Boston Scientific Remains Optimistic, Despite Market Slumps

Boston Scientific's "largest driver in financial performance" is the drug-eluting stent market, which has been softening, with "no rebound" seen yet, Chief Operating Officer Paul LaViolette said at the Lehman Brothers 10th Annual Global Healthcare Conference. The company's other major focus area, cardiac rhythm management, is also in a recovering market, he said.

Still, LaViolette said, the company has two drug-eluting stent platforms to diversify its market position. He added that he thinks the market trend and the "wait-and-see" attitude will ultimately reverse, that surgery is not growing as an option, and that medical management does very little to address the underlying disease state of the aging diabetic and obese populations.

Also, the half-billion-dollar Japanese market is an opportunity for Boston Scientific, he said, adding that there the penetration rate has not been dramatically altered by the controversy surrounding late-stent thrombosis. LaViolette said Boston Scientific is optimistic about its ability to "take over market leadership in Japan between now and the end of this year."

Boston Scientific has become a cardiovascular company, LaViolette said, leading the company to explore an initial public offering (IPO) for its endosurgery business. Selling the endosurgery business would create a tax-efficient proceed to help the company pay down some of its debt, he added. LaViolette estimated the target IPO date would be in late 2007 or early 2008.

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