SLUMPING TAXUS SALES LEAD TO EARNINGS WARNING FOR BOSTON SCIENTIFIC
Sales of Boston Scientific's flagship Taxus stent are continuing to erode, prompting the company to issue a warning this week that its third-quarter earnings would likely be lower than expected.
Speaking at a healthcare conference in Boston Sept. 7, Boston Scientific Chief Financial Officer Larry Best said the company was unlikely to meet its previous forecast for the third quarter, which was projected at per-share earnings between 44 cents and 49 cents, and sales of between $1.56 billion and $1.63 billion. Best, who called the firm's performance "surprisingly soft," didn't provide updated projections for the quarter.
"Although the third quarter looks soft, we remain hopeful that we will meet our guidance for the year on revenues and earnings," said Best.
While Boston Scientific didn't provide details about how much market share the Taxus has lost, the firm has clearly struggled to maintain its once-dominant position in the stent market in the face of tougher competition from rival Johnson & Johnson (J&J), which markets the Cypher sirolimus-eluting stent system.
The last few months have been particularly difficult for Boston Scientific, as several studies have been published in prominent medical journals suggesting that J&J's Cypher appeared to be more effective at keeping arteries clear. The study results prompted J&J unit Cordis to increase its output of Cypher stents in anticipation of increased sales.
Boston Scientific has also been stung by a series of warning letters from the FDA, including one issued late last month for violating current good manufacturing practices. The letter accused the firm of shipping products not cleared for sale, including some units of the Taxus stent.