Struggling medtech firm Boston Scientific has had a pretty good 2013.
It's stock is up nearly 100% to $11.44 from $5.89, and the company surprised analysts by reporting better-than-expected financial results in the second quarter.
And now, Glenn Novarro, senior analyst at RBC Capital Markets, believes that Boston Scientific's strong pipeline could contribute as much as or more than $1.3 billion over the next five years. Here are some of those products:
Lotus is Boston Scientific's answer to Medtronic's, Edwards Lifesciences' and other smaller companies' transcatheter aortic valve replacement programs to treat severe artery blockage or stenosis.
The technology came to Boston Scientific when it bought California firm Sadra Medical in 2010 in a multi-year deal valued at up to $450 million. Novarro expects that Boston Scientific will receive regulatory clearance in Europe by the end of this year.
We expect BSX to launch Lotus in Europe in 4Q13 and believe it can generate revenues of $125M+ by 2017 (includes ~$25M revenues from the US). We expect BSX to initiate the pivotal IDE trial, “REPRISE III” in 2014 and enter the market in late 2016.
Like Lotus, the Vessix product also targets a big unmet need - uncontrolled hypertension. This occurs when high blood pressure in some patients cannot be regulated even though they are taking multiple medications.
This technology was also the result of an acquisition. In 2012, Boston Scientific acquired California firm Vessix Vascular for a maximum value of $425 million.
The market is crowded with both big name firms like Medtronic, St. Jude Medical, Covidien and other smaller, private firms, but Novarro believes Boston's product will be able to garner around $150 million through continued rollout in Europe. The company is expected to launch a clinical trial in the U.S. in the first quarter of next year.
Novarro believes that the FDA will soon approve Boston Scientific's Promus Premier Drug-eluting stent. The product is expected to bring in an additional $50 million in the U.S. He added in his research note that Boston Scientific's management believes that the Promus Premier helped to open additional customer accounts in Europe.
The product has already stolen market share away from its competitors in the second quarter of the year.
S-ICD version 1.5
The highly anticipated sub-cutaneous ICD product, which has no leads in the heart, has been plagued by manufacturing challenges even though demand is there. There were some pricing missteps along the way too.
Novarro believes the supply problem will abate with the launch of the next version of the product as management expects to ramp production, which will help sales climb. In his research note, he writes:
In 2013, we believe the product will likely stabilize share for BSX. But in 2014, the revenue contribution should be more meaningful (~$60M). We peg peak sales likely in the neighborhood of ~$500M+.
This novel technology was also the result of another acquisition, this time of Cameron Health for up to a whopping $1.35 billion in 2012.
Novarro expects that more payers will begin to reimburse Boston Scientfic's Alair product, which is used in bronchial thermoplasty aimed at asthma patients whose symptoms aren't regulated by inhalers and drugs.
Given that there are 6-8 million patients with symptomatic severe asthma not well controlled by drug therapy, BSX estimates a $200M market in 2015, growing to over $500M-$1B in 2020. BSX has said in the
past, it hopes to launch Alair in China, India, Brazil in 2013-2014, and Japan in 2017.
Like the aforementioned products, Alair is also the result of an acquisition. Boston acquired Asthmatx for a maximum of $443.5 million in 2010.