FDA Takes Issue With Boston Scientific

Boston Scientific (NYSE: BSX  ) has until later this month to respond to an FDA letter, prompted by the company's failure to disclose two of five deaths in a stent trial that the medical-device maker abandoned in 2006.

The letter is another PR black eye for the company, but it should not have a substantial impact on the stock, since the trial has long since been discontinued.

With Boston Scientific's stock price down more than 20% since the beginning of the year, this has not been the year investors had hoped for. And the company faces an even bigger dilemma: the corporate warning letter that the company received from the FDA in January 2006, relating to compliance issues at various facilities. Boston Scientific noted yesterday that it's headed in the right direction to close out this issue, but does not expect to resolve the matter until 2008.

The problem with this timing -- for the company and its shareholders -- is that competitor Medtronic (NYSE: MDT  ) is projecting that it will win approval for its Endeavor cardiac drug-coated stent in the U.S. as early as the end of this year. That could beat out FDA approval of Boston Scientific's promising drug-coated Taxus Liberte stent, which could be stalled pending the resolution of these warning letters. Aside from Boston Scientific, Johnson & Johnson (NYSE: JNJ  ) is the only other company presently offering a drug-coated stent approved for use in the U.S.

Boston Scientific now trades not far above its 52-week low. I'm not convinced that it's a bargain, though. At this point, I'm inclined to wait until its sales trends improve, and to see whether it will be able to bounce back from these FDA rebukes and push Taxus Liberte to market before Medtronic wins approval for Endeavor.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 536538, ~/Articles/ArticleHandler.aspx, 10/26/2014 6:03:48 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement