As Mike Mahoney assumes the reins as CEO of Boston Scientific Corp., he does so with lots of innovation on tap for many years ahead.
New devices include the S-ICD, a just-approved defibrillator that can restart a patient's heart without sending wires -- called leads -- into the heart itself. It also includes the recent purchase of Rhythmia Medical Inc. and its mapping and navigation technology to help guide atrial fibrillation therapy.
On his first day as chief executive Thursday, Mahoney was busy meeting with employees and "spreading the vision for why they should be excited to be with the company for the next five years," he said.
For the past year, Mahoney has served as company president, running the Natick, Mass.-based medical technology maker's cardiac rhythm management business. That business, and Boston Scientific's drug-coated stents, are the two biggest pieces of the Boston Scientific pie. Yet, they have been hit hard by industrywide headwinds that have depressed sales and dampened earnings. It posted a third-quarter loss earlier this month and, over the past five years, Boston Scientific has seen its share price drop more than 50 percent.
Still, after a year waiting in the wings, Mahoney is jazzed about his new role. "I have spent the past year connecting with employees, learning the culture of the company ... in order to understand the business and the key growth drivers," said Mahoney, 47. "We have a lot of innovation in our core business."
On Wednesday, Boston Scientific received European market approval for its Synergy coronary stent with a bioabsorbable polymer coating. The coating is gone after about three months, officials said, helping improve healing.
Another area of potential growth: bronchial thermoplasty. Boston Scientific's Alair asthma treatment for adults whose asthma is not controlled with inhalers or other medications uses radio frequency energy to improve breathing.
The procedure was approved by the U.S. Food and Drug Administration in 2010. Boston Scientific will market the Alair system in 20 countries by the end of 2012, Mahoney said. He said the worldwide market for bronchial thermoplasty could reach $1 billion by 2020.
There is also a lot of promise surrounding the new S-ICD defibrillator, with the company hoping to gain market share from patients rattled by recent problems with leads.
Thom Gunderson, a senior analyst with Piper Jaffray & Co. who focuses on medical technology, said Mahoney has a good resume and a good base of experience as he assumes the top job. The year he spent working alongside interim CEO Hank Kucheman preparing for the post will help as well, Gunderson said. "So he's learned the business and had a good mentor or mentors to help him there at Boston Scientific."
There will be a bit of a honeymoon, Gunderson said. But "Wall Street will be looking for new ideas for execution and for a strategic path back to growth and profitability."
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