Biotech Values

[DewDiligence]

[Quiz answer]—Due to inventory reserves of older generation product?

Basically correct. Under the co-marketing agreement BSX has with ABT on the Promus stent (as opposed to the new Promus Element stent), BSX has to submit non-refundable purchase orders to ABT well in advance of delivery.

When the FDA approved Promus Element sooner than BSX expected, BSX was stuck with $40M of purchase orders for Promus that BSX no longer needed or wanted, and they are writing off the entire $40M.