1) Boston is too heavily concentrated in stents; too dependent upon the one revenue stream. 2) The stents are failing at a high rate and Boston will be sued for the failures. 3) The patents protecting the stents are weak. 4) They stole the technology from Medinol, anyway, and will lose that lawsuit, devastating the company. 5) They are losing market share to a superior stent made by JNJ.
And my personal favorite
6) Stents are old, crude technology and will be eclipsed by new technology.
but you forgot 7) insiders selling like crazy. 8) chart looks disasterous.
Risks Investment risks particular to Boston Scientific include: ➤ Reliance on a single product line. The expected performance of the TAXUS stent in 2005 means that 40% of sales and 50% of EPS will come from a single product line. No other large-cap med tech company has this level of sales and EPS concentrated in one product line and recent data has led to questions about the safety profile of this stent. ➤ Department Of Justice investigation. Boston is still the subject of an ongoing DOJ investigation relating to manufacturing changes to the NIR stent that occurred in 1998. This investigation should heat up later this year and could result in criminal charges and/or a hefty settlement. ➤ Patent risk surrounding the TAXUS stent. There is also risk of an injunction against TAXUS Liberte. ➤ Competitive ASP pressure in the DES market in excess of our forecast. We expect US DES ASPs to decline by 5% annually through 2008. Primary DES competitor JNJ is larger and better capitalized and has already been using price to win back DES market share in the US.
Attorney general about to slap some more millions off the bottom line; major losses patent cases (NIR, Express, Taxus and Liberte), chance of injunction against Liberte (both bare and taxol when that gets approved), reversal of injunction in Netherlands; major Medinol loss upcoming; likely loss (buy all analyst opinion; even GS) on Ding case; Aug. hearing likely to hit with willful treble damages; BSX dropping stent prices quickly to try to keep from continuous loss of DES market share (now estimated at 52% (down from 70% and still falling).