Boston Scientific Corp. over the past three months delivered on promises of strong sales in nearly every medical device it offers, leading to investor enthusiasm Wednesday for a company that has officially recorded one profitable year since 2009.
The Marlborough, Mass.-based firm, which employs several thousand workers in the Twin Cities, said it earned $273 million, or 20 cents a share, in the third quarter, adjusted for one-time gains and expenses. That was up nearly 19 percent and at the high end of the range of analysts' forecasts.
The figures included solid growth in all three of the company's business units, including one of its core products, implantable defibrillators. In particular, sales of a Boston Scientific defibrillator that implants leads in the skin rather than the heart grew quickly, boosting forecasted sales to $100 million this year.
Analysts, who have recently been weary of the company's mounting legal challenges, welcomed the blast of positive financial news Wednesday.
"It was one of their best quarters, if not the best quarter, in the past five years," S&P Capital IQ analyst Jeffrey Loo said. "Hopefully this Johnson & Johnson litigation doesn't throw a monkey wrench in the gears."
Johnson & Johnson, the world's largest health care company, is slated to square off against Boston Scientific in a massive bench trial set to begin Nov. 20. The case centers on Johnson & Johnson's allegation that in the mid-2000s, Twin Cities heart devicemaker Guidant leaked strategic details from a confidential business proposal, causing Johnson & Johnson to lose a bidding war to acquire it. Boston Scientific eventually bought Guidant for $25 billion in 2006, and Johnson & Johnson is now asking for $5 billion in damages.
In an interview, Boston Scientific CEO Mike Mahoney said he was confident that Johnson & Johnson would not be able to prove in court that Guidant willfully breached confidentiality. "We are comfortable with our legal positions," he said.
With other legal headaches mounting, Boston Scientific executives revealed that during the quarter they had added $139 million to their internal fund for legal costs, including potential judgments and settlements. The total legal fund now stands at $945 million.