Keeping in line with its strategy of emerging market expansion, medical device giant Boston Scientific Corporation (BSX) introduced its lead-free subcutaneous implantable cardioverter defibrillator (S-ICD) in the Asia Pacific market. Recently, the first implant of the S-ICD was performed in Hong Kong.
The acquisition of Cameron Health in 2012 has given Boston Scientific access to the S-ICD system. The S-ICD system is the world's first and only subcutaneous implantable defibrillator that provides protection from sudden cardiac arrest (SCA.V) while leaving the heart and vasculature untouched. It is the least invasive implantable defibrillator available globally and substitutes the transvenous implantable cardioverter defibrillator (TV-ICD) that requires leads to be placed in the heart.
Though this system is commercially available in Europe and has received the U.S. approval in 2012, it is yet to create its foothold in the densely populated Asia market. With recent data showing almost a 2 million unprotected population in Asia Pacific at risk of SCA, we expect S-ICD, once marketed, to capture a solid grasp over this untapped market.
Against the backdrop of flattening or declining sales growth in developed markets like the U.S. and Europe, Boston Scientific is gradually strengthening its presence in the emerging markets with countries like Brazil, Russia, India and China (:BRIC) recording over 8% growth on a combined basis during fiscal 2013.
An important aspect of the company’s growth strategy is to continue pursuing development opportunities outside the U.S. by expanding global presence, inclusive of the emerging markets. Recently, Boston Scientific created a new Asia-Pacific regional organization to further increase capabilities and strengthen its position in this fast-growing region.
Boston Scientific plans to invest approximately $150 million in China – one of the world’s fastest growing and largest medical devices markets, over the next 5 years to build a local manufacturing operation to cater to Chinese market needs and develop a training center for healthcare providers. According to the company, emerging markets should experience accelerated growth as it expects sales therein to increase from 8% of total sales in 2013 to 15% in 2017.
Currently, Boston Scientific carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader healthcare industry are Enzymotec Ltd. (ENZY), St. Jude Medical Inc. (STJ) and Covidien plc (COV). Enzymotec sports a Zacks Rank #1 (Strong Buy) while St. Jude Medical and Covidien carry a Zacks Rank #2 (Buy).