Boston Scientific Corp.'s Maple Grove plant will cut about 100 jobs starting in January, following a decision to wind down one of the company's TAVR valve programs.
Boston Scientific plans to cut 106 jobs in Twin Cities
Decision to drop heart valve means 100 jobs lost at Maple Grove plant.
November 19, 2020 at 3:05PM
A TAVR valve is a new and popular kind of heart valve that can be implanted without a chest incision, because it's folded up in a thin tube called a catheter and then slid into place through the blood vessels. (TAVR stands for transcatheter aortic valve replacement.)
Boston Scientific CEO Mike Mahoney said in an announcement Tuesday that the company has decided to stop manufacturing and making investments in the Lotus Edge Aortic Valve System because of ongoing problems with the valve's delivery device.
The decision means layoffs for approximately 106 engineers, analysts, sales reps, managers and others. The layoff notice from the Minnesota Department of Employment and Economic Development says the terminations will begin on Jan. 19, following 60 days' notice.
Like all TAVR valves, the Lotus valve requires the use of an intricate, single-use deployment tool that is threaded through the blood vessels. But problems with the Lotus deployment system led to a 2017 recall of the device and delays in its market launch in the U.S.
"The complexity of the delivery system, manufacturing challenges, the continued need for further technical enhancements, and current market adoption rates led us to the difficult decision to stop investing in the Lotus Edge platform," Mahoney's statement said.
Analysts with debt-rating firm S&P Global Ratings said the decision holds "limited" impact for Boston Scientific as a whole, since the Lotus accounts for less than 1% of sales, including $75 million this year and about $125 million projected for next year.
The move will result in $225 million to $300 million in pretax charges, mainly recorded in the fourth quarter. After that, "the company expects its decision to retire the Lotus platform to be accretive to its 2021 earnings because of the product's low profitability, resulting from its limited scale and niche market position," the S&P analysts wrote.
The decision means Medtronic, run from offices in Fridley, and Edwards Lifesciences in California sell the only two TAVR valves commercially approved in the U.S. Boston Scientific is working toward 2024 U.S. approval for its other TAVR system, the Acurate Neo2.
Global sales of TAVR valves are estimated at roughly $4 billion today, according to an analysis from Market Reports World.
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