Good News for Boston Scientific (BSX)

Recently, Boston Scientific (BSX) received a notice from the Food and Drug Administration (FDA), whereby all the issues cited in the Company’s 2006 corporate warning letter have been resolved.

The warning letters from the FDA dates back to January 2006, when Boston Scientific was notified of the serious regulatory problems and corrective actions at three of its facilities. Following which the company took significant steps to identify the solutions for the quality issues and implement those. The FDA has subsequently lifted a number of corporate restrictions based on adequate resolution of the quality issues, but the corporate warning letter still remained awaiting FDA’s internal administrative procedures.

For Boston Scientifics’ implantable medical devices such as coronary stents and cardiac defibrillators, quality control is extremely important for the recipient patient. Patients and physicians have lost confidence in the quality and reliability of Boston’s products as they have been plagued by quality control issues. Thus, the FDA moratorium could have a major detrimental impact on the product development pipeline, thereby having an adverse impact on financial results. The long-awaited resolution of these corporate warning letters thus marks an important achievement for the company.

Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices for minimally invasive therapeutic procedures. The company’s success depends heavily on how well it maintains its market share in the face of increasingly tougher competition and its serious quality-control issues. It continues to invest in its strong development pipeline so as to compete in the next generation of medical devices.

The company participates in several markets, including CRM, Cardiovascular, Endosurgery and Neuromodulation, where it faces competition from several large companies, specifically Johnson & Johnson (JNJ), St. Jude (STJ), Medtronic (MDT), and Edwards Lifesciences (EW). We hope Boston Scientific will fully resolve its quality control issues and establish its strong foothold in the Medical device industry.

BOSTON SCIENTIF (BSX): Free Stock Analysis Report

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