Boston Scientific's Buying Spree Continues, This Time in EP
This month's $115 million cash deal to acquire electrophysiology company Cardiac Pathways Corp., makes five acquisitions for Boston Scientific already this year. Boston's dealmaking flurry is particularly notable given the relative inactivity of other large device companies on the acquisition front, and the cold shoulder the public market has given to the device sector. This deal reflects Boston's renewed commitment to electrophysiology, an area the company was thinking about exiting just a couple of years ago despite having a market-leading product. But it still remains to be seen whether this recent string of deals can turn around Boston Scientific and boost its flagging stock price.
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Boston Scientific CEO Jim Tobin, in a series of addresses, defends his company's decision to spend $27.3 billion on Guidant Inc., warts and all. Defying criticism of the deal, Tobin lays out how Boston Scientific management corrected Guidant's problems--and why the new company will thrive.
Once an aggressive buyer of promising device technology, Boston Scientific's recent difficulties relegated it to the M&A sidelines; the company is back with a new string of acquisitions but a different gameplan.
Cardiac Pathways' strategy is to develop solutions for the most difficult cardiac rhythm problems, those for which even palliative treatments are limited. Armed with promising advanced technology, the company was one of the last through the 1996 medical device IPO window but since then has been paying the price for being slow to market. With FDA approval finally in hand, along with new management and additional financing obtained at a premium cost, Cardiac Pathways hopes to sustain itself long enough to finally take advantage of its technological lead by creating a new market treating patients who have few other options.