Boston Scientific Corporation (BSX) has received approval from Health Canada for its Blazer Open-Irrigated, radiofrequency ablation (“RFA”) catheter. The product would help in addressing conditions like atrial fibrillation, atrial flutter, ventricular tachycardia and other supraventricular tachycardias. The company plans to launch the product in Canada immediately. While Blazer Open-Irrigated Catheter is CE Mark approved, it has yet to receive approval in the US.
Atrial fibrillation is a rapid irregular rhythm affecting the upper chambers of the heart. Patients treated with anti-arrhythmic drugs often experience adverse side effects. In such cases, cardiac ablation with an RFA catheter is increasingly being used.
Revenues from Boston Scientific’s Electrophysiology business during the latest quarter were $36 million, unchanged on a year-over-year basis. The company experienced growth in Inter Cardiac Echo (ICE) products and also impressive sales of the recently launched Blazer Open-Irrigated Catheter in Europe.
Yet, the challenges at Boston Scientific’s core segments consisting of stents and defibrillators do not show any sign of near-term abatement. The company continues to experience pricing pressure in the US and Europe. Additional challenges are softness in procedural volume due to economic uncertainties and competitive product launches. This has affected other players in the MedTech sector as well, such as Medtronic (MDT) and St Jude Medical (STJ).
To revive its Cardiac Rhythm Management (“CRM”) business, Boston Scientific has of late decided to acquire privately held, California based Cameron Health for an upfront payment of $150 million. This deal will provide the company with a novel defibrillator, the S-ICD system, the world’s first and only commercially available subcutaneous implantable cardioverter defibrillator (“ICD”).
Despite the various headwinds currently at play, product launches made in the recent past should provide some cushion to its top line. Several other products are slated for launch over the year, which should benefit the top line.
We have a Neutral recommendation for Boston Scientific. The stock retains a Zacks #3 Rank (“Hold”) in the short term.
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