Abbott’s success is Boston Scientific’s failure
Posted by: in Companies Competitive StrategyFiled under: Bad news, Launches, Industry, Competitive strategy, Abbott Laboratories (ABT), Boston Scientific (BSX)
Abbott Laboratories (NYSE: ABT) got approval for its new drug-coated stent. The products are used to open clogged arteries, often in the place of by-pass surgery. The field has been dominated by deeply troubled medical device company Boston Scientific (NYSE: BSX). It looks that the weakened company is in for much more pain.
According to The Wall Street Journal, ABT “received regulatory approval for its Xience V drug-coated stent, which is expected to be the top seller in the roughly $2 billion U.S. market because it appears to be more effective than rival devices.” Boston Scientific will sell the new Abbott product, but with 40% of the revenue going to its rival, it is hard to see how that’s a good deal.
BSX has been beaten by competition at almost every turn. It took on tremendous debt when it purchased medical device company Guidant. It faced trouble when some Guidant products hit quality control issues. Boston Scientific stents came under criticism a year ago, when medical research questioned how effective they were.
BSX traded at nearly $45 in 2004. It is now at about $12. With new competition and a bad balance sheet, that’s not prone to change much.
Douglas A. McIntyre is an editor at 247wallst.com.
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