Boston Scientific Corporation (BSX) has strengthened its stent portfolio in Europe with the CE Mark approval and subsequent launch of Innova self expanding bare metal stent. The stent is designed to treat peripheral vascular lesions in arteries above the knee. Mauro Gargiulo, physician at Sant'Orsola-Malpighi in Bologna, Italy considers treatment of arteries above the knee to be difficult. This is because the anatomy of this region can lead to stent fractures and higher restenosis rates.
The launch of the Innova stent will be of immense benefit to several patients as, according to estimates in Europe, Peripheral vascular disease (“PVD”) affects 13 million people or one in 20 people over 40 years old. PVD results from a build-up of plaque in one or more of the arteries of the legs. As the disease progresses, plaque accumulation may significantly reduce blood flow through the arteries, resulting in pain and increasing disability.
Boston Scientific is continuing patient enrollment in the SuperNOVA clinical trial to support its application for US approval of the Innova stent. The trial expects to enroll up to 300 patients at 50 sites in the US, Canada and Europe, and is expected to be completed in the first half of 2013.
Although Boston Scientific continues to witness various headwinds in its core segments of stents and defibrillators, the company is working on portfolio expansion. The launch of Innova in Europe is one such step of the company. Other players in the medical devices space such as Medtronic (MDT) and St Jude Medical (STJ) are also resorting to various alternatives to revive their top line.
The earlier-than-expected approval of Promus Element in the US (in November 2011) followed by its approval in Japan and Canada, both in March 2012, should boost drug eluting stent (“DES”) sales. We are also encouraged by the launch of Ingenio and Advantio pacemakers and Invive cardiac resynchronization therapy pacemakers in Europe in April 2012, followed by FDA approval in May 2012.
Some of the other significant products in the pipeline include the fourth generation Synergy DES (CE Mark expected in late 2012 with full launch in 2013) and Vercise deep brain stimulation program for the treatment of Parkinson's disease. Both these technologies are expected to contribute to revenues from 2013 and incrementally in 2014.
We have a Neutral recommendation on Boston Scientific. The stock retains a Zacks #3 Rank (hold) in the short term.
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