Boston Scientific: FDA will lift warning in '07
Boston Scientific Corp. will likely remain under a corporate warning letter from federal regulators until the middle of next year, executives said yesterday on a conference call with Wall Street analysts.
The warning from the Food and Drug Administration, issued at the beginning of this year, said the Natick medical-device maker needed to fix widespread problems with its quality-control systems. Until it is formally lifted, federal regulators are unlikely to approve the company's most important new products.
Company officials said yesterday that they had installed new quality-control systems and were testing them, but did not expect the FDA to re-inspect the facilities until early next year, with the warning lifted at the end of the second quarter or the beginning of the third.
Yesterday, after the stock market closed, Boston Scientific reported $2 billion in sales for the third quarter of this year, 34 percent higher than the same quarter last year. The growth was almost entirely due to the acquisition of Guidant Corp., the heart-device maker it bought for $27 billion in April. Not including Guidant's sales, the company's revenues were essentially flat, at $1.5 billion.
The company's earnings were $76 million, or 5 cents a share. Not counting $77 million in charges related to the Guidant acquisition, the company earned 10 cents a share. Analysts had expected earnings of 5 to 15 cents a share.
In the same quarter last year, the company reported a loss of $269 million, or 33 cents per share, pushed down by a $616 million charge to settle a lawsuit with former partner Medinol Ltd.
Taxus drug-coated stents, Boston Scientific's leading product, generated $572 million in sales, down from $601 million in the same quarter last year. The company had already issued a warning that sales were likely to decline. The company's other major products, the implantable heart-rhythm devices it bought from Guidant, sold $446 million.
Sales of both of the company's flagship products, drug-coated stents and implantable defibrillators made by Guidant, have been hurt by news in the past year. Guidant's defibrillators suffered a series of recalls and high-profile malfunctions, while drug-coated stents have come under scrutiny recently from doctors worried about the long-term clotting they appear to cause in some patients.
Chief operating officer Paul LaViolette told analysts that sales of drug-eluting stents have likely ``bottomed" at about 83 percent of the total stent market, and that he expects that figure to climb next year.
Separately, the New England Journal of Medicine plans to release a French medical study today showing that carotid stents, tiny tubes implanted in the arteries leading to the brain, appear to cause more than twice as many strokes as the surgery they are designed to replace. Boston Scientific hopes to have a carotid stent approved for sale next year.
Stephen Heuser can be reached at sheuser@globe.com. 
