BSX Evolves with EVOLVE Trial - Analyst Blog

Recently, Boston Scientific Corporation (BSX) completed its enrollment for the EVOLVE trial, which is meant to evaluate its fourth generation Synergy coronary stent. Patient enrollment had begun in late July 2010. The trial will compare Synergy with Promus Element everolimus-eluting coronary stent in patients with a single de novo native coronary artery lesion.

The study enrolled 291 patients across 29 sites in Europe, Australia and New Zealand. Favorable data from the trial could enable the company fetch CE Mark approval.

Although Promus Element received CE Mark approval in October 2009, it is yet to receive approval in the US. Boston Scientific expects to launch the Promus Element stent in the US and Japan in mid-2012. Cardiovascular is the largest segment, accounting for approximately 40% of revenues.

Revenue from this segment declined 8% year over year to $781 million in the third quarter consisting of a 10% decline in Interventional cardiology, partly mitigated by a 2% increase in Peripheral Interventions.

Boston Scientific's global DES market share declined 4-percentage points (annually) to 37% in the third quarter due to pricing pressures partially offset by increased penetration in Japan. Market share in both US and EMEA declined.

However, the company is encouraged by the increased market acceptance of Promus Element in Europe and notes that the success of Promus Element and the Taxus platform drove 90% of its DES product mix in EMEA. We believe successful commercialization of the Synergy coronary stent will enable Boston Scientific to strengthen its DES product portfolio in Europe.

Recommendation

Boston Scientific continues to focus on strategic initiatives to drive growth and profitability. The company has laid down several strategies such as expanding its product portfolio and selectively reinvesting in the business.

So far, Boston Scientific has made progress by restructuring, reducing debt and consolidating the business. Moreover, the company has made some significant acquisitions in the recent past which should boost its top line going forward. However, the company faces tough competition from players such as Medtronic (MDT), St. Jude (STJ) and Johnson & Johnson (JNJ).

We are currently Neutral on the stock.

 
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