A Medical Device Daily

Boston Scientific (Natick, Massachusetts) reported a $458 million 4Q08 loss brought on, it said, by short-term efforts to reduce debt related to its mammoth $27 billion acquisition of Guidant (Indianapolis) two years ago and a recent rash of job cuts.

The company said Monday that its net loss for the quarter equaled 31 cents per share. In the same quarter a year earlier, Boston Scientific posted a profit of $277 million, or 19 cents per share.

The debt reduction obscured some gains. The company reported that its sales rose 4% to $2.15 billion from $2.07 billion in the year-ago quarter, narrowly beating the consensus estimate of analysts surveyed by Thomson Financial, who expected sales of $2.13 billion in the latest quarter.

Excluding a total $939 million in charges, the company posted a profit of $355 million, or 24 cents per share.

The biggest of the charges was a $365 million hit from estimated potential losses due to patent litigation involving stents, which help prop heart arteries open after surgery.

The company also recorded charges of $208 million tied to businesses that the company recently sold and that are no longer worth as much they once were; $184 million in restructuring charges from the company’s October report of plans to cut 2,300 jobs, or 8% of its work force; $174 million in amortization expense; and $8 million of additional acquisition-related charges.

Some of the recent asset sales that triggered the quarterly loss were part of a plan by Boston Scientific to reduce the hefty debt load the company was saddled with after the Guidant deal. The job cuts were part of a plan to cut operations costs by about $500 million this year.

The total $939 million in charges from the latest quarter is up from $435 million in charges that the company reported in last year’s third quarter related to acquisitions and asset sales.

Sales of the company’s DES totaled about $435 million in 4Q08, down 14% from $506 million in the year-ago quarter. Stent sales at Boston Scientific and rival Johnson & Johnson (New Brusnwick, New Jersey) have been hurt by research questioning the devices’ safety and effectiveness, although some more recent studies have called some of the findings into question.

Sales of defibrillators and pacemakers, which Boston Scientific acquired in the Guidant deal, rose to $544 million from $489 million a year ago.

The company said it expects to post first-quarter sales in a range of $1.96 billion to $2.08 billion — just below analysts’ forecast for $2.09 billion. It expects a per-share profit of 15 cents to 20 cents, excluding one-time charges — above analysts’ estimate of 12 cents a share.