(BSX) Boston Scientific Corporation’s Interlock Launched in US and Europe

Leading medical devices player, Boston Scientific Corporation (BSX) recently announced the commercial launch of its Interlock – 35 Fibered IDC Occlusion System in the US and Europe. Earlier this year, the company received approval from the US Food and Drug Administration (FDA) and European CE Mark for this Interlock system.

Boston Scientific claims that the Interlock system is the best-in-class peripheral vascular coiling technology, which successfully combines with the company’s market-leading Interlock Fibered IDC Coils. It offers a comprehensive range of options to treat peripheral vascular embolizations to the interventional radiologists.

Although Cardiovascular is the biggest segment at Boston Scientific, it has been facing several challenges such as pricing pressure and lower penetration rates for the past few quarters. During the first quarter of fiscal 2011, revenue from Cardiovascular declined 5% year over year (7% down at CER) due to an 8% drop in Interventional cardiology ($635 million).

However, this was partly mitigated by a 7% increase in Peripheral Interventions ($176 million). Peripheral Interventions portfolio consists of stents, balloon catheters, sheaths, wires and vena cava filters, which are used to diagnose and treat peripheral vascular disease.

Additionally, in February 2011, the company announced the acquisitions of S.I. Therapies and ReVascular Therapeutics, which expands the portfolio with a reentry catheter and intraluminal chronic total occlusion crossing device that enables endovascular treatment in cases that typically cannot be treated with standard endovascular devices.

We continue to remain concerned about Boston Scientific’s core businesses, Cardiovascular and Cardiac Rhythm Management, which are witnessing significant pricing pressure and loss of market share. As per the restructuring plan announced in early 2010, the company has started integrating both the segments into one group called the Cardiology Rhythm and Vascular (CRV), which includes an Endovascular unit encompassing Peripheral Interventions, Imaging and Electrophysiology.

Moreover, the company expects to launch several new products in the coming quarters, which should revive the business to some extent. Several acquisitions were made in the recent past to target the areas of unfulfilled medical requirements. We are currently Neutral on the stock.

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