The new guidance released by the National Institute for Health and Care Excellence (NICE) – a public body of the Department of Health in the U.K. – on use of cardiac technologies for arrhythmias and heart failure is expected to boost Boston Scientific Corporation’s (BSX) Rhythm Management business in Europe. Accordingly, the company has come forward to welcome this updated guidance and expects to work with the National Health Service (NHS) to implement its guidelines.
This updated guidance stated two major specifics. Firstly, implantable cardioverter defibrillators (ICDs) can be used as a treatment option in prevention of cardiac arrest in patients with ventricular arrhythmias (an irregular heart beat in the ventricles) as well as those who have already survived a life-threatening arrhythmia. Secondly, cardiac resynchronisation therapy (CRT) can improve life expectancy and quality of life in heart failure patients.
NICE expands its recommendations on ICDs and CRT (CRT-P with pacing or CRT-D with pacing and defibrillation) for heart failure patients who have left ventricular dysfunction with an LVEF (left ventricular ejection fraction) of 35% or less.
Each year almost 75,000 people suffer from heart failure and a further 1 million are affected by cardiac arrhythmia in the U.K. This number is only expected to grow with an ageing population. Added to that, heart failure accounts for one of the biggest hospitalization cost components in the U.K. which contributes over 5% of emergency admissions and 2% of all NHS inpatient bed days. Accordingly, with this new set of guidelines, Boston Scientific is upbeat about the fact that more patients will be eligible for the use of the company’s ICD and CRT, thereby boosting the prospects of these core segments in the U.K. health care market.
According to Boston Scientific, its current product portfolio features the world's longest-lasting ICDs and CRT-Ds, with real-world longevity projections of nine to 13 years, and the world's smallest and thinnest ICDs.
For quite a long time, the U.S. defibrillator and stent markets have remained as major overhangs. Despite several initiatives undertaken by the company to revive its top line, we remain cautious as its core segments – ICD and Drug Eluting Stent (DES) are still taking a toll on the numbers. Meanwhile, Boston Scientific is resorting to all available means in order to return to growth. To revive its top line, the company is focusing on strategic initiatives to drive growth and profitability. These include the recently announced restructuring initiatives, strengthening of the company’s portfolio, targeting suitable acquisitions in areas of unmet medical needs, and focus on the international market. We believe this new guidance by NICE will also prove itself as a material positive for Boston Scientific’s core segments in Europe.
Currently, Boston Scientific retains a Zacks Rank #3 (Hold). Some of the better-placed Medical stocks are ICU Medical, Inc. (ICUI), Cardica Inc. (CRDC) and NeuroMetrix Inc. (NURO), all carrying a Zacks Rank #2 (Buy).