Boston Scientific reports slowdown in sales

Boston Scientific Corp. said last night that sales of its two key products, stents and implantable defibrillators, were slowing down and were likely to drag its third-quarter profit well below Wall Street expectations.

The Natick company estimated total third-quarter sales would be about $2 billion, compared to analysts' expectations of $2.2 billion.

``It's not pretty," said medical-device analyst Jan Wald of AG Edwards & Sons.

The largest life-science company in Massachusetts, Boston Scientific is dependent on two groups of products: drug-coated stents, which are tiny devices to repair arteries from the inside, and implantable heart-rhythm devices such as defibrillators and pacemakers.

The company spent $27 billion this year to buy heart-rhythm specialist Guidant Corp., betting that its defibrillators would bring significant sales growth for the next several years.

Instead, doctors appear to be growing more hesitant to implant the $25,000 devices, partly because of a series of high-profile product recalls by Guidant connected to several patient deaths.

Boston Scientific said last night it had seen ``some contraction" in the overall market for heart-rhythm devices in the last quarter, and said that US doctors were shifting slightly away from using drug-eluting stents.

Stents, which are responsible for nearly half the company's sales, have been at the center of a recent medical debate over what appears to be a long-term side effect of potential blood clots. In response to the emerging uncertainty over clots, the Food and Drug Administration has convened an expert panel on drug-coated stents, and some doctors say they are using more of the older, bare-metal stents.

Worldwide sales of its flagship Taxus drug-coated stent are likely to be $550 million to $580 million in the third quarter , the company said. Last year it reported $600 million in third-quarter Taxus sales.

Chief executive Jim Tobin called the last quarter ``challenging" but said the company was making progress on integrating Guidant and improving the quality issues cited in several FDA warning letters to the company.

The company projected its quarterly earnings at $90 million to $145 million, or 6 to 10 cents per share, not counting special charges related to the Guidant acquisition. Wall Street analysts were expecting 16 cents a share.

Stephen Heuser can be reached at sheuser@globe.com.