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The Natick, Mass.-based company's stock closed at $12.28, down $1.52, or 11 percent -- the biggest one-day decline since April 2001.
Several analysts attributed investor worries to new competition in one of the company's key product categories, drug-coated heart stents -- part of a $4 billion worldwide market. Boston Scientific has long been the market leader in drug-coated stents, tiny mesh struts that prop open clogged arteries.
The fresh competition comes from Illinois-based Abbott Laboratories, which received regulatory approval to launch a new stent called Xience in the United States earlier this month.
Boston Scientific's financial results, which were released after the markets closed Monday, do not reflect Abbott's impending surge into the market. For the quarter ended June 30, Boston Scientific reported a 30 percent decline in its U.S. sales of drug-coated stents.
The company faced another rival earlier this year in Fridley-based Medtronic Inc., which launched a drug-coated stent called Endeavor. Now a lucrative U.S. medical device market that was once dominated by Boston Scientific and Johnson & Johnson will be divvied up among four companies.
Medtronic's Endeavor stent "took a little more share than we expected," Tobin said in a conference call with analysts Tuesday. "We think that's temporary."
Abbott's new stent isn't entirely dire news for Boston Scientific. The company will sell an identical stent called Promus and give 40 percent of the profit back to Abbott, according to a licensing agreement between the two companies.
Some analysts also said investors are wondering when the Food and Drug Administration will lift a warning letter that prevents Boston Scientific from releasing next-generation stent products in the United States. The 2006 letter cited numerous problems at the company's manufacturing facilities.
Boston Scientific executives said it is difficult to predict when the FDA will lift the letter. CEO Jim Tobin said he hopes to launch a new drug-coated stent called Taxus Liberte in the third quarter, "but that's up to the agency."
Tim Nelson, an analyst with FAF Advisors in Minneapolis, said the market overreacted to the Boston Scientific news. "All the number were in range of expectations," he said.
Janet Moore --612-673-7752
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