects 10% revenue growth a year for BSX over the next four years. If the stent problem is severe, that may just be a nice dream.

Douglas A. McIntyre can be reached at He does not own shares in companies that he writes about.

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