Monday, December 05, 2005

Boston Scientific and Guidant??

There were rumors last week that Abbott Labs (ABT) was interested in acquiring Boston Scientific (BSX). Well, today the truth comes out; BSX is going after Guidant (GDT). This was a total surprise to me! I couldn't believe it after reading the headline news. Now the big question is: Who wants GDT more? BSX or JNJ? I think both JNJ and BSX need Guidant. JNJ has a more solid currency, but is it willing to raise the bid? After what GDT has gone through with JNJ, I can see GDT being more receptive to the BSX offer. I can also see the great synergies between BSX and GDT. This would be my preference in this potential marriage. The shareholders will ultimately decide. This drama is far from over...

Today, I made a very small transaction. I sold my position in Cytyc Corp (CYTC). I didn't make any money in it. It's a nice little niche company, but a big chunk of the business is selling HPV detection systems. Merck will soon gain FDA approval of a HPV vaccine and that's going to be a problem for Cytyc. Glaxo Wellcome (GSK) is also close to marketing its HPV vaccine. I just think there are safer plays out there right now. It's all about managing the risk and reward.


At December 06, 2005, Blogger Dwight said...

The focus on this so far has been BSX and JNJ wanting GDT's cardio rhythm management market. I haven't seen anything yet about a stent focus--JNJ would want a better delivery system, while BSX at least gets a licensing fee from any competitor that uses GDT's IP. Factor that in and the stakes are raised a little higher. Just musing out loud here... I'm sure there are more areas for both bidders that would benefit them greatly.


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