5 Reasons Boston Scientific Is on the Upswing

Things are finally looking up for Boston Scientific. After getting through a reorganization and layoffs, and pursuing diversification through acquisition, the company has returned to profitability. Their product pipeline is beginning to pay off as approvals are rolling in, supply chains are up to speed and demand appears to be rising.

Here are five reasons why things are looking up for the Natick, MA-based device giant: 

Taking It OffRoad

On February 5, Boston Scientific announced the U.S. launch of its OffRoad Re-Entry Catheter System, an important addition to the company's arsenal of tools to treat chronic total occlusions (CTOs). These are complete arterial blockages in the major arteries of the legs. The OffRoad Re-Entry Catheter System helps physicians navigate around complete arterial blockages by traveling within the tissue of the vessel wall (subintimal space). Once the catheter has passed the blockage, a micro-catheter lancet re-enters the vessel.  This allows the physician to position a guidewire across the occlusion and to then treat the blockage using traditional endovascular techniques such as angioplasty and stenting.

The OffRoad System was approved in December. It was first used by J.A. Mustapha, MD, director of cardiac catheterization laboratories and director of cardiovascular research at Metro Health Hospital in Wyoming, MI. "In my opinion, the biggest challenge with the subintimal approach is the ability of the device to re-enter the true vessel lumen after crossing," said Mustapha. "The unique design of the OffRoad System facilitates re-entry, giving me confidence that I will be able to successfully deploy the tools I need to treat the blockage. I look forward to adding OffRoad to my endovascular toolkit to address these challenging lesions."

Opportunity in Renal Denervation

Boston Scientific CEO Michael Mahoney has repeated that the medical device giant remains enthusiastic about renal denervation as a treatment for high blood pressure--even after Medtronic and Covidien have decided to pull back from the space.

The treatment, which involves applying radiofrequency ablation through a catheter to the renal artery that supplies the kidneys with blood, was called into question last month after Medtronic announced its Symplicity system failed on efficacy in a pivotal U.S. clinical trial.

Medtronic suspended enrollment in renal denervation hypertension trials in three countries where it has been seeking regulatory approval: the United States, Japan, and India. And Covidien soon announced that it is exiting its OneShot renal denervation program, which involves technology Covidien acquired through its April 2012 acquisition of Maya Medical.

Mahoney, though, told analysts during a Tuesday earnings call, transcribed by Seeking Alpha, that the situation is "potentially an opportunity" for Boston Scientific and its Vessix platform.

"It's important to know that Vessix is a second generation balloon expandable multi-point renal denervation platform. We believe Vessix is highly differentiated from the competitor's product that recently announced missing its efficacy endpoint in the U.S. pivotal trial," Mahoney said Tuesday.

Expanding in China

Boston Scientific is looking to boost its bottom line in China. The company is adding employees in China and is debuting surgeon-training centers there, according to a Wall Street Journal report.

The move comes even as the Natick, MA-based medical device giant slashes hundreds of jobs in the United States and elsewhere, with savings from the "strategic growth initiative" going toward developing new products and other initiatives.

Boston Scientific, then, is hiring where it expects growth. A recent Motley Fool report drove home the point that countries such as Brazil, Russia, India, and China (the BRICs) are where Boston Scientific can expect growth in coming years.

Good News for the Watchman

Also in December, a Boston Scientific release announced that an FDA Circulatory System Devices Panel of the Medical Devices Advisory Committee had voted favorably on both the safety and efficacy of the company's Watchman Left Atrial Appendage Closure device. FDA will take into account the panel's vote in its decision on approval of the Watchman device.

"We are pleased with the outcome of today's Panel, which represents an important milestone toward making this innovative technology available to patients with atrial fibrillation at higher risk for stroke who need an alternative to long-term warfarin therapy," said Kenneth Stein, MD, chief medical officer, cardiac rhythm management, at Boston Scientific. The company expects a decision from the FDA in the first half of 2014.

Other Products Coming Online

And back in November, as covered on Qmed, the Direxion Torqueable Microcatheter, a microcatheter for shrinking tumors or blocking aneurysms, won both FDA and CE Mark approval.

And Boston Scientific also hopes to open up a place in the crowded stent market for its Promus Premier everolimus-eluting coronary stent system, which received FDA approval around Thanksgiving. The company says its Promus Premier stent system was developed with extensive input from interventional cardiologists and is designed to provide best-in-class acute and clinical outcomes.

With all these new products and more, it would seem that Boston Scientific is beginning to make a comeback. Since its stock is currently trading at levels nearly double those of a year ago, someone is certainly betting that this is the case. But as Stephen D. Simpson wrote on the Motley Fool, "Boston Scientific is getting the benefit of the doubt now, but a lot (of) work remains unfinished."