Replies to post #27440 on Biotech Values

[DewDiligence]

Here are some slides from the STJ
investor presentation in February.

The first slide shows market share in the “high-voltage” segment of the cardiac rhythm management (CRM) business. This segment consists of implantable cardioverter-defibrillators (ICDs) — devices that save lives by shocking an acutely malfunctioning heart back to a stable rhythm — and is the most important segment of the CRM market in terms of profit margins. Note how STJ had been steadily taking share from #2 player, Guidant (now BSX), and almost pulled even when GDT faltered due to its recall problems. Then, GDT regained some of its lost share as worries about recalls faded. The continued separation of these lines in 1Q06 is what caused STJ’s stock to get hammered on April 5, 2006.




The second slide shows market share in the overall CRM market including both the low-voltage and high-voltage segments. The low-voltage segment consists of pacemakers and resynchronization devices that can correct chromic heartbeat abnormalities but lack an ICD’s ability to shock the heart back to a normal rhythm in an acute setting. Because STJ has historically been stronger than GDT in the low-voltage segment, the recent push in the high-voltage segment has moved STJ to a virtual tie for #2 in overall CRM share.




The third slide is an STJ projection for the overall CRM business. It shows that, even with the inevitable slowing of the growth rate for new implantations, the market for replacement devices will grow strongly as older devices wear out. All told, this market figures to enjoy a powerful tail wind for years to come as boomers move into the prime years for treatment.



The complete set of slides from STJ’s investor presentation can be found at:
http://www.sjm.com/companyinformation/investorrelations.aspx?section=WebcastsAndPresentations

[DewDiligence]

Abbott Completes Acquisition of Guidant Vascular Business

[This is the side deal required for anticompetitive reasons in the DES market that was contingent upon BSX’s closing on the GDT acquisition. ABT paid a heck of a lot for this business—will it prove to be worth it?]

http://biz.yahoo.com/prnews/060421/nyf038.html?.v=43

>>
Friday April 21, 8:12 am ET

- Combination of Abbott's and Guidant's Vascular Organizations Creates Leading Vascular Devices Business -

ABBOTT PARK, Ill., April 21 /PRNewswire-FirstCall/ - Abbott (NYSE: ABT ) today announced it has completed the acquisition of Guidant's vascular business, which, combined with Abbott's current vascular business, creates one of the leading global vascular devices companies. This acquisition was made in connection with Boston Scientific's (NYSE: BSX ) acquisition of Guidant Corporation (NYSE: GDT ).

"The acquisition of Guidant's vascular business builds on our broad-based business strategy to develop leading positions in attractive health care markets - shaping Abbott for greater balance and strengthening our business mix and breadth of pipeline opportunities," said Miles D. White, chairman and chief executive officer, Abbott.

"The combined Abbott and Guidant business offers a broad line of leading coronary and endovascular products, a pre-eminent sales force, and global manufacturing operations, as well as a state-of-the-art R&D organization, which is developing innovative technologies and devices such as the XIENCE(TM) V and ZoMaxx(TM) drug-eluting stents," White said. "Our newly expanded vascular organization has the tools and the talent to transform the way physicians treat vascular disease, impacting the lives of millions of patients around the world."

Broad Vascular Devices Product Portfolio

For the past several years, Abbott has built a competitive vascular business through acquisitions, licensing agreements, and internal scientific and commercial development. With the addition of Guidant's vascular business, Abbott offers physicians, catheterization labs and clinics a complete line of products and technologies for interventional procedures including: a comprehensive line of coronary and endovascular stents; a full offering of guide wires, catheters and balloons; and innovative vessel closure devices. In addition, the combined business has a broad portfolio of intellectual property, including rapid exchange technology and stent designs, enabling the company to operate effectively in the competitive vascular devices market.

Innovative Research and Development Programs

In addition to its broad product portfolio, Abbott is conducting advanced research and development programs that are focused on finding innovative solutions for treating vascular disease. With Guidant, Abbott now has two drug-eluting stents in development: ZoMaxx, a state-of-the-art stent coated with a proprietary immunosuppressant drug, zotarolimus, designed specifically to combat vessel re-narrowing; and XIENCE V, an everolimus-eluting stent on the MULTI-LINK VISION® cobalt chromium stent platform, which recently received approval in Europe. The combined organization also is leading the industry with a number of next-generation research programs including a stent that elutes two drugs targeted at difficult-to-treat patients such as diabetics, and a bioabsorbable drug-eluting coronary stent designed to be fully absorbed by the vascular tissue following the restoration of blood flow.

Guidant Vascular Sales and Employees

The transaction provides Abbott with Guidant's vascular intervention and endovascular solutions business units, which had combined sales of more than $1 billion in 2005. These business units add nearly 6,000 employees worldwide to Abbott in three primary locations: Santa Clara, Calif.; Temecula, Calif.; and Clonmel, Ireland. The addition of Guidant's California-based employees boosts Abbott's presence in the state - currently the headquarters of Abbott's diabetes care and vascular businesses - from more than 3,000 to more than 7,000 employees.

Financial Details

Abbott paid $4.1 billion in cash for Guidant's vascular business. In addition, Abbott will pay Boston Scientific milestone payments of $250 million at U.S. Food and Drug Administration approval of Guidant's drug-eluting stent, and an additional payment of $250 million upon a similar approval in Japan. Abbott also provided Boston Scientific with a five-year, $900 million interest-bearing loan. In addition, Abbott has purchased approximately 64 million shares of Boston Scientific stock for $1.4 billion, which represents less than 5 percent of the company.

Abbott expects that the Guidant transaction will be accretive to earnings per share in 2007 and beyond. Further information, including financial details, will be provided on the conference call scheduled for 8 a.m. Central time today (9 a.m. Eastern), as previously announced. A live webcast of the conference call will be accessible through Abbott's Investor Relations Web site at http://www.abbottinvestor.com. An archived edition of the call will be available after 11 a.m. Central time. Abbott also furnished an 8-K today regarding the Guidant transaction.

About Abbott

Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company now employs 65,000 people and markets its products in more than 130 countries.
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[DewDiligence]

5½ year later, BSX may finally be emerging from the darkness created by the this monstrous acquisition.

[DewDiligence]

Ten years on, BSX still reeling from GDT acquisition:

http://www.wsj.com/articles/boston-scientific-to-restructure-operations-1465426324

Medical device company Boston Scientific Corp. plans to restructure operations, targeting more than $100 million in cost cuts by 2020.

The Marlborough, Mass.-based company, which has been trying to turn around operations since its 2006 acquisition of heart-device maker Guidant for about $27 billion, on Wednesday didn’t specify how many workers would be laid off or what other actions it would take beyond saying that some changes were taking place immediately and the rest would be done by the end of 2018. The company estimates it will record $175 million to $225 million in charges.