Boston Scientific Corp. CEO Jim Tobin, a guy who knows a thing or two about acquisitions, spoke at the Cleveland Clinic's Medical Innovation Summit Wednesday. Lazard Capital Markets LLC analyst Sean Lavin summarized Tobin's speech in a note to clients Thursday morning. First, Tobin reinforced what he and other execs have said recently: Boston Scientific is on the prowl with $2 billion in cash on hand. The downturn could present good deals for the diversified medical device maker, which is trying to dig out of the hole it created with its $27 billion takeover of Guidant Corp. in 2006.
Continue reading below
Boston Scientific built its device empire through acquisition, but since the Guidant deal, the firm has shed several noncore product divisions and investments, often at a loss.
Tobin said Wednesday Boston would only buy "things that increase top-line growth. Small startups are generally out of luck." Boston will look for products that doctors want, he said, not interesting technology that might turn into products in the future.
He also said the dearth of IPOs -- no life sciences firm has gone public since March -- could be a death knell for venture-funded startups. "If you are a startup without the dollars to get to market, you are out of luck," he said. He also predicted unprofitable public biotechs would start running out of cash and disappearing.
The shakeout has already begun. Here's a partial list of firms that in the past two weeks have announced job cuts, restructuring, divestments or a combination:
- Jazz Pharmaceuticals Inc. (67 jobs),
- Metabasis Therapeutics Inc. (35 jobs),
- Introgen Therapeutics Inc.,
- Anesiva Inc. (85 jobs),
- Helicon Group Ltd.,
- Exelixis Inc. (78 jobs),
- TorreyPines Therapeutics Inc.,
- A.P. Pharma
The mother of all cuts this month, however, took place at Amylin Pharmaceuticals Inc., which said it will eliminate 340 jobs, one-fourth of its San Diego staff. The company, rare among peers in that it has successfully brought a product to market, has been hurt by safety concerns about its main product, the diabetes treatment Byetta. -
Alex Lash
