Boston Scientific Corp (BSX) 2002 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

Welcome to the quarterly results earnings conference call.

At this time all participants are in a listen-only mode.

Later, we will conduct a question-and-answer session.

Instructions will be given at that time.

If you should require assistance during the call, please press zero then star.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to our host, Senior Vice President and Chief Financial Officer, Larry Best (ph).

Go ahead.

Thank you and good afternoon.

This afternoon we will be addressing the complete audited results of the fourth quarter in the year 2002.

We issued a press release about an hour 1/2 ago.

And I will be going over that briefly and then we will have a panel here to answer any questions you may have.

Today on the conference call we have our Chief Executive Officer, James Tobin (ph).

Also Paul LaVoilette (ph), who heads up our cardiovascular businesses and we also have on the phone Stephen Moreci (ph) who heads up our Endo Surgery group.

Before I begin, could I ask Paul Donovan (ph), our Vice President of Corporate Communications to read the Safe Harbor clause.

Thank you, Larry.

This conference call contains forward-looking statements.

The company wishes to caution the listener that actual results may differ from those discussed in the forward-looking statements and may be adversely affected by, among other things, risk associated with new product development and introduction, clinical trials, regulatory approval, intellectual property, operational improvements, litigation, the company's relationship with third parties, the company's overall business strategy and other factors described in the company's filings with the Securities and Exchange Commission.

Thank you, Larry.

Thank you, Paul.

Boston Scientific corporation today announced the results for its fourth quarter and the year ended December 31, 2002.

The results reported today are consistent with the preliminary results reported at the January 21st analysts' meeting in New York.

Net sales fort fourth quarter were 814 million compared toss 677 million for the fourth quarter of 2001, an increase of 20%.

Excluding the favorable impact of 11 million of foreign currency fluctuations net sales were 803 million, an increase of 19%.

Net income for the quarter including net special charges increased 59%, to $130 million or 31 cent per share diluted, as compared to $82 million excluding net special charges of 20 cent per share in the fourth quarter of 2001.

Reported net income for the quarter including net special charges of $25 million was $105 million or 25 cent per shared compared to reported net income of $65 million or 16 cent per share in the fourth quarter of 2001.

The net special charges for the quarter included purchase research and development, a $40 million primarily related to a recent acquisition of smart therapeutics Inc. and 15 million reduction in income tax expense result of tax refunds of previously paid taxes.

The rest of the release has to do with the final results from 2002.

And attached to the release are the routine schedules which give you detail regarding each of our businesses, including growth by geography, just to refresh -- for the meeting of the 21, we had sold growth in the fourth quarter.

It was the first quarter of what we referred to as our next chapter.

Obviously, we had top line double digit growth and very nice leverage on the EPS line, 20% top line EPS55% up.

Each business that we have grew double digits, and each geography grew double digits with the exception of Japan, and that, of course, has to do with our coronary stint franchise in Japan which hopefully will see relief in new products later in the year.

So overall, a very good quarter.

Double digit top and bottom line growth.

Since we had a rather complete update with Wall Street and on the webcast on the January 21st, just roughly a week or so ago, this phone call or this conference call is meant to be somewhat abbreviated, since we went over the quarter with some detail, and also the year 2002 and then, of course, we provided some forward-looking information on 2003 and 2004.

So I think at this point, we have no further prepared remarks, but we're more than happy to address any questions you may have at this time regarding the fourth quarter 2002, 2003 or beyond.

So let me -- and I will remind you again that on the call we have Jim Tobin, Paul LaVoilette, Stephen Moreci and myself.

So let me now turn it over to the moderator to open it up for questions.

Thank you.

Ladies and gentlemen, if you wish to ask a question, please press the 1 on your touch-tone phone.

You hear a tone indicating that you have been placed in cue.

If you pressed 1 before this announcement, please do so again at this time.

You may remove yourself from cue at any time by pressing the pound key.

Once again, ladies and gentlemen, if you have a question, please press the 1 at this time.

Also ladies and gentlemen in the interest of fairness, please limit your questions to a maximum of two questions.

Our first question comes from the line of Rick Weiss (ph) with Bear Stearns.

Please go ahead.

Good afternoon.

Maybe just a two part quick question, just give us a sense of how the first quarter started off and -- in terms of U.S. performance, and, second, just update us on the timing of your European stint launch, is it on track for mid January and any thoughts on your pricing strategy?

Thanks.

Overall, the quarter started off as expected.

We're just about right on our plan for the month of January.

So we're -- we feel pretty good about how the year is starting off.

All of the businesses appear very firm.

Nice tone.

You always get a little bit of a weakness in the first week after the holidays, but it's picked up every week since then.

Let me ask Paul to address the stint market and perhaps cardiovascular and then we will go on to Steve.

Yes, we do track stint share by month using the same approach that we apply to the business on a quarterly or annual basis and we believe we maintained a market share of 24% in the U.S. stint market.

Just to your question on taxes, you are correct, we still anticipate a launch in the second half of February.

We will hit our priority counts in a rollout fashion and expect to be in a -- in an unconstrained release mode by mid march, and we still have not communicated to the European market, specifically what our pricing strategy will be and we will hold that until the time of launch.

The actual date we're shooting for is February 17th, is it?

That's correct.

So we do have a specific date we're shooting for that we could -- you know, plus or -a couple of days.

Let me turn it over to Stephen Moreci for anything.

Steve, anything you can say regarding the tone in the first month of the quarter here?

Thanks, Larry.

A very good start to the quarter.

Basically on plan.

Exceeding plan right now on our urology and gynecology business.

We're happy to see the success the BI franchise has shown in the first month.

The new -- I expect them to come back and be right on target for the quarter so all in all a very good start to the quarter.

OK, next question.

Our next question comes from the line of Wade King with Wells Fargo Securities.

Please go ahead.

Good afternoon.

It's actually Ed Shanken calling in for Wade.

I have a question about the marketing of packs ill relative to -- assuming J and J has a couple of quarters what will be the marketing message to physicians to trial it as well as to make it their primary choice, given, you know, a late start?

Ed, we are obviously looking forward to driving evaluations based on, I think, three basic messages.

Number one, the data.

And, of course, we have not yet completed our gathering and publication of data from taxes four but we expect to have a myriad of messages to come out of that.

And I think that is what physicians are interested in primarily.

Secondary (ph) it will about stint performance basis and we think the combination of our delivery system and stint technology will give us a strong comparative system.

And, of course, third we have a compelling presence in the cath lab.

They buy more products and a broader array of technology from us already.

And I would say we expect virtually no problem Garnering evaluations with the product.

And I think our expressed precedent in this past quarter is a good example of why we feel strongly about that.

Very good.

Thank you.

Next question.

Thank you.

Our next question comes from the line of Bruce Jacob (ph) with Deutsche Banc.

Please go ahead.

Thanks.

Good afternoon as well.

Just two questions.

First on Europe and taxes, can you just, I guess, refresh us on what needs to happen between now and February 17th for you to be able to -- for you to hit that target in terms of a launch date?

That was question number one.

And, second, understanding that your plans are to release the taxes data, I'm wondering if there are any circumstances at all which you would consider releasing a subset of the data and if so what those circumstances might be?

Well, Bruce, regarding the second question first, we could speculate on any situation.

But we certainly don't envision today any reason to announce the data early.

We're -- as we indicated earlier, we were planning to file the EP in June.

That will be with a minimum of analysis and with data supporting our primary end point of the TBR reduction.

We have a tremendous amount of work to do between that time and the TPB to get the data analyzed and address the subset or data patterns.

We're frankly anticipating, as was the case with taxes, too, that it would take sometime after we're into the data to fully determine all of the analysis that will be required to really conduct a comprehensive assessment and prepare the data for presentation.

So we really are quite comfortable for the reasons we're not presenting the data early.

We don't intend to dribble it out.

We intend to do it properly and to do it as quickly as we can, which lines us up with the TCT.

In terms of what happens between now and the launch in Europe, obviously that is now only about 13 days away.

So not all that much.

We have made the stints.

And coated them for the launch quantities.

They're now going through their final assay testing to validate -- primarily to validate the drug components and the kinetic release that we're planning to achieve with the drug, and that testing is under way on those stints.

It takes nine days or thereabouts, so the tests are already taking place and we will get that data in a few days before that planned launch date, analyze the data and expect to be in a position to launch.

So 99% of the work is done.

And sort of assume that yields are running just fine?

Yes.

Yields today are categorically not a gating item and we expect the (inaudible) to improve as we focus more engineering time there.

And we have seen great promise that tells us that we have pretty high yield potential over a period of time.

Thanks very much.

Appreciate it.

Next question?

Next question comes from the line of Falcini Belzoiza (ph) with Fulcrom.

Go ahead.

At CRT last week a couple of presenters raised questions about staff design and what effect that could have on drug Aleutian.

Could you please just refresh us on some of the animal studies?

I believe you showed at your analyst meeting in the spring of '02 that addressed this issue?

Yes.

I remember those slides particularly clearly.

The answer is, we have done all of the bridging studies necessary to validate that -- the tissue -- the vessel sees the same amount of drug from stint platform A to B and in our case, that, of course, bridges from the near design to the expressed design.

As we have described previously, we have already commenced animal studies on our next generation design as well.

So we now have commenced the preclinical work necessary to validate the same dose delivery off of three different stint platforms.

We believe stint design can play a role but we have factored that in quite sufficiently and, of course, we had to demonstrate that before commencing the IDE in the United States for taxes for which of course was on the express platform for U.S. patients but it was based on preclinical data for the express and the near (inaudible) and clinical data from the near stint.

So that, I think, is all done satisfactorily for the FDA, and I think we're ahead of the game because we have already transitioned from our first to second stint platform.

Very good.

Thank you. .

Our next question comes from the line of Mike Winestein (ph) with J.P. Morgan.

Please go ahead.

Thank you.

Let me ask a couple of questions.

Paul since we have you here, I was hoping to get your analysis or thoughts on, what is the incremental pick up in (inaudible) between a six and nine -- I think you're familiar with the six points.

And, too, I wasn't clear what you said about your carotid program relative to the beach trial and I was hoping you could clarify.

Historically, and this is why six months was the end point for all previous (inaudible) trials, be it balloon or stints in the first era of the -- stints.

Six months was the cut off point.

If restenosis had not occurred by that time, it would not.

Then we reintroduced primarily radiation and there was a concern that radiation might simply defer the effect and so the window was extended.

But not for -- not because there was any presumption on behalf, I think, of the FDA or based on any data that we had generated that there would be any additional rebound in the six month to nine month period.

So I think it's safe to say based on our own sense of timing, based on the fact that we will be primed (ph) as an example at ACT to present 12 month data on taxes, too, based on the fact that we have shown 12 months on taxes 21 and approaching 24 months on taxes one that we really don't see any growth were say in the six to nine month range, nor as I mentioned, would we really have expected to.

Regarding beach, we have placed thank the trial on hold because we had a small set, a handful of device failures in the carotid wall stint, which the stint device used in concert with the filter wire in that carotid protocol.

The device failure was a simple bond failure, and it was not associated with adverse event -- events but we felt it was imperative we fixed that.

It's something we're capable of fixing.

We're currently completing a design of experiments to validate changes in the bond.

We expect to be back up and running on those changes very shortly.

We will refile those changes with the FDA to assure them that we have a device that is ready to go again, and we will be back up and running with that trial in the second quarter.

Thank you.

Our next question comes from the line of Craig Kruger (ph) with Bank of America.

Please go ahead.

Hi, Paul.

Do you anticipate having to go to a panel for your taxes in the states here?

Absolutely.

And then also, have you declared what you expect your shelf life to be?

We have described it on occasion.

We're launching in Europe with a shelf life in the eight-month to nine-month range, and then that will grow, basically commensurately with time, with real-time aging.

So by the time we launch in the United States, we will have dating over a year and we certainly have a lot of conference in the stability of the system, the drug, and the polymer, so we fully expect we will get the aging up to two-plus years on a commercial run-rate basis. .

That's great.

And if -- maybe going to Steve, if you're still on, could you talk a little bit more about the success you're having in urology?

You said that is one of the ones operating above plan.

Is it any of the sling procedure as well or is it as you said BEI is a contributor?

It's primarily BEI.

We have the blocks pretty strong.

I think it's the -- we finally have the team fully trained and fully launched nationwide and starting to see the impact about that and feeling good about our number 2003.

Thanks.

Our next question comes from the line of Jason Witteth with Morgan Stanley.

Please go ahead.

I want to know, was there a contribution from acquisitions and if so where did that fall? .

Contribution in the quarter was minor because it's apples to apples right now.

It also means on what you mean by -- which acquisitions and -

Basically I was just asking.

So the apples and oranges, I'll have to look -- try to get that before the call is over.

Jason Witteth OK. .

Next question comes from the line of Kim Nelson with U.S. Bancorp.

Go ahead, please.

Quick question for Larry.

Housekeeping question.

I don't believe any of the analysts provided the customary level of revenue breakouts by major product pipeline and geography.

Do you -- can you either do that now or make it available later?

I think we presented -

U.S. and international for the different divisions and product lines?

Well, we never do it by product line.

We do it by divisions.

I think the only thing -- let's see.

We did worldwide and we did domestic.

I think we have provided all of that.

Well, I will go back and check.

My recollection was that it was -- making up something along that line.

We don't want you to do that.

We will be glad to provide it again.

And if you need that detail, I'd rather go over number by number on the conference call today that's already out there, just call (inaudible) and he will be glad to fax you the details (inaudible) acquisition in the fourth quarter was the question, the impact?

Most of -- when people ask about acquisition contribution, one part of it is asking, you know, they kind of ask the question with the perspective of acquisition since 2001, and the contribution is about $55 million.

That is a measure of how successful the acquisitions have been.

What I think the question was is, whether it isn't apples to apples in the quarter what is the net contribution when you had an acquisition this year in the numbers and not in the prior year.

And at the net sales line in the fourth quarter, the contribution from those acquisition (ph) is only $4 million.

With a $2 million2,000,002,000,000 hit on the bottom line.

That is a small start up on the start up acquisition.

Everything else is apples to apples, fourth quarter to fourth quarter.

I'm sorry.

That's right.

That has a million or two of small therapeutics in it also.

Next question comes from the line of John Calganini (ph) with CIBC World Markets.

Go ahead.

Good afternoon, guys.

A lot of the questions have been answered but I did have two quick ones.

One, Paul, I wondered if you could talk about bare metal stint average prices, what is happening out there right now, what were your ASP's in the U.S. and the quarter and what would you be comfortable with for 2004. .

The stint prices have been reasonably stable.

Our prices came down as we entered the competitive fray with express but they were stable throughout the fourth quarter in the 1070 to 1090 range and we didn't see them trailing down that much throughout the quarter.

So I would say you're certainly going to see a heating up of pricing as (inaudible) is approved and as market penetration increases and the bare metal stint market is fought for by the remaining competitors.

We historically tracked stint price erosion in the six to 8 percent rate annually.

I suspect that will increase to something more akin to four to six measure quarterly.

OK.

Are you seeing the beginnings of that already?

And where do you think prices would end up by 2004 or should we just sort of use this four to 6 percent drop every quarter strait on into 2004?

Yeah, we have not seen ASP's -- through the end of January, we're holding right in that same range, as was established in Q4.

So to the extent there has been a sort of jockeying for shelf space and in anticipation of the -- launch which has been a bit of a moving target so there's been several months of this sort of protracted last call, pricing has still remained, for us, in that very compressed $20 bracket.

So I don't think we're going to see too much change in that right away.

I think -- it's been, quite frankly, awfully difficult to forecast what is going to happen over the next four or five quarters.

A lot depends on drug -- penetration, and we have pegged it and described where we think it is going to be but the specifics on bare metal stint pricing are too hard to call right now.

The cutting loom looked like it was leveling off here between 3Q and 4Q at 40 million a quarter.

What will that do in 2003?

What do you see that doing?

Is this now going to level off -- I guess if you could answer that.

It should level off in Q4, right at that level, of about 30 million for the U.S. and 40 million worldwide.

We think we will get a little bit of an up tick as we launch the cutting balloon ultra-, which is the cutting -- on maverick.

I think that performed so well, so close to balloon catheter that it will enable more frequent utilization.

There are two threats to the cutting balloon that would alter its current level, which is sort of solidly penetrated at 15 to 16% of all procedures.

The first threat is the launch of a competitive product, which I don't want to give too much credit too but which we're very sort of conscious of, and that is the FX mini rail.

We feel we're fully prepared to defend our share against that product, but it will be the first competition the cutting bloom hats seen.

We don't know the specific launch date but we're assuming sometime in the next 90 to 120 days.

The second will be, of course, the reduction of instant restenosis, which is not a currently indicated application for the cutting balloon, but it is occasionally practiced, and given that sifer is not available yet, the restenosis -- will now persist through most of 2003 -- so we think the market nor cutting balloon will be stable.

We will try to increase technology improvements and then start energy 20004 will move to the peripheral vascular market as well.

For '03 should we have that leveling off at the fourth quarter run rate?

Is that what we should build in our ...

I think that is safe.

I think we will try to beat that but I think that is safe.

OK.

Thanks. .

Next question comes from the line of David Winean (ph) with P.D.

New Crest.

Go ahead.

I have calm of questions.

First, I'm wondering, the models for -- what should we be using for the royalty rate for (inaudible) I believe it's a sliding scale royalty rate and will that be based on base unit sales or will that be a fixed number?

And second question, can you just give us more detail about direct stinting with coated stint?

Has there been trial design around that?

Thanks.

... part first, there has been no trial with direct stinting.

And all of the -- certainly the ID's to the United States will require predilatation.

It's Hart to say how much direct stinting will be practiced.

But my sense direct stinting is not going to be that common given the cost of failure with the drug-diluted stint.

So the price of predilatation is low and I think the drug diluted stints will be used with predilatation.

On the royalty rate, you know, we model at 8%.

And I don't think it's probably worth getting into the actual calculations, because the way it ramps up.

But, you know, there are royalty rates that start with 5% and move to 7%.

I don't know whose phone that is.

It's not on this end.

But whoever has the phone, could you put yourself on mute.

OK.

On the royalty rate issue, let me start over.

It is a graduated rate.

But for all intents and purposes, we model at 8%.

But it is graduated.

It actually starts and goes 5, 7, 8 and 10.

At different points.

But I think it's safe to say that given the opportunity that we have and the size that we think our business will be, to model at 8% and you're in good shape.

Thank you.

Next question compress the line of Stan Mann (ph) with Ronnie Investments.

Please go ahead.

Two questions: What have you projected for -- of the coded stint in Europe for this year?

Is that available?

Yes.

We have projected, first of all, that it ends 2002, with penetration rate in the 7 to 8% range.

You mean 2003?

No.

That's what it's exiting.

That's the starting point for the year.

Exit fourth quarter in 2002 it was at the 7 to 8% range.

Got you.

And then in modeling and planning for 2003, obviously the first change is that you have two competitors as opposed to one.

And we hope that that will accelerate the conversion of the market.

Exiting 2003, Paul, do you know -

Yeah, we're in the 40 to 45% range in Europe.

That's quite a penetration.

Secondly, what is your sense of the Cobalt chromium effect on the total marketplace?

Quite frankly, the data that I have seen on the next generational lows doesn't -- generation alloys does not create a compelling story.

It's data that I would characterize as comparable to clinical outcomes that we have achieved in the victory trial.

As an example, for the express stint or that is commonly delivered on the (inaudible).

So -- stainless steel, bare metal and Cobalt chromium stint I think based on the current restenosis data is not warranted. .

OK.

Thank you. .

Thank you.

Next question comes from the line of Kevin Cotler (ph) with Gallean.

Go ahead.

Hi, just to Paul, just a quick one, just talking to a doctor related to non-invasive diagnosis of coronary artery disease and he specifically said something about 16-channel CT, is your view -- what is your view of the status of non-invasive Angiographys?

We like the 24 channel.

My sense, Kevin is that there are a number of EKG algorithms and non-invasive screens that are getting closer to having preaddictive value.

But as relates to anything that would trigger a cardiology event it's always for the near term going to be depend end upon a direct angio gram.

And secondly, as you prepare for your Texas launch in Europe, as you, I guess, visit accounts, are you targeting the sifer accounts and if so, have you had any push back from those to try your taxes?

Well, we will definitely target all accounts and you can imagine that just prioritizing customer characteristics, someone who by definition has already converted to a drug -- stint would be easier yourself in some ways and we certainly will do that.

The only basis in which a customer would be reluctant would be if they had entered into an annual contract.

And given the current pricing scenario and given the awareness within the European market that a new competitors worry coming, most customer have avoided doing that.

All right.

One question for Larry, if you don't mind.

Larry, I guess you got a panel -- favorable panel approval, I think on a gird device in January?

Yes.

And I estimate there's a 15 to $20 million payment to microtherapeutics, when would you expect to pay that?

I think I just did today.

And it's more like $40 million.

Fort-plus million.

To microtherapeutics?

Yes.

I thought you meant to microEMT.

It's not big.

I would have to go back and look at it.

I definitely don't think it's in the category of $20 million.

You know, for those of you that may not understand the question totally, the EMT polymer is similar to the polymer that I believe microtherapeutics uses, and there's some kind of a license.

And I assume there's some kind of payment.

But it isn't in that magnitude.

OK.

I guess it was for the -- acquisition that you made.

Yeah.

We bought INTERIC medical?

Right.

Now I follow your question more clearly.

Microtherapeutics was a shareholder in INTERIC medical.

So they will get a payment.

I don't know how much their share is.

The total pavement based on meeting the threshold (ph) of a panel approval for the product, it ranges in the neighborhood of between call it 45 to 50 million payment in different cuts.

Now, a portion of that will go to probably the shareholders of microtherapeutics because they were an equity holder in INTERIC medical.

Okay, thanks.

Once again, ladies and gentlemen, if there are any additional questions, please press the 1 at this time.

And we do have a follow-up question from the line of Craig Kruger (ph), with bank of America.

Please go ahead.

Craig Kruger again.

Have you guys noticed any sense of inventory shifting as you face the first quarter when the cath labs may be attempting to bleed off inventories as they're anticipating the cypress vent?

I hope that has not already been asked.

I would say (inaudible) labs are not trying to bleed off inventory per se.

I do believe at the tail end of 2002 more than a few stints were shipped beyond what was consumed in the month.

So there probably was a little bit of overselling in Q4, and I'm sure that labs took advantage of some one-time offers.

You are talking about the industry?

The industry-wide.

I'm actually speaking of all companies including Boston scientific.

And they're probably using up some of those.

But they're not intending to reduce their stint inventories.

I think it's safe to say that most of them are planning on having let's say a drug alluding stint come take some inventory back in change for drug-alluding stints.

All right.

And then if -- here we are, so anxious about your results on Texas four, and we do appreciate that you probably do have the best platform, best stint design, best delivery catheter, what are your thoughts Paul, and Jim, if you were to, because you your superior delivery system, if you were to have a couple of percentage point worsts (ph), if you will, restenosis data, where would you still come out even or still think that you could have a strong marketing message and take a good capture of this share of the drug coated stint market even if you may be a slightly higher -- could you just --.

I think it's fair to say we don't even want to think about that possibility.

And what we will -- we will approach that if we have to.

But there's nobody here that is assuming that we're going to be in that category.

Now, after saying that, I think that, you know, you got everything from -- you have to be talking about -- I would think you would have to be talking about statistically significant -- before you have a marketing disadvantage.

I think two -

I agree with Larry.

First of all, curt, the data sets are not obviously generated in a head to head data comparison basis.

So I think most physician less look at it and say the two trials will not be comprehensively comparable head to head.

So you will start off with having two basic data sets.

And if they're in the same range with one another, I think most physician less view them as equivalent.

The second; although there's a lot of focus on what is your number, your binary (ph) stenosis waive, the data that we're generating on subsets, on different patterns of recurrence, whether it's with diabetic demographics or small vessels or long lesions or what have you, even if, you know, the singular Datapoint is not exactly comparable, there may well be great stories in the subsets and that's precisely why we're not interested in providing data in a summary session before the entire data set is understood.

So we feel, to Larry's point, very good about our data so far.

We're looking forward to -- I mean we're not waiting anxiously for our data.

We're waiting anxiously and we will develop the final story once we have it all.

But until then we're just looking forward to seeing it.

Thank you.

That was a good explanation (ph).

Thanks.

OK.

We have got room for a couple more questions if we have them, or if not, we will close it up for the day.

We have a couple more questions then.

Our next question comes from the line of Steve Laggermeyer (ph) with Intermed Cofunds (ph).

Go ahead.

Paul, not to (inaudible) your answers but I think this is best suited for you.

Is it possible, -- pure speculation with this question -- is it possible there could be an up side surprise call and that BSC might receive some kind of an -- or early approval for the overall ES platform, especially considering that then we would have obviously competitive offering out there and, in light of the fact that J. and J. made some monopoly -- with their Bear Stearns program in the 90s, could something like this ever be envisioned by you?

That's big question.

You several factors.

One is the relative timing between our approval and the approval for sifer and how much of a gap exists there.

The second is how sort of interested the market is in having a second player, and I think the answer to that will be very high.

We certainly have given consideration to how that gap may narrow over time.

We don't expect the FDA to approve our device in much less than 180 days.

It will be an extremely large and complex submission.

We do expect a panel.

And it's -- it's unreasonable, I think, to expect it in less than six months.

But I think six months is a good time frame.

And as we're seeing now, J. and J. is, I think, approaching it's 8th month in the approval cycle.

So if theirs takes a little longer and if our takes -- the projected time, we think the gap will close and certainly that represents upside for us.

Terrific.

Of the reason I ask that also, Paul; because -- I mean you guys are staying in touch with the FDA and sharing information as you go along here.

It's not like we're starting from zero on communication with them is it.

I will credit the FDA for being extremely well aware of everything that is going on in the drug alluding stint field.

They know about all of the data.

They know about all of the global results and they're extremely focused on preclinical data, on quality systems and manufacturing data.

So they are not going to approve any system that is not fully ready, but they may well approve systems that are well prepared in less time than others.

Keep up the great effort, all of you.

One last question.

Our last questions comes from the line of Timothy Lee with Merrill Lynch.

Please go ahead.

Thanks for taking my questions.

A quick housekeeping question.

Historically within -- you had given the peripheral component, one, what was the peripheral component sales in the fourth quarter, and will you be providing that going forward.

Yeah.

We don't mind providing peripheral versus vascular.

Like I say, those of you who have any questions on the routine stuff, we did have a change in format.

We did move vascular surgery into cardiovascular so -- can fax you know the detail comparisons on that.

On the peripheral, worldwide, in 2002, we came in at 119.

And that is up 8, almost 9% from the prior year.

So our peripheral business grew in the year 9%.

The U.S. peripheral number came in, call it 85 million.

And the rest was UOF.

Thank you.

With that, we complete our conference call today.

We appreciate the continued interest in Boston Scientific and have a good afternoon.

Thank you. .

Thank you.

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