Earlier this week, I e-mailed the head of media relations at Boston Scientific Corp. (NYSE: BSX) on a story about a lawsuit.
Not really expecting him to return my message (he didn’t and never does), I cc’d Steve Goodyear, an all-round good guy who handles media calls for the company’s cardiovascular division in Maple Grove.
The e-mail bounced back.
Hmmm.
I then called Steve’s office number. No one answered the phone, not even voice mail.
Uh-oh.
I finally reached Steve on his cell.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“Yeah, I got whacked,” Goodyear said glumly.
Goodyear was of the 500 or so workers in Minnesota cut loose by BSX in May when the company officially combined its cardiovascular business with the Arden Hills-based cardiac rhythm management operations inherited from its ill-fated Guidant Corp. acquisition.
Gone are most of the marketing and public relations teams. Media requests all go to that unresponsive guy at corporate headquarters in Natick, Massachusetts.
“Boston Scientific isn’t thinking about long-term right now,” Goodyear said. “Right now, they have to make their numbers.”
Layoffs are a natural and necessary component to corporate life, especially for a big, lumbering medical device giant still trying to digest a $26 billion acquisition. Marketing and PR people are always the first to go. In truth, it probably didn’t make sense to operate two separate divisions in the same market.
But let’s be clear, folks. If there’s anyone that needs good public relations right now, it’s BSX. And the unit that employed Goodyear represents the company’s fastest growing businesses. In fact, the newly combined Cardiology, Rhythm, Vascular division in Minnesota generates most of Boston Scientific’s $8.2 billion in annual sales, a fact that has led some to joke the company should rename itself Minnesota Scientific.
You might forgive Goodyear for being a little depressed. The mood, however, was considerably better at the Minneapolis Convention Center Thursday. There, 5,000 surviving BSX employees listened to Al Green’s “Let’s Stay Together” and CEO Ray Elliott’s speech rallying the troops behind a promising future.
As described in the Star Tribune under the unfortunate headline “Party hearty, Boston Sci,” Elliott said the company had good reason to feel optimistic:
First-year CEO Ray Elliott was in a mood to celebrate, and the high-tech corporate party didn’t disappoint. Clad casually in loafers and shirt-sleeves, Elliott was flanked by two huge video screens projecting his image as he paced about the stage expounding on the company’s strategic plan.
The company, Elliot said, will make acquisitions, penetrate China and India, and pursue growth in markets like obesity and diabetes, structural heart devices, such as heart valves, and devices treating high blood pressure.
Elliott praised his employees and touted teamwork. He quoted hockey legend Herb Brooks (which drew a whoop from the distinctly Minnesota crowd): “The name on the front of your jersey is more important than the name on the back… I’m not interested in following Medtronic or Abbott or St. Jude or anyone else,” he declared. “There is no bigger role or bigger thing we’re doing than this. We tend to be back on our heels a bit, but we can hold our heads high.”
A little pep talk is never a bad thing. But you have to back up those words with tangible results. And so far, Boston Scientific has failed to do that. Sales growth is anemic, partly due to spotty execution.
Elliott has told investors he expects the company to “get to market types of growth” in the second half of the year, especially as BSX’s new products — 30 alone this year from the recently combined cardiac rhythm management/cardiovascular group — fully hit the market.
“We got the products,” chief financial officer Jeff Capello told analysts last month. “We got the sales people. We’ll have to see how that plays out in the back half of the year.”
As the year progresses, the stakes get a little higher. The company is setting high expectations for the remaining six months of 2010. Boston Scientific needs to show investors something, or risk explaining how it went wrong.
So the question is: which BSX will show up to the party? The company that slashes its workforce to meet Wall Street numbers, or the company with the strategic vision and global resources to reestablish itself as major player in the medical device industry?
