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Stents are metal mesh tubes used during angioplasty procedures to prop open heart arteries. Natick, Mass.-based Boston Scientific makes drug-coated stents at a division based in Maple Grove, which employs about 3,000 people locally.
The new device represents a "third generation" in drug-coated stent technology, the company says, and also a likely return to the way Boston Scientific used to profit from stent sales.
Over the past two years, Boston Scientific has seen the market share for its Taxus stent diminish because of the growing popularity for a newer product from Illinois-based Abbott Laboratories called Xience V.
The migration of customers to Xience hasn't been all bad for Boston Scientific, since the company sells a private label version of the product called Promus. But when selling Promus stents, Boston Scientific receives only a distributor's margin on the product, which analysts say is about half what the company makes when selling a Taxus stent.
With Promus Element sales, Boston Scientific won't have to share profits with Abbott, said Jeff Mirviss, vice president of marketing with Boston Scientific.
"And this is a device that we feel is better," Mirviss added, noting that the stent is made of an alloy
of platinum and chromium which he described as the "next-generation metal" for stents due to its strength and flexibility.
Another positive for Boston Scientific in this morning's announcement: The company's distributor agreement with Abbott will soon expire in Europe. So, the launch of Promus Element guarantees that Boston Scientific will have a stent to sell in Europe that is coated with the drug used on the Promus and Xience stents.
"This is an important psychological and financial positive for the company and the stock," wrote Rick Wise, an analyst with Leerink Swann, in a note to investors this morning. "Many investors had been anxious about Boston Scientific's ability to deliver an on time approval for Promus Element before the Abbott distribution agreement expired on Nov. 21."
Promus Element is not approved for use in the U.S. In this country, Boston Scientific will continue to sell Promus, although it faces a similar deadline down the road for launching Promus Element -- June 2012.
Boston Scientific shares were trading up 5 cents this morning at $8.17.
Christopher Snowbeck can be reached at 651-228-5479.
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