people covering this sector on stents say bsx will recover.why would a patient use a stent
that has deflation problems and gamble with his or her life.in medicine people are always looking
for the best of medicines,and medical procedures thats out there.when anyone is
stareing the grimm reaper in the face and flurting with death,you want the best chance
of staying alive that's just human nature,
what ever the cost,thats just the way it is.
US Recall, it has gone better than expected. Recall process is 100% complete. 1200 accounts. 40k units shipped to replenish. 97% of accounts restocked w/in 48 hours. No problems in distribution w/in US - no disruptions to labs using the stent.
So sorry craterfix and gonemaroon. No, wait, not sorry. All cratrfix does is prophesize what WILL happen as if he is the Wiz of Oz. gonemaroon simply clueless.
Those that are saying that the JNJ limited account Cypher stocking is rumor are uninformed. This is a fact and continuing.
Elitecrete - was looking at the replies re: pebble's link to Merrill's BSX holding. No I don't have more recent data. The point is that this nut case pebble says at the end of Friday's rally "don't believe that head fake by Merrill" and he backs it up with a data from nearly 5 months ago! Anyone who is aligned with that jackass or pays ANY attention to his posts are, well, in his company.
craterfix, gonemaroon, remind us: why do you need Guidant's help?
Good luck on the buy - you balance the risks and rewards and go forward. Listening in to the conf. call now - EPS would have been $0.51 w/o the taxus recall impact...$0.06 recall impact, $0.01 impact of Adv. Bionics acquisition = $0.44 net. Additional R/D costs and acquisitions = another $0.08 charges, gives you as reported $0.36 GAAP.
Gross margin = $0.75. Free cash flow of over $500 million. EBITDA $569 million. Coronary stent sales = $600 million worldwide in the quarter. Massive cash machine, eh?
Recall status: Company thought they could quickly execute the recall; RE US Recall, it has gone better than expected. Recall process is 100% complete. 1200 accounts. 40k units shipped to replenish. 97% of accounts restocked w/in 48 hours. No problems in distribution w/in US - no disruptions to labs using the stent.
Business perspective: Turmoil in the market caused by recall, 954 accounts placed continuing orders w/in the last 5 days; 55% market share held within the last 5 days, considering the circumstances, company is satisfied. Cap on order quantities in place so labs wouldn't 'stock' the stent - over $6 million per day in sales still strong. Demand on Friday (single data point FWIW) = 87% of normal pre-recall demand.
Why am I tranposing this for you?
Nice analysis regrading the questions that directly tie into the risk of owning Boston Scientific. My only contribution is the current status of JnJ's inventory and FDA coupled with the certainty of no competitor becoming a serious threat in two years, I have selected to buy. (Actually did on Friday 3k shares). This investment appears likely that it will pay off in double didgits in the next 12 months and is worth the risk.
From the Friendly folks at Bear Stearns, specifically analyst Rick Wise:
"Boston�s 2Q04 results to be announced this morning aren�t like to be a major driver for the stock in our opinion. The quarter should be basically fine. Sales should be up 65%-plus even taking the recall into account. Baring something unexpected, we would be surprised if investors are seriously focused on Boston�s second quarter performance. Information that suggests potential resolution of the many uncertainties surrounding TAXUS DES stent are key to getting the stock moving back up again.
The most important thing on today�s call will be whatever update we will be given on a number of key TAXUS DES-related issues. Among many other questions for Boston, here are some that seem particularly relevant:
1) Is US TAXUS swap out at cath labs complete?
2) Is OUS swap out on track?
3) Has FDA inspected and "blessed" recall scope? What is the risk of recalling the rest of the older, pre-fix inventory?
4) Are doctors regaining confidence (i.e. using) in TAXUS again�and at what rate? Are there any price implications of getting doctors to use the product?
5) Where will US 3Q and 4Q DES penetration be assuming all goes well?
6) Have there been reports of additional performance problems with either the newer post May 2 production stents or the old TAXUS stents?
7) Is the "sticky balloon issue" really an increasing problem? Are doctors switching back to Cypher or bare metal stents because of the issue?
8) Will BSX change 2H guidance in some way due the challenges of the past weeks?
Our inclination is to be a buyer of BSX here given the valuation and the possibility of a positive resolution---or at least lessening---of the current DES complications. We would suggest averaging down on further weakness, or averaging up as the news became more encouraging. "
Disclosure: Long some waaaaaay outta the money calls, thinking about seeing how she plays the game this morning, whether or not we get answers to some questions...maybe buying a little bit more soon. (on the bright side, XL getting an upgrade this morning.)
If the rumor of 400 accounts is dead, why is it that so many accounts can not order? Why is it that they can not replace inventory that is out of date? Why is it many GDT reps are talking about a split of ways...? BSX recalled and replaced the units.....Yes some confidence was shaken... but if JNJ has done the same in the Carotid study, meaning not just protocal violation, but production changes, poor documentation, then if they do have an actual production problem... what would a whistle blower receive...They would get what is it 6% or 8% of the damages.... Tomorrow may be interesting, but the next few weeks will be very revealing...JMHO
Good math. Good questions. Easy answers.
Sure 50 shares short at $35 would be $1750 if the stock went to $0. Come on, you are smarter than that.
Long term outlook. What, I can't have short and long term positions.
Holding 4000 shares. sold 8000 above 40. Two new houses FYI.
Have multiple leaps with varying strike prices.
You are right that the 120 Aug 40 calls are small in comparison. However, a couple of $2-3 pops and I have 4 weeks. HMM.. funnier things have happened.
There is not one person interested in BSX (Shorts are just as interested as longs) that would take a 10 year short vs a 10 year long position. Shorts are short term. Make your cash and move on to the next deal.
Either way tomorrow should be fun!!
"The thought leaders in Europe have largely acknowledged the gross inferiority of Taxus."
What happened to Widely Reviled, now it's down to "thought leaders have LARGELY", sounds like back pedalling to me.
"That will be very clear from the randomized REALITY trial" How do you know what the trial that isn't complete, will prove? Best guess?
100% of the Docs I have polled own shares in BSX, that's true whether you choose to like it or believe it.
<< Easy double on the 120 Aug 40 Calls I bought for .15 >>
<< If you are long then you have 10, 20, 30 or more years. I like the long term outlook. >>
Why buy short-expiration calls if you like the long term outlook?
<< That little boy either has never carried a "bag" or has 50 shares short and wants to make a couple of bucks. >>
Let's see, 50 shares short @ $35 = $1750.
Your 120 Aug 40 calls @ .15 = $1800.
What makes you the 800lb. gorilla?
Absoultely everything in the post is true, whether you choose to like it or believe it. If BSX HAD 53% in Europe (actually lower) it was ONLY because they were selling it at a 30% discount in Europe (HIGHLY price sensitive market). The thought leaders in Europe have largely acknowledged the gross inferiority of Taxus. That will be very clear from the randomized REALITY trial and was seen in the early results from the randomized Swiss trial with 15% MACE at 9 months for Taxus and 5% for Cypher. It is NO CONTEST!!