Boston Scientific Looks To IPO Unit As Concerns About Main Business Linger
by Douglas A McIntyre
24/7 Wall St.
Boston Scientific (BSX) is considering spinning off part of its endosurgery division to the public. One analyst was quoted by The Wall Street Journal as saying: "People may take this as further evidence that they're not going to generate excess free cash flow off their ongoing businesses," said Erik Schneider at Sanford C. Bernstein & Co.
But, the problem may be deeper that that. The questions about the safety of stents, a core BSX product line, are reaching the media more and more often. There are also investigations into whether doctors are "overusing" stents for conditions beyond those for which the devices were intended.
It now appears that there may be Congressional investigations about the use, marketing, and safety of stents.
Much of this points in one direction. BSX is becoming increasingly concerned about the sale of its stent products and whether it may face any legal liability in cases where patients have died after the devices were implanted.
Spinning off a division of the company that seems to be clear of the stent explosion may well make good sense both to raise money and to get the business in a position to stand on its own if things go badly for company's larger business.
Source: 247WallSt.com
RELATED READING:
- New Class of Drug-Eluted Stents on the Horizon
- Boston Scientific to Market Stents in Europe After U.S. Criticism
- Stent Safety Issues at the FDA....Hogwash
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24/7 Wall St.
Boston Scientific (BSX) is considering spinning off part of its endosurgery division to the public. One analyst was quoted by The Wall Street Journal as saying: "People may take this as further evidence that they're not going to generate excess free cash flow off their ongoing businesses," said Erik Schneider at Sanford C. Bernstein & Co.
But, the problem may be deeper that that. The questions about the safety of stents, a core BSX product line, are reaching the media more and more often. There are also investigations into whether doctors are "overusing" stents for conditions beyond those for which the devices were intended.
It now appears that there may be Congressional investigations about the use, marketing, and safety of stents.
Much of this points in one direction. BSX is becoming increasingly concerned about the sale of its stent products and whether it may face any legal liability in cases where patients have died after the devices were implanted.
Spinning off a division of the company that seems to be clear of the stent explosion may well make good sense both to raise money and to get the business in a position to stand on its own if things go badly for company's larger business.
Source: 247WallSt.com
RELATED READING:
- New Class of Drug-Eluted Stents on the Horizon
- Boston Scientific to Market Stents in Europe After U.S. Criticism
- Stent Safety Issues at the FDA....Hogwash
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posted by Nico at
6:56 PM
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