Boston Scientific’s (BSX) problem with its huge drug-coated stent business have become so severe that the company is looking at selling some of its assets. The stent have been blamed for clotting and heart problems in a number of patients. When BSX bought Guidant and took on $27 billion in debt, the company probably assumed that cash flow would handle debt load.
But, the stent business has continued to deteriorate. According to Reuters, the company may sell its shares in Aspect Medical (ASPM) and Cyberonics (CYBX). Aspect and BSX has already ended a joint venture to create brain monitors. ASPM shares are already at a 52-week low below $15, down from a high of $21.35. The Boston Scientific sale could send those shares down further.
CYBX shares are also near their 52-week low, trading at between $16 and $17. BSX may sell its 15% share in the company.
Boston Scientific’s other option for raising capital is to spin-off its endosurgery business.
JP Morgan has suggested that BSX could also get rid of several other businesses: "Those include the Meadox vascular graft business, which booked 2006 sales of around $100 million; Guidant’s cardiac surgery business, which recorded 2006 sales of $200 million; the Namic fluid-management business, which recorded 2006 sales of $80 million and the EP Technologies Cardiac Pathways catheter ablation business, with 2006 sales of $140 million."
But, bottom line, if the coated-stent business keeps moving down, so will BSX shares.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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