Aug. 16 (Bloomberg) -- Boston Scientific Corp. is considering selling two surgical tools businesses to cut costs as sales decline for its mainstay products, drug-coated heart stents and implantable defibrillators.

The company, the world's second-largest maker of heart devices, is in talks with ``several potential buyers'' for the cardiac and vascular surgery units and expects any transactions to take ``a number of months,'' according to a statement today.

Boston Scientific agreed last week to pay $1.15 billion to undo the 2004 acquisition of Advanced Bionics and keep its pain management business. The Natick, Massachusetts-based company has been hurt by falling sales of stents, the tiny mesh tubes that prop open diseased arteries, and defibrillators, which shock stopped hearts to normal rhythm.

``Anything the company can do to cut costs, raise capital and help focus their business is good at this point,'' said Joanne Wuensch, an analyst with BMO Capital Markets in New York, in a telephone interview today. ``I don't think they have their backs against a wall, but there are some warning signals.''

The cardiac and vascular businesses, which make tools for heart bypass surgery and patches to repair valves, have a combined 700 employees and generated revenue of $275 million in 2006, the company said in the statement.

Guidant Purchase

The company said it acquired the cardiac surgery business in April 2006 as part of its $27.5 billion purchase of Guidant Corp., and it established the vascular surgery unit with the purchase of Meadox Medicals in 1995.

Boston Scientific rose 17 cents to $12.91 as of 5:58 p.m. in extended trading after the announcement. It fell to $12.74, the lowest in about five years, in regular New York Stock Exchange composite trading. The stock has declined 26 percent this year.

A possible sale of the two units is part of the company's strategy of divesting some investments and selling non-strategic assets, said Paul Donovan, a spokesman for Boston Scientific, in a telephone interview today.

``We have businesses that we acquired over time that we consider no longer strategic to our core enterprise,'' which is interventional cardiology, cardiac rhythm management, endosurgery and pain management, he said. ``This is part of a broader strategy to improve our operating and financial performance and ultimately increase shareholder value.''

Demand for stents that are infused with medicine, to prevent scar tissue from forming around the device, have shrunk in the past year after studies linked the drug-coated models to a higher rate of blood clots when compared with the older, bare-metal versions. Research also showed that the devices weren't better than drugs in treating heart disease.

Orders Hurt

Recalls of the implantable defibrillators prompted caution among doctors and patients and hurt orders for the $30,000 stopwatch-size devices that are surgically inserted into the chest.

Boston Scientific had $8.9 billion of debt on June 30, compared with $2 billion before the Guidant acquisition last year. After the company decided not to sell part of its endosurgery unit, Standard & Poor's and Fitch cut their ratings on its debt to below investment grade, or junk status, on Aug. 3.

Last month the company said it's considering selling a fluid-management business, which makes products used to surgically repair blood vessels.

To contact the reporter on this story: Emily Brown in Washington at ebrown18@bloomberg.net.

Last Updated: August 16, 2007 19:21 EDT