Medical device maker Boston Scientific
A stent is a wire mesh that keeps open surgically cleared arteries. One of the limitations of bare metal stents is that 30% of patients develop scar tissue that can cause re-blockage. Boston Scientific sells a drug-coated stent in Europe that limits this scarring from occurring.
The future for stents is bright. Boston Scientific believes its 2005 stent market opportunity is 50% of a $5 billion market. When you have total sales of $876 million in the latest quarter, this potential is a rare opportunity.
The Taxus drug-coated stent achieved a number of milestones in the latest quarter. Sales were up 100%. European sales exceeded those of the only other drug-coated stent on the market -- Johnson & Johnson's
Taxus, unlike Cypher, is not sold in the U.S. An FDA advisory panel review is scheduled for November 20. With a panel recommendation, full FDA approval could be expected in the first quarter 2004 according to the company.
The news is not all good for Taxus. J&J has raised patent issues and is seeking an injunction in U.S. District Court in Delaware. Guidant
However, where J&J and Boston Scientific go head-to-head, Boston Scientific wins the market-share battle. Boston Scientific sells its product for less and claims it is easier for doctors to use.
With sales last year of $3 billion, and its business expected to grow in the mid-teens without the U.S. coated stent market, there's a lot to like about Boston Scientific. But the potential of $2.5 billion in drug-coated stent sales in 2005 will likely propel the stock higher still if FDA approval is granted early next year.
Those looking for a riskier way to play this possibility might consider pharmatherapeutics company Angiotech
W.D. Crotty owns Boston Scientific and had a cardiac catheterization yesterday. His doctor and attending nurse, both J&J shareholders, were amused to be using a J&J Cypher stent. Questions and comments to HawaiiFool@hawaii.com.