Daily Archives: October 6, 2007

Medtronic (MDT): The Stent Business Gets Worse

Medtronic (MDT) has decided to get into the stent business, making the little mesh tubes that keep arteries open. It is a perverse selection because Boston Scientific (BSX) and Johnson & Johnson (JNJ) has already had their heads handed to them based on negative results from safety studies testing the devices.

Wall St. only has to look at the BSX stock, which was over $27 in December 2005 and trades at $14 now, to see what happens when medical researchers turn on a treatment like a pack of wild dogs. Several studies have indicated that that drug-coated stent made by BSX can cause clots and have to be replaced.

But, the way of American business is to think that it can do better than the other guy, show him up and make money at it. Medtronics believed its new coated-stent would test out well, and take market share from the two front runners. But, the FDA ruined that plan by saying that the MDT product was perhaps even more likely to cause clots than it BSX competition. As The New York Times put it "the new heart stent from Medtronics has been associated with more blood clots than a rival product has, federal regulators have concluded."

One the news, Medtronics shares dropped almost 2% and it’s back to the drawing board.

Douglas A.McIntyre

Posted on: October 6, 2007 – 3:10 pm in Medical, , ,

Boeing (BA): Will The 787 Go Missing?

In the face of concerns that Boeing (BA) may not be able to launch its 787 Dreamliner on time, the company seems unconcerned. The first customer is to get the first plane in May. "That’s still our target," said Adam Morgan, spokesman for Chicago-based Boeing.

Boeing could be risking a large measure of its reputation both with Wall St. and its customers. Last week, Lehman Brothers said it thought the plane could be four to six months late, according to MarketWatch. That could hurt cash flow.

How much are Boeing’s shares at risk?  Probably a great deal  Over the last couple of days, the shares have moved down a bit from their 52-week high of almost $108. They now change hands at just under $103. But, it should not be forgotten that early last November, the stock was under $80. There has been a great deal of excitement about the huge volume of Dreamliner orders since then.

Delivering the plane on time may be a bigger deal than is evident at first glance.

Douglas A. McIntyre

Posted on: October 6, 2007 – 8:50 am in Aerospace,