Boston Scientific's New CEO Wants To Diversify Products
June 25 2009 - 10:43AM
Dow Jones News
Boston Scientific Corp.'s (BSX) incoming chief executive said on
Thursday that wants to diversify the medical-device company's
offerings and that he sees a "target rich" environment for deals
outside the company if needed.
The Natick, Mass., company, well known for high-tech heart
devices such as stents and implantable defibrillators, announced
that long-time chief executive Jim Tobin is retiring next month
after 10 years at the helm. Ray Elliott, formerly the CEO of
orthopedics heavyweight Zimmer Holdings Inc. (ZMH), and also a
recent Boston Scientific board member, will replace Tobin.
Investors and analysts tend to focus heavily on Boston
Scientific's heart devices while giving little attention to other
parts of the business, where the company has a broad array of
products in areas such as pain management, gynecology and
urology.
"I think we should look very hard at diversifying our products,"
Elliott said on a call with analysts, where he talked about
expanding the company's capabilities beyond its key heart devices.
He mentioned urology and women's health as areas of interest.
Elliott said he doesn't see a tradeoff in terms of losing focus
on key businesses to focus on others but that he sees an
opportunity to diversify. He also talked about looking outside the
company at potential deals and partnerships if needed to bolster
the product lineup.
"It is a target-rich environment to buy or partner with people,"
Elliott said.
Shares of Boston Scientific moved higher on the CEO change
announcement and were recently up 5% to $9.99.
Elliott on the call also discussed his near-term plans for the
company, which he'll officially take over on July 13. A top
priority is lifting a corporate warning letter from the Food and
Drug Administration that was issued due to problems in company
plants and has taken years to resolve.
"That needs to go away and stay away," Elliott said.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com