The Motley Fool: New Studies Threaten a Rich Source of Med-Tech Profits

Stents have been with us for about 20 years now, and they have definitely made a significant impact in both the treatment of coronary artery disease and the med-tech landscape. As the leaders in the space, stents have become valuable profit centers for Abbott Labs (NYSE: ABT  ) , Medtronic (NYSE: MDT  ) , and Boston Scientific (NYSE: BSX  ) , which collectively control the U.S. stent market (with more than 80% combined share) since the 2011 departure of Johnson & Johnson. Stents provide not only a meaningful percentage of revenue to these companies (from 7% at Abbott to 16% at Boston Scientific), but generally above-average margins as well.

The growth of the stent market has not been without controversy. Almost from day one, some clinicians have argued that stents are not necessary and add more to cost of managing patients than they deliver in benefits. This isn't a trivial issue for Abbott, Medtronic, or Boston Scientific. Above and beyond the revenue they reap from stents themselves, they are central to the company's vascular product sales efforts. While Medtronic's transcatheter heart valve business could stand on its own, Abbott and Boston Scientific would both see significant headwinds and sales deleverage in the face of meaningful stent revenue declines. That, in turn, would undermine the growth in vascular devices that both Abbott and Boston Scientifc are counting on from newer products like the MitraClip and Watchman.

With that, threats to the stent industry have above-average significance to all three of these companies.

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New Studies Threaten a Rich Source of Med-Tech Profits