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Author: tennjed33 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 448  
Subject: Briefing.com View Date: 7/20/2004 8:24 AM
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Essentially, Boston Scientific decided to extend its recall after identifying additional production lots that might lead to similar problems (i.e. the delivery system blocking the balloon's ability to inflate and keep arteries open) as the ones recalled July 2. Management is now asking for the return of 85,000 drug-eluting stents (Taxus systems) and 11,000 bare metal stents (Taxus Express 2 systems), out of the 500,000 and 600,000 total shipped. Boston Scientific has isolated the units to its Galway, Ireland manufacturing facility, as this factory lacked the appropriate software to check for delivery defects.

The company, not surprisingly, has sought to downplay the news - pointing out that it can replenish lost inventory in US hospitals within a week. The international picture isn't quite as rosy - it will likely be 4-5 weeks before management can replace that recalled product as supply is not as high - but it won't lead to gross revenues shortfalls. The actual recall will reverse $45 mln of sales in Q2 (or a little under 6 selling days using July's revenue figures) and should not be felt in future quarters as the incidence rate since the delivery change has been zero.

...

Briefing.com would recommend holders of BSX to wait until the company's Q2 (June) report next Monday before taking any action. Management will give greater color on the replacement process, which should probably help ease investors' worries. The stock is down 11% from Thursday's close, and we expect downside - at this point - to be limited as the market awaits the company's release. Briefing.com will give an update on BSX on Story Stocks at that time.
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