S&P: Boston Scientific unaffected

Standard & Poor's said that the settlement between Boston Scientific Corp. (A/stable/A-1) and Medinol Ltd. announced on Sept. 21 has no impact on the rating or outlook on Boston Scientific.

While material, the $750 million payment to be made by the company is smaller than the $2 billion to $4 billion that had been sought by Medinol, and the settlement resolves the uncertainty of ongoing litigation, the agency said.

Despite recent softness in sales of the Taxus drug-eluting stent (DES), Boston Scientific should still have strong free cash flow; free operating cash flow for the 12 months ended June was almost $1.7 billion. The company recently received CE Mark approval for its next-generation DES, which can now be launched in European markets, and U.S. introduction is anticipated in 2006.

In increase in commercial paper to finance the settlement payment is expected to be partly offset by the paydown of a $400 million Japanese bank facility that matures this week.

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