[The fact that Taxus Liberté is not a game saver (#msg-45284964, #msg-41855797) leaves BSX with no choice other than aggressive cost cutting. The upper management team responsible for the disastrous acquisition of Guidant is now gone.]
Boston Scientific Corp. posted a narrower fourth-quarter loss despite a big settlement payment, but the medical-device maker unveiled steps to shake up management and streamline operations.
Boston Scientific said the restructuring will combine its cardiovascular and cardiac-rhythm groups and eliminate its international headquarters, among other measures. Overall, the company will cut 1,000 to 1,300 positions, or 8% to 10% of its nonmanufacturing work force. Pretax charges will amount to $180 million to $200 million.
Among the biggest management changes, Chief Financial Officer Sam Leno will move over to chief operations officer. Chief Accounting Officer and Controller Jeff Capello will become chief financial officer. In addition, Cardiac Rhythm Management Group head Fred Colen will take on the new position of chief technical officer.
Boston Scientific also said it expects adjusted per-share earnings of 62 cents to 72 cents this year on revenue of $8 billion to $8.5 billion. The earnings view tops the 57 cents expected by Wall Street, though the revenue is mostly below the $8.43 billion analyst projection.
Aside from broader concerns about belt-tightening at hospitals, Boston Scientific has taken hits from patent settlements, most recently with a $1.73 billion pact with Johnson & Johnson[#msg-46116010].
However, President and Chief Executive Ray Elliott shrugged off that impact Wednesday. "The litigation settlement announced last week with Johnson & Johnson is part of our ongoing effort across the company to reduce risk," he said. "We have the financial strength and flexibility to meet this obligation with no appreciable impact on our debt covenants and still retain significant liquidity."
For its latest quarter, Boston Scientific reported a loss of $1.08 billion, or 71 cents a share, compared with $2.39 billion, or $1.59 a share, a year earlier. Excluding charges related to the settlement, restructuring and other items, per-share earnings were flat at 20 cents. Net sales climbed 3.8% to $2.08 billion. Excluding currency translation and sales from divested businesses, sales were flat.
"Endoscopy, Urology/Gynecology and Neuromodulation posted excellent growth, and we maintained our clear leadership in the global drug-eluting stent market," Mr. Elliott said.
Gross margin narrowed to 65.8% from 68.5%.
Worldwide sales of the company's stents—tiny metal scaffolds used to prop open heart arteries—decreased 4.8%, with revenue down 13% in the U.S. and up 3.9% abroad. Sales of Boston Scientific's stents have been closely watched since two studies showed an Abbott Laboratories heart stent worked better[#msg-45284964, #msg-41855797].
Sales of heart-rhythm management devices—including implantable cardioverter defibrillators, or ICDs—grew 6.1% world-wide, as U.S. sales rose 1.5% and sales abroad were up 16%.‹
[As it has become ever more clear that BSX’s Taxus does not have what it takes to compete with ABT’s Xience, BSX has argued that a newer version of Taxus called Liberté was where the real battle would take place. However, Liberté hasn’t fared any better against Xience than the original Taxus did. In Oct 2009, one-year data from the 1,800-patient, investigator-led COMPARE study showed Xience was both safer and more effective than Liberté (#msg-45284964, #msg-41855797). Unfortunately for BSX, the two-year data from this study reported in this PR show an even wider advantage for Xience than at one year.]
ABBOTT PARK, Ill., Sept. 23 /PRNewswire-FirstCall/ -- Late-breaking data were presented today from the investigator-initiated COMPARE trial of 1,800 real-world patients involving Abbott's (NYSE:ABT - News) market-leading XIENCE V® Everolimus Eluting Coronary Stent System and the TAXUS® Liberte® Paclitaxel-Eluting Coronary Stent System (TAXUS). The results from COMPARE at two years were presented by Peter Smits, M.D., of Maasstad Ziekenhuis, Rotterdam, the Netherlands, during the Cardiovascular Research Foundation's 22nd annual Transcatheter Cardiovascular Therapeutics (TCT) conference in Washington, D.C.
For the endpoint of major adverse cardiac events (MACE) at two years, which is a composite of all death, non-fatal heart attack (myocardial infarction or MI) and target vessel revascularization (TVR), XIENCE V showed a 34 percent lower incidence of MACE compared to TAXUS (9.0 percent for XIENCE V vs. 13.7 percent for TAXUS, p-value=0.0016).
The composite secondary endpoint of cardiac death, non-fatal MI and target lesion revascularization (TLR) resulted in a 35 percent lower incidence for XIENCE V compared to TAXUS (7.4 percent for XIENCE V vs. 11.4 percent for TAXUS, p-value=0.0038).
In addition, XIENCE V demonstrated a 77 percent lower rate of stent thrombosis, defined as definite or probable according to ARC (0.9 percent for XIENCE V vs. 3.9 percent for TAXUS, p-value=<0.0001); a 60 percent lower rate of TVR (3.1 percent for XIENCE V vs. 7.7 percent for TAXUS, p-value=<0.0001); a 56 percent lower rate of TLR (2.6 percent XIENCE V vs. 5.9 percent TAXUS, p-value=0.0005); and a 49 percent lower rate of non-fatal MI (3.9 percent XIENCE V for vs. 7.6 percent for TAXUS, p-value=0.0009).
The stent thrombosis rate for XIENCE V between one and two years increased from 0.7 percent at one year to 0.9 percent at two years, while the TAXUS arm increased from 2.6 percent at one year to 3.9 percent at two years. At two years, 88.6 percent of XIENCE V patients and 84.8 percent of TAXUS patients had discontinued dual-antiplatelet therapy.
"The COMPARE results show that the gap in stent thrombosis rates between XIENCE V and TAXUS Liberte widened from 1.9 percent at one year to 3.0 percent at two years," said Charles A. Simonton, M.D., FACC, FSCAI, divisional vice president, Medical Affairs, and chief medical officer, Abbott Vascular. "The COMPARE investigators have provided some of the first major insights into the comparative long-term differences in stent thrombosis rates between one and two years for different stent platforms."
"The two-year results presented today for the COMPARE trial and for the SPIRIT IV trial demonstrate impressive outcomes for XIENCE V compared to TAXUS Liberte and TAXUS Express, respectively," said Robert Hance, senior vice president, vascular, Abbott. "Both of these trials show the differences in the performance of these drug eluting stents and add to the ever-growing body of safety and efficacy data for XIENCE V – reinforcing why XIENCE V continues to be the market-leading drug eluting stent."
About The COMPARE Study
The COMPARE study is a physician-initiated "all-comers" trial sponsored by Maasstad Ziekenhuis of Rotterdam, the Netherlands. The study, designed to reflect real-world, everyday clinical practice, enrolled 1,800 patients in a single-center, prospective randomized (1:1) comparison of safety and efficacy of the XIENCE V™ Everolimus Eluting Stent System to the TAXUS® Liberte® Paclitaxel-Eluting Coronary Stent System. The COMPARE trial was supported in part by an Abbott grant. All aspects of the trial were designed and conducted independent of Abbott.‹
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