By Jon Kamp
Of DOW JONES NEWSWIRES
BOSTON -(Dow Jones)- Boston Scientific Corp.'s (BSX) "Promus Element" heart stents have been cleared in Europe, giving the company a product it needs there to replace one it will soon lose due to an expiring agreement with Abbott Laboratories (ABT).
Abbott makes the current version of Promus stents, which are the same as Abbott's "Xience" devices, and the companies share the proceeds from Promus sales. This agreement dates back to the companies' purchase of Guidant Corp. businesses in 2006--Boston Scientific bought the bulk of Guidant while Abbott bought the company's vascular business, including stents.
The European supply agreement for Promus devices wears off this month, which meant Boston Scientific faced a potential gap if it couldn't roll out a home-grown successor in time. With the "CE Mark" authorization it announced Monday, the company will start marketing Promus Element immediately in the European Union and other international markets that recognize that system.
Because Boston Scientific makes Promus Element, the devices will be more profitable than current Promus stents. This should offer "a bit of relief" from pressure on gross profit margins the company has seen, Samuel R. Leno, Boston Scientific's chief financial officer, said on an earnings call last month.
The company had long projected it would roll out Promus Element in Europe in time. Meantime, the company reiterated Monday it expects to win Food and Drug Administration approval to launch the device in the U.S. in 2012. The U.S. supply agreement for Abbott-made devices wears off in the second quarter that year.
Boston Scientific also said it expects European approval for its next-generation "Taxus" stent, called Taxus Element, in the second quarter 2010 and FDA approval in 2011. Taxus Element devices are a bit delayed in Europe, the company noted on the third-quarter call.
The devices in question are tiny scaffolds for clogged heart arteries that use medication to combat scar tissue growth that could lead to repeat procedures. Both the Promus and Taxus versions of Element stents are made from a platinum-chromium alloy, which Boston Scientific said offers more radial strength and flexibility than older alloys.
Boston Scientific shares rose 10 cents, or 1.23%, to $8.22 in recent trading.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com