Scientific changes mind on endosurgery unit sale

US medical device manufacturer Boston Scientific has changed its mind over the sale of a minority stake in its endosurgery unit, due to a downturn in its main markets of stents and defibrillators.

Boston had hoped to raise around USD 1bn from the sale, which would have helped it pay off debt from the USD 27bn acquisition of Guidant in 2006. The company added that it planned to reduce costs through job cuts, sales of assets and parts of its investment portfolio.

The Guidant acquisition and other debt (USD 7bn) incurred by downturns in two of its most important medical device markets have seen Boston's stock drop. The stent market in particular has suffered due to thrombosis safety concerns over drug-eluting versions. As a result, analysts downgraded the companyπs credit ratings in July 2007.

Boston says its endosurgery unit has exhibited strong growth and should generate USD 1.4bn in revenue for FY07, which is almost 20 per cent of the company's total revenue.

In March 2007, Boston was considering an IPO of around 25 per cent of the endosurgery group, which develops devices to treat digestive, urological and gynecological disorders, as well as some cancers.

CEO James Tobin led the endosurgery sale turnaround adding that the company would benefit from keeping the unit under 100 per cent ownership.

Boston's shares fell USD 0.12 rest at USD 13.31 in after-hours trading on 2 August after rising USD 0.24 to USD 13.43 in the regular session.