UPDATE: Boston Sci's Promus Element Stents Approved In Europe
(Adds analyst comments, updates share price, starting in fifth paragraph.)
By Jon Kamp
Of DOW JONES NEWSWIRES
BOSTON -(Dow Jones)- Boston Scientific Corp.'s (BSX) Promus Element heart
stents have been cleared in Europe, giving the company a product it needs there
to replace one it will soon lose because of an expiring agreement with Abbott
Laboratories (ABT).
Abbott makes the current version of Promus stents, which are the same as
Abbott's Xience devices, and the companies share the proceeds from Promus sales.
This agreement dates back to the joint purchase of Guidant Corp. businesses in
2006--Boston Scientific bought the bulk of Guidant while Abbott bought the
company's vascular business, including stents.
The European supply agreement for Promus devices wears off later this month,
which meant Boston Scientific faced a potential gap if it couldn't roll out a
home-grown successor in time. With the "CE Mark" authorization announced Monday,
the company will start marketing Promus Element immediately in the European
Union and other international markets that recognize that system.
Because Boston Scientific makes Promus Element, the devices will be more
profitable than current Promus stents. This should offer "a bit of relief" from
pressure on gross profit margins the company has seen, Samuel R. Leno, Boston
Scientific's chief financial officer, said on an earnings call last month.
Sales of Abbott-made stents are only half as profitable for Boston Scientific
as sales of homemade devices, noted Rick Wise, a Leerink Swann analyst who
called the Promus Element approval "an important psychological and financial
positive." Boston Scientific has long made another line of stents under the
Taxus name.
Analysts also cited some risks because Boston Scientific is launching the new
devices without releasing any supporting clinical study data.
Because of this, Lazard Capital Markets analyst Sean Lavin said he believes
Boston Scientific will lose some Promus market share to Abbott in Europe, where
Abbott has rolled out an updated version of Xience stents called Xience Prime.
Bernstein Research analyst Derrick Sung, on the other hand, thinks Boston
Scientific can improve its Promus share in Europe behind a stronger marketing
effort. The company "previously has not promoted Promus as aggressively as Taxus
in Europe due to its relatively limited profitability," Sung said.
The devices in question are tiny scaffolds for clogged heart arteries that use
medication to combat scar tissue growth that could lead to repeat procedures.
Promus Element stents are made from a platinum-chromium alloy, which Boston
Scientific said offers more radial strength and flexibility than older alloys.
The company also said the new devices have an advanced delivery system. The
stents are being evaluated in a clinical trial called Platinum, which completed
enrollment of 1,532 patients in September at more than 140 sites around the
world. This study is aimed at gathering evidence to support later U.S. and
Japanese approval.
Boston Scientific had long projected it would roll out Promus Element in
Europe in time. Meantime, the company reiterated Monday it expects to win Food
and Drug Administration approval to launch the device in the U.S. in 2012. The
U.S. supply agreement for Abbott-made devices wears off in the second quarter
that year.
Boston Scientific also said it expects European approval for its next-
generation Taxus device, called Taxus Element, in the second quarter 2010 and
FDA approval in 2011. Taxus Element is a bit delayed in Europe, the company
noted on the third-quarter call.
Boston Scientific shares edged 6 cents higher to $8.18 in recent trading.
Abbott shares were up 13 cents at $50.70.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com
(END) Dow Jones Newswires
11-02-091232ET
Copyright (c) 2009 Dow Jones & Company, Inc.
|