Analysts: FDA Approval of New Heart Device Will Boost Bos Sci

Boston Scientific announced late Tuesday that the company has received FDA approval of its next generation subcutaneous implantable cardioverter defibrillator (S-ICD) earlier than expected. Analysts believe that the approval of the Emblem S-ICD system is part of an ongoing turnaround of the company and will boost its financial performance.

The device has also obtained CE Mark in Europe. The Emblem S-ICD system has no leads in the heart, often considered the weakest link in ICDs, and is inserted just under the skin near the chest. The technology came to Boston Scientific when it acquired Cameron Health in 2012.

The Marlborough, Massachusetts company has already begun shipping Emblem in a small number of medical centers in Europe with a broader launch slated for May. In the U.S., the launch will occur in the third quarter.

Emblem 19% thinner and is expected to last 40% longer than the previous S-ICD System, according to the news release. Analysts all agreed that it is a major improvement on the previous generation.

Because of its design, "Emblem overcomes many of the patient comfort and physician convenience shortcomings of its predecessor," although that earlier product garnered $100 million in revenue in 2014, wrote Rick Wise, an analyst with Stifel, in a research note Tuesday.

Wise estimates that in 2015, Boston Scientific will garner $166 million in S-ICD revenue and as much as $249 million in 2017, although he notes that with Emblem on the market, the adoption may be higher, driving up revenue higher than his projections.

Other analysts agreed that the product is much-improved. Emblem is now able to remotely monitor patients and the implanted device has "rounded contours to allow for easier implantation," wrote Michael Weinstein, an analyst with J.P. Morgan, in a research note Tuesday. 

Now with two FDA approvals under its belt, Boston Scientific's comeback story gains momentum, with more product approvals later this year and early next year. That includes the Synergy drug eluting stent that Glenn Novarro, an analyst with RBC Capital Markets, believes will help the company gain market share. 

Weinstein echoed this sentiment.

"Emblem and Watchman are just the first of several new products that we see driving a growth acceleration and, perhaps more importantly, a significant margin expansion story at Boston over the next 12-18 months," he wrote.  

Arundhati Parmar is senior editor at MD+DI. Reach her at [email protected] and on Twitter @aparmarbb 

[Image Courtesy of Boston Scientific]