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Monday, November 06, 2006

Are The Storm Clouds Lifting At Boston Scientific?

Stocks: (BSX)(JNJ)(ABT)(MDT)

Boston Scientific said its sales next year would rise 11% to 21% over their levels this year. That would put revenue at $8.65 to $9.45 billion.

The surprising aspect of the statement is that drug-eluting coronary stents sales will do well, as high as $2.70 billion worldwide.

There is a great deal of controversy over whether these stents can cause complications that could threaten a patient's health. Investors would assume that the debate might hurt stent sales or even lead to class action suits from patients who believe that they have already been harmed. With six million people walking around (or not if the product didn't work) with stents in their arterties, one might assume that all the news about bad side affect could hurt Boston Scientific's growth. Beyond the health issue, Morningstar says that Abbott and Medtronic are entering the stent market. More competition.

Boston Scientific's other big sales generation products are cardiac rhythm management devices.

The news only gave Boston Scientific's stock a small push. It was up a little over 2% to $17. That is well below the 52-week high of $27.82. Maybe Wall St. thinks BSX is a little too optimistic.

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

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