Worcester Business Journal

www.wbjournal.com March 16, 2015 • Worcester Business Journal 9 In a conference call with analysts, President and CEO Michael Mahoney said the deal helps the company expand in the growing men's international health market while complementing its existing women's health and urology products. "Rather than breadth, our strategy is depth," he said. "Depth within specific service lines of the hospital, providing a c o m p r e h e n s i v e portfolio of solu- tions to our hospi- tal and physician customers." Chadha said acquiring the AMS businesses, and possibly making other deals in the future, seems like a good way to use available funds the company has lying around. "It would be a good use of cash and accretive to the bottom line," she said. Strong internal pipeline But both Chadha and Levy said Boston Scientific's pipeline of internally devel- oped products is good enough that it can choose whether to make acquisitions based on how they work with its existing businesses, not from a desperate need to grow sales. "They've got a lot of things going on internally right now," Levy said, citing the Watchman, an implantable device to help prevent strokes that may get FDA approval in the coming months, as well as a new implantable cardiac defibrillator that may move forward this year. Chadha said that, after suffering from low growth levels since the Guidant acquisition, Boston Scientific is likely to increase sales 3 to 6 percent a year going forward. "The company has really done a good job in their base business, turning the corner to positive sustainable growth and expanding operating margins," she said. "We think there is more to come." In general, the medical device indus- try is a good place to be right now. Stocks in the sector have outperformed the broader market over the past year, par- ticularly in the past few months. While the industry continues to pro- test the 2.3-percent medical device tax included in the Affordable Care Act, Levy said companies have pretty much acclimated to the extra cost at this point. He said insurance companies and hos- pitals continue to put pressure on the prices of medical devices, but that's a steady drumbeat, not a new threat. Bigger better for medical device firms? Levy said the big question for the industry is how much consolidation is good for business. Medtronic plc pushed the issue to the fore with its $50 billion acquisition of Covidien plc, final- ized in January. Levy said creating huge companies hasn't always been the best strategy for medical device companies in the past, but that could be changing. "If Medtronic's acquisition turns out to be a positive one and the combined com- pany ends up being a lot stronger (and) captures a greater share than alone, then other companies will begin to revisit that," he said. Levy and Chadha said the Affordable Care Act brings a greater focus on the cost and quality of care, which could lead to advantages for companies that have both breadth and depth in their product lines. Whether Boston Scientific will double down on mergers and acquisitions remains to be seen, but either way the company seems to be emerging from a decadelong shadow. "I think their balance sheet is getting better; they're generating cash," said Levy. "They're pretty busy." n Court settlement spells relief for Boston Scientific Tuesday March 24, 2015 5:00-8:00pm Sheraton Framingham Hotel & Conference Center Tickets available $28 in advance $40 at the door www.metrowest.org 508.879.5600 Presenting Sponsor: 5 th Annual Champion Sponsors: MetroWest Visitors Bureau Worcester Business Journal Partners: Sheraton Framingham, Distinctive Hospitality Group Bowditch & Dewey Middlesex Savings Bank Media Sponsor: MetroWest Daily News MWCoC Premier Sponsor: WBJ VIDEO Services Well executed, targeted videos can drive traffic to your web site, convert visitors into customers, and improve search results – let us help you explore whether video can be a difference maker in your marketing mix this year! Here Are 5 Top Video Ideas That The WBJ Can Do For You: ›› Company Profiles: An overview and tour of your firm and its capabilities. ›› Commemorative Events: Celebrate an anniversary, award, accreditation, new facility, or other achievements. ›› Executive Interviews: Have your senior executives share valuable perspective and expertise. ›› Product and Service Overview: Describing your products and services and help new customers understand what makes you special. ›› Training: Using video modules to train your team on site or at another location. For more information call Associate Publisher, Mark Murray at 508-755-8004 (x227) or email mmurray@wbjournal.com We help you unleash the power of VIDEO! >> Continued From Page 7 Analysts' views on BSX The consensus forecast on the company among investment analysts improved significantly in February. Source: SEC filings, Financial Times Buy 4 9 9 Outperform 7 9 9 Hold 15 14 8 Underperform 1 0 0 Sell 0 0 0 Feb. 2015 Mar. 2015 2014 "The company has really done a good job in their base business." Shagun Singh Chadha, Analyst, CRT Capital

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