Boston Scientific Corp. is floating another balloon, but not the kind doctors use to help insert one of the company's stents in a diseased artery. The medical devices giant is staggering under a $9 billion debt load, and it needs to find cash to pay it down. It doesn't help that sales of its flagship product, the drug-eluting stent, have slowed over safety concerns. This spring it mused about an IPO spinoff of its endosurgery business. Five months later, it said, "Sorry, not gonna happen."

Thursday, Aug. 16, it tried this one on for size: a possible sale of two other business units, cardiac surgery and vascular surgery. In its announcement, the firm left plenty of room for backing down: It has "initiated a process to explore" the sale. The vascular business was bought in 1995. The cardiac business was part of Guidant Corp., the Indiana heart-implant maker that Boston Sci acquired for $27 billion last year and the source of the burdensome debt the firm is now carrying. Chief operating officer Paul LaViolette reports the firm is in discussions with potential buyers. It's also looking to sell its fluid-management business. The company also promises to cut costs and staff, with details coming next quarter.

When Boston Sci dropped the endosurgery IPO idea — and the hundreds of millions of dollars it might have raised — analysts weren't amused. Two credit agencies downgraded the firm to junk status, and Standard & Poor's analyst Cheryl Richer tells The Deal she's worried the company may not meet major debt milestones early next year. With debt markets all a-roil, Boston Sci could be forced to pay exorbitant fees to renegotiate its terms. Apparently, the trial balloon didn't float investors' hopes, either. Shares opened 17 cents up Friday morning but in late trading have sunk to $12.54, 20 cents below Thursday's close. —Alex Lash

See Mar. 13 story in TheDeal.com
See Aug. 16 Boston Scientific press release
See Aug. 17 story in TheDeal.com

Tags: Biotech, pharmaceutical, healthcare, medicine