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Boston Scientific Corporation Message Board

  • noitalltoo noitalltoo Sep 21, 2003 8:58 AM Flag

    Another Reality Check

    Have the investors in this company really taken into account the risk of either an injunction against Express or the fact that eventually they will lose the Palmaz patent case regardless of how long they delay the outcome. The longer the delay the bigger the check written to JNJ for damages. Think about that risk combined with safety issue/failure to get FDA approval risk and you will realize a 60:1 P/E is a little pricey (i.e., essentially no upside and a big chance of a monstrous drop if Palmaz hits or FDA fails to approve quickly).

    "Of course, court battles could throw this into disarray. Boston Scientific and J&J, for instance, have a patent war going, with J&J asking a federal judge to enjoin Boston Scientific from making its Taxus Express stent. If things go J&J's way in court, that could have major adverse consequences for BostonScientific. "

    -By Daniel Rosenberg; Dow Jones Newswires; 312-750-4118;
    daniel.rosenberg@dowjones.com

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    • I think an injunction against BSX is a low-probability.

      Future damages for patent infringement are a high probability. However, my guess is that most of the people currently speculating in BSX believe that they can "get out" before this becomes widely known or factored into the stock price.

      Recently, BSX was ordered to pay hundreds of million$ of dollars in a patent infringement case. The analysts claimed this had "no material affect" on the company since Boston had cash and had been accruing for it.

      If Taxus is approved for sale it would be prudent of us to watch the balance sheet for accrued expenses or a growing balance in legal liabilities to get a feel for how the management team assesses this risk.

      • 1 Reply to mba_investor
      • Good points. If BSX is lucky enough (or unlucky enough depending on your perspective) to get into the DES market and take away $3-4 billion in Cypher sales from JNJ, the current shareholders should understand the risks, The risk is that in the end, when (notice I did not say if) BSX is found guilty of willful patent infringement this imposes treble (triple damages). Since both the jury and the judge have found them already guilty of infringing the Palmaz patent (NIR stent), they will soon be paying ~$500 million in damages for that case.The infringement case against Express (infringing both Palmaz and Schatz patents) is even clearer. Don;t forget recent appeals court has upheld Palmaz and Schatz patents very broadly. BSX knows they are infringing this patent. Damages may thus be tripled yielding a $5-7 billion dollar settlement against BSX by 2006 (if they are not re,moved from the stent market by the patent before this). Also, I believe that Schatz patent (which Express also infringes) is good for another 4 years (not 2 years like Palmaz) ! Most people are burying their heads in the sand on this one . But, watch out because the reckoning day will come and may bankrupt BSX. That is the risk they are taking by selling Taxus stents. Good luck longs!

    • It is unusual, and not the historical standard for (honestly reported) DES trials like Sirius. It is a pretty clever trick on BSX's part to make the TCT data look better than it actually is. i.e., if a patient came in on day 275 after their stent, had a 70% blockage and got another angioplasty., this would NOT have been counted as a TLR or MACE at the TCT presentation. Clever manipulation of the data, among a number of other tricks (now coming to light) employed to get a "WOW" for the analysts and less informed cardiologists listening. Similar to the dishonest reporting of Taxus 2 etc. Sheds some real clouds also over the integrity of the Principal Investigators !

    • Look at the diabetic patient numbers....28...even Marty Leon stated at the TCT that those are not nearly enough patients to make that kind of determination.

    • I thought the question at issue (given the topic of this thread) was whether, if BSX is thought to infringe, a court might not grant an injunction because it would hurt the public.

      I never said JnJ was hurting people's health. Quite the contrary, I said that both stents are incredible advances in our ability to treat the #1 cause of death in this country. My point was that if JnJ can not supply the stents in sufficient quantity and BSX has a great product, too, an injunction might be hard to justify.

      The market agrees with me. Patent law is not my area of pracice, but I am sure there are true experts looking at this situaiton and advising those people with lots of money (institutional investors, etc.). If there was really a significiant chance of BSX being shut down completely, this stock would have plummetted when the appeals court made that last ruling.

      And, if you believe the "law is the law" and there are no shades of grey, I beg to differ. The law is a living thing and, consequently, ITS ALL GREY.

    • Foolish... and others�

      Not to be too critical but I really have no background understanding as to where "www. trends-in-medicine" comes from.

      It is not a listed company, their publishers are not known, they have no affiliates stated, etc...

      PCR and TCT, however, are known. Can you list the related article from the PCR or the TCT sites? They are credible and would help acceptance.

      www.Trends-in-medicince could easily be a distorting site for disinterested parties. IMHO.

      With regards to the comment about appreciable amounts of Taxol being found in the blood compared to sirolumus (sp??), I believe that we are speaking of a few micrograms total released verses a total released of a few milligrams.

      A one thousand fold difference. (Am I wrong?)

      Considering the amount of blood in a body, I would find it quite difficult to find a little bit of a few micrograms of Taxol in the blood supply detectable. But a few milligrams of Sirolumis may be detected. If either is not detectable, that is another story.

      But... remaining Taxol locked in the polymer - A quandary. When is it released? Is it released? I don't know.

      But... the experts in Europe and Canada (Much more qualified than I) do not see it as an issue as it is selling and there are no hints or rumours that is to be pulled from the market.

      With that in mind, I can't see the FDA using this as a point to stop the BSX coated stent. One would hope that Europe or Canada would have raised the alarm first since it is on sale there.

      If I am wrong, please let me know. Do the doctors in Europe and Canada not care? Are they not as educated as their peers in America?

      There must be a reason whey people post doom and gloom about the BSX drug coated stent : outside of investment gain.

      Myself; I see a good BSX product � and a good JNJ product. There are two suppliers that will soon be fighting for market share.

      Oh� An Injunction on BSX � Haven�t a hope. The world benefit is quite high.

      I would appreciate comments - Hopeully good !:)

    • I agree with you.

      If J&J does win the patent litigation, they should settle for a percent of BSX stent profits, and continue to compete with BSX in developing new and better stents.

    • Addendum:

      Assuming TAXUS IV results were manipulated in the manner described, and the FDA realizes the shortcomings in the data - what then?

      Would they not look at the data merely to see if the product was approvable? i.e. if the fairest interpretation of the data shows Taxus to be better than a bare express2, does it matter how much better, as far as getting FDA approval?

      I'm not sure the FDA would take it upon themselves to publicly suggest the data be presented differently.

      I say this largely because of what came out about COX-2 inhibitors (Celebrex and Vioxx) recently.

      The CLASS study (Celebrex) published in JAMA reported only the first (more favorable) 6 months of two longer trials spanning 12 and 15 months respectively. The FDA had the longer term data, but without the persistant digging of some data watchdogs this would never have come to light.

      Similarly, the VIGOR trial (Vioxx) omitted reporting overall adverse serious events to anyone but the FDA - and yet this is where the greatest criticism of the product can be found (overall adverse serious events were higher, even though GI events were lower). Again, if nobody had been digging for the data, it would not have come to light.

      If manipulation is there, I don't think it's a given the FDA will comment on it publicly.

      That evaluation / criticism may have to come from elsewhere in the cardiological community.

      If anyone wants more detail on what I was saying about Celebrex and Vioxx you can find it at the following link.

      http://www.ti.ubc.ca/pages/letter43.htm

    • Unfortunately the concept that the Express is more deliverable than Bx does not hold up to scrutiny from the trial data. In Sirius and new Sirius (small vessels, diffuse disease, ref vessels about 2.5-2.6 mm) the primary success rate in delivering Bx was 98.3%. Let's compare this to the primary delivery success for much easier lesions in the Wisdom Registry (essentially single stent, 2.9 mm ref vessels) with Express (success rate 92.5% !!) or success in Taxus IV (also bigger vessels and easier lesions) with success rate of 97%. This concept that Express is "more deliverable" just does NOT hold up to scrutiny of the real world data. It is more BSX BS spin. Sorry !

    • I agree with everything you said.

      The reason I am not buying BSX is because of patent and FDA concerns. The down side is huge - upside minimimal.

      If you really want great value and still play the stent game, SRDX is the answer. It is way way undervalued just now.

    • inv91765 writes: "Deliverability is and will always be an issue for any product. Sometimes the patients anatomy makes the difference, sometimes it is the product"

      What BSX has going for it is the Maverick delivery platform. It is an excellent catheter that Drs. really love. The base stent, Express2, is actually very poor in terms of "deliverability". I have compared several competitors and "no names" in bench testing and Express does very poorly in terms of how it "bends" and moves through anatomy. It's also very thick and bulky (again, comparatively). In my studies, when Docs say they like the feel of Express, they mean the delivery system. The stent itself is definitely ho-hum for such a "savvy R&D" co. If another, move flexible stent was put on Maverick, watch them dump on Express 2 (and Taxus).

      "...if it was your mother on the table, and a Cypher could not deliver, would you rather have her have a non DES stent?"

      Personally, I wouldn't put any DES in my loved ones. IMO, DES has been rushed already and I wouldn't have them be guinea pigs in return for an incremental gain in potenital restenosis risk. I have too many questions and have talk with too many Drs. with bad DES experience. Bare stents are MORE than adequate and have 10+ years of baseline data.

      You go ahead, though.

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