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Boston Scientific Corporation Message Board

  • feewasabudistprodigy feewasabudistprodigy Aug 6, 2004 4:42 PM Flag

    Quote from Dr. Eric Topol

    Yet another recall was quite predictable," said Dr. Eric Topol, chairman of cardiovascular medicine at the Cleveland Clinic, one of America's top heart centers.

    "There will be more and the problems -- which go beyond lack of balloon deflation to catheters that are difficult to pull out despite a deflated balloon -- persist," he added.

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    • < mba investor, I'm not sure what your interest in BSX is then, you're not long BSX? As for SRDX, it looks like most of the long term tech indicators are either neutral or turning bullish on them. >

      The BSX board has occasionally good discussions on stent architecture and performance. That's primarily my interest here although I have made a few short-term option trades on both sides of the fence. I can't be long or short at the moment due to the uncertainty.

      SRDX is a specialty chemistry company that makes the drug-eluting polymer for the Cypher stent and is working on future versions.

      Stents are only the beginning of a convergence between drugs and medical devices. Surmodics coatings make devices more slippery, able to elute drugs / drug packages, more implantable in the body, etc. They have a pipeline of over 100 devices - and much of their R&D work is paid for by clients.

      One of the downsides to the company is the extreme confidentiality needed to protect their clients and this frustrates the analysts who want precise EPS estimates. Nonetheless, SRDX is a company with millions in cash, no debt, nice cash flow (royalties are almost pure profits), and lots of good stuff in the pipeline.

      Why would cardios continue to use Taxus if there was a chance of non-deflate (even if that chance was extremely small)? It seems like the benefits of easy delivery do not outweigh adding risk to the procedure.

      Also, could you address availability of Cypher in your lab? The speculation I have heard is: 1. Cordis is ramping up Cypher at the expense of yield so they can supply anyone who needs the product and 2. Cypher supply is being routed to the largest / best / most prestigious hospitals first.

      It would be very material to know that status of Cypher supply / availability. #3 Speculation is they may even delay their Japan launch / monopoly

    • This all hinges to me on the fact that the second recall was merely due to clerical error, not finding a NEW problem. Somebody screwed up in logistics.

      Had there been a second recall from new problems I wouldnt touch this stock with your ten foot pole....but that isnt the case.

      The point I make is, the market will in several weeks wake up to the fact there were no new issues of concern with the second recall and the stock will advance. Like another guy here wrote, the economy may be bad but people still pay for stents and medical devices as heart problems dont drop in number with the stock market.

      This stock will likely see support at 30 IF it does drop with the market, but barring more problems I cant see it below 40 in a month or two.

    • "Yes, another recall I sell and short the hell out of it, but I highly doubt its in the cards."

      That's what was said after the 2nd many does it take?!?

    • It looks like Yahoo cut-off my post. This was the rest.

      MER is trying to send a clear signal to traders that they have practically no clue about the outlook for the remainder of the year IMO. Anyone who trades for a living knows that utilities are the safest, slowest, 'most inelastic' sector in the entire market. I agree with most of what you said about general mkt conditions, but BSX is still a manufacturing concern, and ALL manufacturers are affected by higher energy costs. That's the fact. As for a 'flight into economy-insensitive stocks', utilities are about as 'insensitive' as you can get.
      I'll continue this later...

    • I'll use one post to respond to those who responded to my post.
      bbsh, fair 'nuff. This would definitely be a stock worth betting the farm on IMO. I just happen to think you're a tad early in placing your bet. My gut feeling is there's still some shaking out to be done yet before the stock begins making upward progress. You might want to stay in cash until at least mid-quarter. Just a thought. Also, if you can't be ahead of the crowd at least go with the trend. Right now it seems a lot of money is still trying to exit. If you insist on going against them you might get trampled on.
      mba investor, I'm not sure what your interest in BSX is then, you're not long BSX? As for SRDX, it looks like most of the long term tech indicators are either neutral or turning bullish on them. Beyond that I know nothing about them. Good luck with them.
      (With some luck maybe your sister could pick some 'golden' mufflers.)
      sure67, concerning stents, let me just say I've learned more about them than I ever cared to know in the past 2 weeks.(I certainly qualify as a non-medical type.) Also, I've already said that I care less with what the doctors think than with what the shareholders think. My gut tells me that the market still hasn't seen closure on the recall. Even in spite of the recall, I firmly believe the stock would have sold off during it's most recent earnings report. The stock has been treading water for at least the past four months. A sell-off could have occurred even without the recall IMO. That's the nature of the market. You are correct about my using TA in trading. I use both fundamental and technicals in evaluating stocks. I do not see a strong case for shorting BSX on fundamentals. My trading instincts tell me that there are downgrades coming, as well as reduced earnings estimates, (further recalls and lawsuits I'm not so sure about), but that's not always sufficient to short IMO. On technicals however, the stock cannot be considered a strong buy just yet. Take a look at this Yahoo chart:,m50,b&a=m26-12-9&c= This is a weekly chart (it's not a very good one, but it shows some of the things I've been saying.) At the very least, you should see that the stock has broken it's long term uptrend. (I use moneycentral on MSN normally to evaluate technicals.) The market 'always' overreacts, that's the nature of the market. As for this being a "short-term blip", that depends on your usage of "short." My experience tells me that this stock will take the rest of this quarter to recover, at the very least. Large caps do not recover from a slam in a couple weeks. They usually take quarterS to recover. In the long run TAXUS may reclaim the dominant share, but why add to your position on the downside of a correction? I suppose if you can afford to tie up your money that way go ahead, it's your choice. Personally I prefer to add to a position that's on an uptrend, not on a downtrend.
      Finally, your comments on the economy are 'fairly' accurate IMO. But read this story first:
      Note the sentence on pg 2: Merrill Lynch named utilities its "favorite" sector and said it should be "significantly overweighted."
      MER is trying to send a clear signal to traders that they have practically no clue about the outlook for the remainder of the year IMO. Anyone who trades for a living knows that utilities are the safest, slowest, 'most inelastic' sector in the entire market. I agree with most of what you said about general mkt conditions, but BSX is still a manufacturing concern, a

    • gilligan:

      your point is well-taken -- MDs aren't better at picking stocks in general or timing the market. However, with regard to BSX and the specific issue of the TAXUS stent, physicians (or at least cardiologists) may have what I'll call an "information advantage."

      For non-medical types, the initial reaction to bad news such as the recall has appropriately been to sell immediately and consider buy back when the dust settles and there is more certainty in the ultimate outcome of the recall in terms of use/regulation of the stent. For a cardiologist who has been using the product and also who has a sense of how his colleagues feel about the device and the recall, there may be cause for more optimism for the device and a feeling that the market's reaction to recall has been overdone based upon personal experience/knowledge not available to the lay community.

      Seems from your message that you may be a bit of a technical trader. As such you may be able to follow stock prices a lot more closely and get entry/exit points close to the lows. For me, I don't have the time or expertise to do that. I'm going to buy if I think the market is over-reacting to a short-term blip. If the absolute bottom is lower, then I'll add more to my position because of my impression, based upon personal experience with the product as well as my sense of how other cardiologists feel about the product, that TAXUS will still control the lion's share of the DES usage and the markets will eventually come around to re-affirm this viewpoint.

      Finally, I am less concerned about BSX's exposure to the dangers of high oil prices, stagnant economy, etc. than other stocks. Healthcare demand (especially cardiovascular services) is fairly inelastic to the state of the economy. People are not going to stop having angina/myocardial infarctions because of a worsening oil crisis, worsening economy, market meltdown. Even if more people lose health insurance and can't afford to pay their hospitalization costs, BSX (as well as all device manufacturers)will still get paid for their products by the hospitals. If the markets and economy start to really tank, wouldn't there be more flight of money into such "economy-insensitive" stocks?

    • << bbsh, with all due respect, what makes doctors any better at picking stocks or timing the market than anyone else here? >>

      My sister is a doctor and she has the Midas touch when it comes to picking stocks - everything she touches turns into a muffler!

      sometimes my positions are long, sometimes short, but ALWAYS greedy.

      position disclosure to all~
      I'm not short BSX. Too unpredictable in the short term - could bounce way up on FDA clearing Ireland factory then collapse the next day on a non-deflate from a non-recalled lot. Long term, I think Taxus has performance and intellectual property issues that will cause holders some "heartburn." Would recommend you purchase disaster insurance (way out of the money puts) If you don't buy it and it gets cheap I will. I am long SRDX for stents and 100 other reasons.

    • I agree with your market sentiment, it is dangerous, but if youre a full time trader you know you have to be ahead of the crowd to make money.

      This stock is solid, and barring incompetence with respect to findinbg out recalls were incomplete the stock should advance or in the least hold steady. Yes, another recall I sell and short the hell out of it, but I highly doubt its in the cards.

      Im not saying docs are great stockpickers, actually most arent...I just know many people in the know about the stent and BSX in general betting the farm now with the recent hit.

    • What is Paclitaxel?

      Paclitaxel is a naturally-occurring compound that was found in the bark of the Pacific Yew Tree (Taxus brevifolia) when the National Cancer Institute screened thousands of plant species as possible anti-cancer agents during the 60�s and 70�s. Paclitaxel is the active ingredient in the widely-used chemotherapy drug Taxol�.

      The drug works by binding to parts of the cell, called microtubules, and interrupting the biochemical signaling process that causes cell migration and accumulation. In large doses, it has significant anti-tumor properties -- it prevents unwanted cells from growing. However, in smaller time-release doses, such as those eluted by the Taxus stent, paclitaxel takes on more anti-inflammatory characteristics; that is to say, the drug seems to have the effect of regulating, but not completely eliminating, cell accumulation.

      This characteristic is important in striking a crucial balance. While significant accumulation of cells around and inside the stent can clog the interior channel and cause restenosis, some cell accumulation is desirable because allowing a thin layer of endothelial cells to accumulate on the inside of the implanted stent forms a smooth cover, incorporating the device into the artery itself. This process is called endothelialization and is important in preventing the complication of thrombosis (blood cells reacting to a foreign object by clotting and blocking the artery).

    • fyi, Dr. Stone has publicly stated that Taxus performs worse than Cypher on late loss because of the "healing" properties of Taxol - in other words he believes the vessel with a Taxus stent narrows more because the anti-cancer drug paclitaxel promotes cell growth.

      When someone can explain that one to me I will once again view Stone as an objective source of information.

      My hypothesis (non-medical background) is that Taxus performs worse because of the stent design - the "open" cell structure of the stent makes it easier to deliver but doesn't do nearly the job of drug distribution that closed cell design achieves. Simple physics are behind the differences in stent performance and patient outcomes.

      The marketing position of the two companies is thus:
      1. Taxus - Deliverability
      2. Cypher - Patient Outcomes

      Cardios have been more receptive to the deliverability argument when patient outcomes are not available (REALITY soon).

      Deliverability has carried the day for Taxus, but the situation is getting sticky.

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