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Boston Scientific (BSX) Shares Drop on LOTUS Relaunch Delay

Zacks

The fate of Lotus valve issue seems to be in limbo for some more time for Boston Scientific BSX. Recently, the company announces a delay to its earlier-reported timelines for the commercial return of the LOTUS Edge Aortic Valve System in Europe and the United States, following the product’s voluntary recall that took place back in February 2017.

Following this sudden announcement, share price of the company dropped 8.4% over the last three days to reach $26.28 before closing the session on Nov 30. Per editor Amanda Pedersen’s newsletter published on MDDIonline.com, investors were overly worried due to the sudden change of plans foreshadowing another Lotus setback.

Notably, in February, while recalling the product (based on certain device malfunctions), Boston Scientific announced the expected time of reintroduction of the LOTUS Edge delivery system in Europe by the first quarter of 2018. The company also expected to file the final Pre-Market Approval (PMA) module with the U.S. Food and Drug Administration by January 2018.

However, per the latest press release,on the fourth-quarter 2017 earnings conference call on Feb 1, 2018, the company now expects to provide a further update on the status of the LOTUS Edge Valve. This delay has been justified by Boston Scientific citing continuous ‘focus on manufacturing and regulatory milestones to support the long-term success of the Lotus platform.’ The company stated that it is currently working on to implement necessary modifications in the device to pass the internal quality standards.


While the company has not specifically mentioned the exact reasons behind this postponing of Lotus Valve relaunch, we however, fear about the uncertain fate of the company’s fast-growing transcatheter aortic valve replacement (TAVR) business within interventional cardiology, wherein Lotus valve line is a prime product. Meanwhile, the company observed that this delay is not expected to bring any financial impact to its fourth-quarter and 2017 guidance.

Boston Scientific has been trading below the broader industry over the past three months. The stock has lost 4.8% compared with the broader industry's 4.9% rise during the period.

Zacks Rank & Key Picks

Boston Scientific carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical sector are PetMed Express, Inc. PETS, Myriad Genetics, Inc. MYGN and Luminex Corp. LMNX, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 74.1% in a year.

Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has soared 107.9% over a year.

Luminexhas a long-term expected earnings growth rate of 16.3%. The stock has gained 7.9% over the last year.

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