(Reuters) - Boston Scientific Corp on Wednesday posted a rare first-quarter profit and revenue miss and lowered the top end of its 2019 sales growth forecast as the medical device maker faces regulatory scrutiny for some of its products.
Shares of the company were down 3 percent at $34.78 in early trading.
Last week, the U.S. health regulator ordered makers of transvaginal surgical mesh implants, including Boston Scientific, to immediately stop selling the products, citing safety and effectiveness concerns.
Tens of thousands of lawsuits have been filed in recent years against medical device manufacturers, including Boston Scientific, claiming their transvaginal mesh implants caused pain, urinary problems, bleeding and other injuries.
Adding to its woes, the U.S. Food and Drug Administration recently raised safety concerns about balloons and stents coated with a paclitaxel drug in treating peripheral arterial disease, affecting sales of Boston Scientific’s drug-eluting stent system, Eluvia.
“While the Eluvia launch in Japan remains on track, we do expect slower adoption of Eluvia to persist in the U.S. and Europe in second quarter and potentially throughout the second half,” Chief Executive Officer Michael Mahoney said on a conference call with analysts.
The Marlborough, Massachusetts-based company had cut its expectations for Eluvia revenue this year by half to reflect the changing landscape, Mahoney said, but did not reveal the revenue figure.
The company said it expected revenue growth for this year to be in a range of about 7 percent to 8 percent on a reported basis, compared to an earlier forecast of 7 percent to 9 percent.
Boston Scientific said the mesh withdrawal would result in a $30 million impact to global revenue this year and a $0.02 charge to adjusted earnings per share.
Excluding items, the company reported earnings of 35 cents per share, compared with IBES Refinitiv estimates of 36 cents per share, breaking a seven-quarter streak of meeting or beating the average analyst estimate for profit.
Net income rose 42.3 percent to $424 million in the first quarter ended March 31, while net sales were $2.49 billion, falling short of estimates of $2.53 billion.
“This was a rare off color performance from BSX,” Evercore ISI analyst Vijay Kumar wrote in a note.
“We suspect that investors hoping for Q1 to be a clearing event might be disappointed,” he added.
Reporting by Manas Mishra and Tamara Mathias in Bengaluru; Editing by James Emmanuel