In 1994, Boston Scientific (BSX) began a four-year strategic acquisition program that led to a large number of acquisitions. These acquisitions broadened the company’s geographical reach and product portfolio with entry into new markets and niche product areas. Boston Scientific’s market capitalization increased from $1.5 billion at the end of the year 1994 to $8.5 billion at the end of 1995.
During the late 1990s, Boston Scientific witnessed some disruptions in sales and a product recall, which led the company to undertake restructuring initiatives that included a change in management. Litigation and several recalls delayed a number of product launches by the company.
This led its major competitors, including Medtronic (MDT) and Guidant Corporation, to gain an edge, which impacted Boston Scientific’s sales and its market sentiments. That led to a drastic fall in its share price—Boston Scientific’s stock price fell by ~57% from mid-1999 to February 2000.
In March 2004, Boston Scientific launched the Taxus stent in the United States. Johnson & Johnson (JNJ) launched the Cypher medicated stent in 2003 and had the first mover’s advantage in the drug-coated stent market. However, Taxus delivered better results. Consequently, Boston Scientific soon captured ~70% of the drug-coated stent market share.
On April 21, 2006, Boston Scientific acquired one of its major competitors, Guidant, for $27.2 billion. The large size of the acquisition impacted the company’s bottom line in the following years. The company also suffered due to a number of recalls and litigations, including the controversial lawsuit regarding the sales of Guidant’s faulty defibrillators. Other legal challenges included several patent fights, as well as lawsuits filed by the patients who suffered injuries related to transvaginal mesh complications.
Starting in 2011, Boston Scientific has undertaken cost-cutting programs and reorganization efforts to turn the company’s battered financials around. In 2014, Boston Scientific started registering positive growth and profitability, and it has witnessed stable valuations.
View more information: https://marketrealist.com/2016/05/overview-boston-scientific-leading-medical-device-company/