Boston Scientific (BSX) has been the "gang who couldn’t shot straight" of the medical device business for some time. It spent far too much money to buy another medical company, Guidant. For all of its trouble, BSX ended up with almost $8 billion in debt and over $15 billion in goodwill. Watch for some of that to be written off.

The next stumble for BSX was that clinical studies showed that bare metal stents, small mesh pipes used to keep arteries open, did just as well as drug-coated stents to help patients with blockages. Drug-coated stents are more profitable. When their safety was called into question,sales went off a cliff.

BSX has two significant competitors in the stent business. One is Johnson & Johnson (JNJ) and the other is Abbott (ABT). Today a major medical study showed that after two years the Abbott Xience V product was much more safe for patients than the Boston Scientific Taxus stent.

According to Reuters, "In the 1,002-patient study, sponsored by Abbott, 7.3 percent of Xience patients experienced a major cardiac event, compared with 12.8 percent of Taxus patients, researchers said."

The fact that Abbott financed the research does smell a bit.

Nevertheless, if the data is confirmed by other studies, BSX investors get to brace for another round of trouble. Its shares trade for $13, down from a two-year high of over $20. A price of $10 may end up being more realistic.

Douglas A. McIntyre

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