First-quarter sales for Boston Scientific Corp. slipped 1.8 percent to $2.01 billion, compared with $2.05 billion during the same period last year, as it struggles with a large chunk of long-term debt and fights expensive legal battles on a number of fronts.
The Natick-based devices giant plunged into the red, posting a $13 million net loss for the quarter ending March 31, compared with net income of $322 million during the first quarter of 2008.
Although the results met the company’s guidance estimates, it’s still facing a tough road as its struggles to reduce its debt load. Co-founders John Abele and Peter Nicholas unloaded millions of dollars worth of their own stakes last month to help pay down Boston Scientific’s long-term debt, which stood at $6.24 billion as of the end of the quarter, compared with $6.74 billion for the first quarter of 2008.
The debt ballooned in the first quarter of 2006, when BSC made its disastrous, $27 billion acquisition of Guidant Corp., surging from $1.84 billion to $8.9 billion. The company has reduced its debt every quarter since then.
Then there’s the $287 million in legal costs for the quarter, stemming from several lawsuits filed against Boston Scientific.
Although it settled a patent infringement case filed against it by a Texas physician, the company faces a class-action lawsuit over the 2004 recall of its Taxus stent and another patent infringement suit filed against it by a Hong Kong-based cardiac device maker.
BSC also lost an appeal to a French court aiming to squelch an anti-trust case there, meaning it must pony up its share of the $3.45 million fine, along with other device makers.
And in a confusing ruling by a federal appeals court, the company and Johnson & Johnson were each found to have infringed cardiac stent patents held by the other company.
Boston Scientific posted good numbers on U.S. sales of its cardiac rhythm management and coronorary stent systems, which boosted worldwide sales despite declines internationally.
Worldwide sales of its defibrillator and pacemaker products rose to $589 million, up 4.3 percent compared with the 2008 first quarter. That’s largely due to an 11.2 percent surge in U.S. sales, which offset a 7.7 percent decline overseas.
Stent sales figures painted a similar tale: Worldwide sales of $489 million, flat against the prior year’s quarter, with a 7.7 percent decline internationally offset by a 7.4 percent increase at home.
CEO Jim Tobin said the company was pleased that the results met targets and that it will continue to settle litigation and reduce debt.
Boston Scientific said it expects net sales of up to $2.08 billion during the second quarter and up to $8.5 billion for the full year.