Boston Scientific's New CEO Wants To Diversify Products

Boston Scientific Corp.'s (BSX) incoming chief executive said on Thursday that wants to diversify the medical-device company's offerings and that he sees a "target rich" environment for deals outside the company if needed.

The Natick, Mass., company, well known for high-tech heart devices such as stents and implantable defibrillators, announced that long-time chief executive Jim Tobin is retiring next month after 10 years at the helm. Ray Elliott, formerly the CEO of orthopedics heavyweight Zimmer Holdings Inc. (ZMH), and also a recent Boston Scientific board member, will replace Tobin.

Investors and analysts tend to focus heavily on Boston Scientific's heart devices while giving little attention to other parts of the business, where the company has a broad array of products in areas such as pain management, gynecology and urology.

"I think we should look very hard at diversifying our products," Elliott said on a call with analysts, where he talked about expanding the company's capabilities beyond its key heart devices. He mentioned urology and women's health as areas of interest.

Elliott said he doesn't see a tradeoff in terms of losing focus on key businesses to focus on others but that he sees an opportunity to diversify. He also talked about looking outside the company at potential deals and partnerships if needed to bolster the product lineup.

"It is a target-rich environment to buy or partner with people," Elliott said.

Shares of Boston Scientific moved higher on the CEO change announcement and were recently up 5% to $9.99.

Elliott on the call also discussed his near-term plans for the company, which he'll officially take over on July 13. A top priority is lifting a corporate warning letter from the Food and Drug Administration that was issued due to problems in company plants and has taken years to resolve.

"That needs to go away and stay away," Elliott said.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; [e-mail]