Fitch Ratings: Boston Scientific Corp. Rating Unaffected by Verdict.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. notes that the ratings and Stable Outlook of Boston Scientific Corp. (BSX BSX Bermuda Stock Exchange BSX Bandai Satellaview-X BSX Bicycle Super-X (Cross) ) will not be affected by the recent jury verdict in favor of a Johnson & Johnson (JNJ JNJ Johnson and Johnson (stock symbol) JNJ Journal of Nursing Jocularity ) claim that BSX stents infringe on patents held by JNJ. Specifically, a Delaware jury found that BSX's TAXUS Express, Express, Express Biliary, and Liberte stents infringe on JNJ's Palmaz Patent. Additionally, the jury found that BSX's Liberte bare metal stent infringes on JNJ's Gray patent. BSX has already stated its intention to appeal the verdict and any potential award. A separate trial is scheduled to determine awards. JNJ is seeking $844 million in damages claiming lost profits related to the Palmaz patent. Damages related to the Gray patent will be litigated only as they relate to the bare metal version of Liberte, not the drug-eluting version launched in various international markets. A separate trial would be required if JNJ chooses to sue BSX, citing the Gray patent, over the drug-eluting version of Liberte when and if it is launched in the U.S. The Palmaz patent expires in November 2005, and the Gray patent expires in 2016. The potential award from both verdicts, coupled with a previous verdict against BSX (a retrial retrial n. a new trial granted upon the motion of the losing party, based on obvious error, bias or newly-discovered evidence. (See: newly-discovered evidence) of a case, which awarded JNJ $324 million), could be significant, in the $1 billion-$1.5 billion range. However, Fitch anticipates that any actual payment of an award would not materialize for several years and would not affect BSX's rating given the strength of the company's credit profile, cash flow generation, and liquidity. Additionally, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. has begun regarding BSX's claim that JNJ stent technology infringes on BSX's Ding patent. A favorable outcome in this trial may serve to reduce or mitigate the impact from the negative verdicts against BSX. BSX's ratings reflect BSX's strong credit profile, leading market positions, and robust cash generation offset by product concentration and litigation risks. For the past 12 months ended March 31, 2005, BSX's coverage (EBITDA/interest) was 30.6 times (x) and leverage (total debt/EBITDA) 0.7x. BSX generated net cash flow from operating activities of $2.2 billion and free cash flow was $1.9 billion after $291 million in capital expenditures for the LTM LTM abbr. long-term memory ended March 31, 2005. Total debt at March 31, 2005 was $1.5 billion and cash was $956 million. Liquidity is provided by a $2.0 billion commercial paper program, supported by $2.165 billion in bank credit facilities. A $100 million accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying facility provides additional liquidity and flexibility. BSX's ratings by Fitch are as follows: -- Senior unsecured notes at 'A'; -- $2.165 billion unsecured bank credit facility 'A'; -- Commercial paper 'F1'. The Rating Outlook is Stable. Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from this site, at all times. This document will remain on the public site for seven days. |
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