On Friday, Don Crotty pointed out that Boston Scientific's (NYSE:BSX) new Taxus claims a 75% share of the rapidly growing drug-coated stent market. In fact, the $2.5 billion in Taxus sales expected for 2004 exceeds the company's $1.9 billion in U.S. sales last year. Full-year earnings are expected to more than triple to $1.75 per share.

But don't think management is resting on its laurels. This morning, Boston Scientific announced the acquisition of privately held Advanced Bionics for an initial payment of about $740 million in cash, plus certain milestone payments in the future. The acquisition, expected to close within the next few days, expands Boston Scientific's reach into the implantable microelectronic device market.

Advanced Bionics has developed implantable microelectronics to treat a variety of neurological disorders. According to Boston Scientific, the worldwide market in 2004 for neurostimulation devices is expected to be around $1.6 billion, growing to approximately $3.8 billion by 2010.

Boston Scientific expects the acquisition to reduce 2004 earnings by $0.04 per share, and 2005 earnings by $0.06 per share. Meanwhile, Advanced Bionics is expected to contribute $82 million in sales this year and $128 million in 2005. Advanced Bionics' product line includes its cochlear implant, Clarion, that helps restore hearing, as well as a recently approved spinal cord stimulation system to treat chronic pain in the lower back and legs.

In recent days, Boston Scientific has hit new highs on the strength of its stent sales for which it competes with Johnson & Johnson's (NYSE:JNJ) Cypher stent. The stock got another big boost last week on a potential delay in the approval of Guidant's (NYSE:GDT) drug-coated stent, as well as an adverse reaction to the data released on Medtronic's (NYSE:MDT) stent earlier in the week.

Taken together, those bits of news could mean that Boston Scientific will own an outsized piece of the market for a little longer than expected. And that's big, considering that the company counted a mere $615 million in cash on its balance sheet vs. $1.68 billion in debt last quarter, with less than $500 million in trailing free cash flow.

But a lot of that is changing. And the fact that the company is taking advantage of its stent success to expand in other areas is just one more reason to keep an eye on Boston Scientific.

Discuss the latest deal with other investors on the Boston Scientific discussion board.

Fool contributor Jeff Hwang owns none of the companies mentioned above.