Medical device maker Boston Scientific said Monday it received European marketing approval for its latest drug-coated stent technology, which prevents blocked arteries.
The company said it will begin marketing its Promus Element stent in the European Union immediately. The device replaces the older Promus stent, which is Boston Scientific's version of Abbott Laboratories' Xience stent. Boston Scientific pays a 40 percent royalty to Abbott on all sales of the stents.
All revenue from the new stent will go directly to Boston Scientific.
"This is an important psychological and financial positive for the company and the stock," said Leerink Swann analyst Rick Wise, in a research note.
Stents are mesh metal tubes used to prop open arteries after the vessels have been cleared of fatty plaque. The drug coatings are designed to prevent scar tissue from growing back through the mesh and causing blockage.
Wells Fargo analyst Larry Biegelsen said the approval is "critical" for Boston Scientific, because the company's European supply agreement with Abbott expires later this month.
Biegelsen expects combined sales of $192 million for Promus and Promus Element this year, rising to $257 million by 2013.
Boston Scientific said Promus Element is made from an alloy that is more flexible than older stents, making the device easier to implant.
Analysts say sales of the new stent could offset lower sales of Boston Scientific's older stent platform. Two recent studies showed the company's Taxus stent was inferior at preventing safety problems compared with those from competitor Abbott Laboratories.
Earlier this fall, Boston Scientific completed enrollment of a study to support U.S. approval of Promus Element. The company expects Food and Drug Administration approval by 2012.
Shares of Boston Scientific rose 5 cents Monday to $8.16.
