If history is a predictor, the Taxus stent woes may be more serious... Boston Scientific (BSX) expanded its recall of the Taxus stent systems earlier this month, recalling an additional 3,000 units. After the first recall, we had predicted that BSX would run into additional problems with their stent and that it would result in lost market share and lost user confidence. We also mentioned that this would benefit Johnson & Johnson (JNJ), whose stent has been suffering due to competition from Taxus. Many analysts disagreed with us and tried to dismiss the story or at least reported that the impact would be minor. Several reiterated their ‘Buy’ recommendations. On July 30th the Company reported that half the hospitals that halted the use of the stent are using them again. Everyone was quite optimistic about this “temporary setback.” But history has shown that once an issue meets certain definable criteria, it is often past the point of no return.
