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Wednesday, November 15, 2006

More Bad News For Boston Scientific (BSX)

Boston Scientific is acting like its business is OK again after a string of bad news. The company is boasting that sales will rise 11% to 21% in 2007. For investors to believe this, they need to buy into the fact that most of the integration risks of the company's $21 billion purchase of medical devices company Guidant is behing it.

Boston Scientific is also asking Wall St. to believe that sales of its drug-coated stents ,which keep clogged arteries open, will improve. It is forecasting that stent sales could be as high as $2.7 billion next year. But, a number of studies show that stents may actually increase clotting and cause heart attacks. No wonder the company's stock trades near its 52-week low with shares changing hands at about below $16, down from nearly $28 earlier in the period.

Now, the news gets worse. A study published in the New England Journal of Medicine says that, in many cases, stent implants may not help patients at all. Treatment with drugs may well be just as effective in many patients, making stents unnecessay. The finding are particular harmful to the future of Boston Scientifc's devices if their is a health concern associated with stent implants.

Boston Scientifc obviously wants investors to think the worst is behind it and that 2007 will be a strong year. But, the evidence keeps contradicting that.

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

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