It is increasingly unlikely that Boston Scientific (NYSE:BSX) will acquire Israel stent maker Medinol despite months of negotiations, a source close to Medinol said on Monday.

"After months of negotiations the chances for signing a deal are becoming less and less," said a source close to the Israeli company, who asked not to be named.

The source declined to say why the likelihood for a deal between the two partners was slim, adding that the negotiations were very near an end. But earlier speculation said that disagreement on price was holding up the deal.

Boston Scientific officials could not be reached for comment.

In August Boston Scientific said it was in talks to acquire Medinol, its source of stents - metal mesh devices that prop open clogged major arteries.

Boston Scientific holds 22% of Medinol. The Israeli company's founders, Kobi and Judith Richter, own 64%. Another founder owns the rest.

Wall Street investment bank assesments for Medinol's value range from $2 billion to $8 billion. But Israeli media had said that the deal was likely to be based on a valuation of around $2.5 billion.

Boston Scientific has seen its share of the $2.6 billion a year stent market drop from nearly 35% 1n 1999 to between 17% to 20% in 2000. Its competitors are Guidant Corp. (NYSE:GDT), Medtronic (NYSE:MDT) and Johnson & Johnson (NYSE:JNJ). Wall Street analysts have said that Boston Scientific has not been able to keep pace with competitors because of a slowdown in its production line for new stent products. Stent assist in securing stable blood flow to the heart and in certain cases can be an alternative to bypass surgery.

The source close to Medinol said that in the past few years Boston Scientific had not fulfilled contractual commitments within the framework of partnership with Medinol.

According to the agreement, Medinol develops and produces stents while the United States company is responsible for making delivery systems for the stents as well as the marketing.

Medinol had developed four cardiac stents and four stents for peripheral vessels, most of which have completed advanced clinical trials, the source said. However, Boston Scientific has not developed the delivery devices, called balloons, the source added.

"Boston Scientifics' failure to meet production targets has hurt the success of the partnership," the Medinol source added.

Reuters