Annual Report - Merrill Lynch & Co., Inc. - Investor Relations

Neurovascular
In January 2011, we closed the sale of our Neurovascular business
to Stryker Corporation. This business markets a broad line of
coated and uncoated detachable coils, micro-delivery stents,
micro-guidewires, micro-catheters, guiding catheters and
embolics to neuro-interventional radiologists and neurosurgeons
to treat diseases of the neurovascular system. In 2010, we
marketed the GDC ® Coils (Guglielmi Detachable Coil) and Matrix ®
systems to treat brain aneurysms and, in late 2010, we received
FDA approval for the next-generation family of detachable coils,
which includes an enhanced delivery system designed to reduce
coil detachment times, and began a phased launch of the product.
We also offered the NeuroForm ® stent system, and launched the
Neuroform EZ stent system, a fourth-generation intracranial
aneurysm stent system designed for use in conjunction with
endovascular coiling to treat wide-necked aneurysm, and the
Wingspan ® Stent System with Gateway ® PTA Balloon Catheter,
each under a Humanitarian Device Exemption approval granted by
the FDA. The Wingspan Stent System is designed to treat
atherosclerotic lesions or accumulated plaque in brain arteries.
Designed for the brain’s fragile vessels, the Wingspan Stent
System is a self-expanding, nitinol stent sheathed in a delivery
system that enables it to reach and open narrowed arteries in the
brain. The Wingspan Stent System is currently the only device
available in the U.S. for the treatment of intracranial atherosclerotic
disease (ICAD) and is indicated for improving cerebral
artery lumen diameter in patients with ICAD who are
unresponsive to medical therapy.
Innovation
Our approach to innovation combines internally-developed products
and technologies with those we may obtain externally
through strategic acquisitions and alliances. Our research and
development efforts are focused largely on the development of
next-generation and novel technology offerings across multiple
programs and divisions. Since 1995, we have undertaken
strategic acquisitions to assemble the lines of business necessary
to achieve the critical mass that allows us to continue to be a
leader in the medical device industry. We expect to continue to
invest in our core franchises, and also investigate opportunities to
further expand our presence in, and diversify into, priority growth
areas including atrial fibrillation, autonomic modulation therapy,
coronary artery disease, deep-brain stimulation, diabetes/obesity,
endoluminal surgery, endoscopic pulmonary intervention, hypertension,
peripheral vascular disease, structural heart disease,
sudden cardiac arrest, and women’s health. We have recently
announced several acquisitions targeting many of the above
PART I
BOSTON SCIENTIFIC AND SUBSIDIARIES — 6 —
conditions and disease states. In 2010, we completed the acquisition
of Asthmatx, Inc., and in January 2011, we completed the
acquisitions of Sadra Medical, Inc. and Intelect Medical, Inc., and
announced the signing of a definitive merger agreement to
acquire Atritech, Inc., each discussed above. There can be no
assurance that technologies developed internally or acquired
through acquisitions and alliances will achieve technological
feasibility, obtain regulatory approvals or gain market acceptance,
and any delay in the development or approval of these technologies
may adversely impact our future growth.
Research and Development
Our investment in research and development is critical to driving
our future growth. We expended $939 million on research and
development in 2010, $1.035 billion in 2009 and $1.006 billion in
2008, representing approximately 12 to 13 percent of our net
sales each year. Our investment in research and development
reflects:
‰ regulatory compliance, clinical science, and internal research
and development programs, as well as others obtained
through our strategic acquisitions and alliances; and
‰ sustaining engineering efforts which incorporate customer
feedback into continuous improvement efforts for currently
marketed and next-generation products.
We have directed our development efforts toward regulatory
compliance and innovative technologies designed to expand
current markets or enter new markets. We are looking to transform
the way we conduct research and development, leverage
low-cost geographies, and scrutinize our cost structure, which we
expect will generate significant savings over the next three years.
Our approach to new product design and development is through
focused, cross-functional teams. We believe that our formal
process for technology and product development aids in our
ability to offer innovative and manufacturable products in a consistent
and timely manner. Involvement of the research and
development, clinical, quality, regulatory, manufacturing and
marketing teams early in the process is the cornerstone of our
product development cycle. This collaboration allows these teams
to concentrate resources on the most viable and clinically relevant
new products and technologies, and focus on bringing them to
market in a timely and cost effective manner. In addition to
internal development, we work with hundreds of leading research
institutions, universities and clinicians around the world to
develop, evaluate and clinically test our products. We believe our
future success will depend upon the strength of these development
efforts.