* Stock rally fizzles as pricing, mkt share concerns weigh
* Company sees sales up 5-7 pct on constant-currency basis
* MADIT full study results to be presented in September
* Plans to seek expanded US label for heart resync devices (Recasts; adds analyst comments, details from company call, byline; updates stock activity)
By Susan Kelly
CHICAGO, July 21 (Reuters) - Investors tempered their enthusiasm for shares of Boston Scientific Corp (BSX.N) on Tuesday, as worries about device pricing and market share crept in a day after the company reported solid quarterly earnings.
The stock, which rallied 7 percent in after-hours trading Monday and initially hit a nine-month high on Tuesday, closed barely changed, after the company provided additional commentary on its conference call with investors.
“We do not see much in these results to warrant shares trading up 5 percent-plus last night,” Lazard Capital Markets analyst Sean Lavin wrote in a note to clients on Tuesday.
While overall profit and revenue were in line with targets, the company’s defibrillator sales of $454 million were at the low end of forecasts, suggesting new products were not picking up as much market share as expected, Lavin said.
Rick Wise, analyst with Leerink Swann, said that while the company reported another good quarter and reiterated growth goals, discussion of lower prices for drug-eluting stents on the call could be generating some investor anxiety.
Boston Scientific said U.S. pricing on its Taxus drug eluting stent declined 8 percent in the second quarter.
The company also said it plans to increase its sales staff, which could boost expenses, Wise said.
On the call with investors, new Boston Scientific Chief Executive Ray Elliott also said he is comfortable with the company’s constant-currency sales growth target of 5 percent to 7 percent for 2010 and 2011.
Elliott replaced James Tobin as the device maker’s chief executive earlier this month.
“The stock had moved up after the announcement of the CEO change, so maybe it is a little profit-taking post a respectable quarter,” Wise said.
Boston Scientific also said a landmark study of cardiac resynchronization therapy in early-stage heart failure patients could greatly boost the market for the implanted devices.
The MADIT-CRT study, which is sponsored by the company, looks at whether early intervention with the implanted devices can slow disease progression. CRT-D therapy, in combination with a standard implantable cardioverter defibrillator, or ICD, is currently used in the sickest heart failure patients.
Boston Scientific plans to apply with U.S. regulators for an expanded label indication for the devices around year-end and anticipates approval in mid-2010, Elliott said.
Preliminary data from the study, released last month, showed CRT-D therapy cut the risk of death or heart failure interventions by 29 percent compared with ICDs alone.
“We believe this trial has the potential to significantly expand CRT-D indications,” Elliott told analysts on the conference call.
Full results of the MADIT-CRT trial will be presented in September at a cardiologists meeting in Europe. The study could expand the U.S. market for CRT-D devices by as much as $250 million over the next few years, and by $400 million to $500 million on a worldwide basis, Elliott said.
Shares of Boston Scientific rose 2 cents to close at $10.32 on the New York Stock Exchange.
Reporting by Susan Kelly; Editing by Tim Dobbyn and Richard Chang