Boston Scientific Third Quarter Earnings Meet Expectations

Posted on October 26, 2018 by Medtech[y] Staff


Boston Scientific (NYSE: BSX) reported third-quarter results, meeting expectations by posting organic growth of 8.7% compared to the third-quarter of 2017. 

Results:

  • Reported third quarter sales of $2.393 billion, compared to the company's guidance range of $2.380 to $2.420 billion, representing an increase of 7.7 percent on a reported basis, 9.1 percent on an operational basis and 8.7 percent on an organic basis, all compared to the prior year period.

                                                            

  • Reported GAAP earnings of $0.31 per share compared to the company's guidance range of $0.21 to $0.23 per share. Achieved adjusted earnings per share of $0.35 compared to the guidance range of $0.33 to $0.35 per share.
                                                                
  • Achieved third quarter revenue growth in all segments, compared to the prior year period:
    • MedSurg: 10.3 percent reported, 11.7 percent operational and 11.0 percent organic
    • Rhythm and Neuro: 7.4 percent reported, 8.3 percent operational and organic
    • Cardiovascular: 5.9 percent reported, 7.7 percent operational and 7.2 percent organic

Delivered revenue growth in all regions, compared to the prior year period:

  • U.S.: 9.4 percent reported and operational
  • EMEA (Europe, Middle East and Africa): 5.1 percent reported and 7.4 percent operational
  • APAC (Asia-Pacific): 6.2 percent reported and 8.1 percent operational
  • Emerging Markets3: 11.1 percent reported and 19.7 percent operational

What They Said:

"Our strong results reflect our global team's focused efforts to execute our category leadership strategy and advance the standard of care," said Mike Mahoney, chairman and chief executive officer, Boston Scientific. "Through internal research and tuck-in acquisitions, we continue to bring meaningful innovations to market, enabling our customers to deliver life-changing care to millions of patients around the world."

Highlights:

                                                            

  • Received U.S. Food and Drug Administration (FDA) approval for the Eluvia Drug-Eluting Vascular Stent System, following the release of positive 12-month data from the IMPERIAL trial, the first head-to-head drug-eluting stent (DES) trial for obstructive disease of the superficial femoral artery. Patients treated with the Eluvia stent experienced superior clinical outcomes when compared to those treated with Zilver PTX (Cook Medical). IMPERIAL data were presented simultaneously at the 30th Transcatheter Cardiovascular Therapeutics (TCT) symposium and the Cardiovascular and Interventional Radiological Society of Europe (CIRSE) congress.
                                                                
  • Submitted the premarket approval (PMA) application for the LOTUS Edge Aortic Valve System4, which included the filing of the final technical module.
                                                                
  • Began enrollment in the SAVAL Trial, studying the SAVAL Below the Knee (BTK) Drug-Eluting Stent System, which is designated for the FDA Breakthrough Device protocol and is the first stent designed to treat critical limb ischemia.
                                                                
  • Received FDA approval for the Promus ELITE Everolimus-Eluting Platinum Chromium Coronary Stent System, an enhanced permanent polymer DES (PP-DES) therapy offering for physicians who choose PP-DES as a treatment option for their patients.
                                                                
  • Received FDA approval for the VISIONIST X4 Cardiac Resynchronization Therapy Pacemaker (CRT-P) and RELIANCE 4-FRONT Defibrillation Lead in the U.S. Both products also received MR-conditional labeling and are a part of the Rhythm Management ImageReady MR-conditional Systems portfolio with offerings now approved and available in all high and low-voltage device categories.
                                                                
  • Received determination from the District Court of Dusseldorf, Germany that Edwards Lifesciences Corporation's Sapien 3 Ultra device infringed a patent established by Symetis SA, a subsidiary of Boston Scientific. The Court ruled in preliminary injunction proceedings that Boston Scientific has the right to enjoin Edwards and its German subsidiary from offering and selling Sapien 3 Ultra in Germany.
                                                                
  • Presented two-year EWOLUTION real world registry data on the WATCHMAN Left Atrial Appendage Closure (LAAC) Device as a late-breaking clinical trial at the European Society of Cardiology Congress and as a keynote presentation at TCT 2018. Data demonstrated the WATCHMAN Device continues to be a safe and effective alternative to long-term warfarin therapy, offering comparable stroke risk reduction and a significantly reduced risk of major bleeding for patients with non-valvular atrial fibrillation (AF).
                                                                
  • Completed enrollment in PINNACLE FLX, the prospective, multi-center clinical trial of the WATCHMAN FLX LAAC Device. The newest generation LAAC device is designed to treat a wider range of patient anatomies, increase ease of use, and improve sealing and healing within the left atrial appendage.
                                                                
  • Launched the LithoVue Empower Retrieval Deployment Device, designed to enable individual urologists to remove kidney stones via flexible ureteroscopy (URS) by simultaneously controlling the ureteroscope and nitinol retrieval basket without a second clinician.
                                                                
  • Launched the GUIDE XT System for visualization of Deep Brain Stimulation (DBS) in Europe. The GUIDE XT System is the first DBS visualization system built for directionality that utilizes patient specific anatomy and stimulation field modeling. This technology provides physicians with 3-D image planning capability and when used in conjunction with the Vercise DBS Systems, enables physicians to personalize and optimize DBS treatment.
                                                                
  • Closed the acquisition of Claret Medical, Inc., a privately-held company that has developed and commercialized the Sentinel® Cerebral Embolic Protection System, used to protect the brain during certain interventional procedures, predominately in patients undergoing transcatheter aortic valve replacement (TAVR), and received a New Technology Add-on Payment (NTAP) designation for the Sentinel System from the U.S. Centers for Medicare and Medicaid Services (CMS).
                                                                
  • Closed the acquisition of VENITI, Inc., a privately-held company that has developed and commercialized the VICI VENOUS STENT System for treating venous obstructive disease.
                                                                
  • Closed the acquisition of Augmenix, Inc., a privately-held company that has developed and commercialized the SpaceOAR System, a therapy used to reduce common and debilitating side effects that men may experience after receiving prostate cancer radiotherapy.

Going Forward

Boston Scientific now estimates revenue for the full year 2018 to be in a range of $9.787 to $9.827 billion (compared to prior guidance of $9.800 to $9.880 billion), which versus the prior year period represents a growth range of approximately 8 to 9 percent on a reported basis and growth of approximately 7 percent on an organic basis excluding the impact of foreign currency fluctuations and contribution of approximately 80 basis points from recent acquisitions with no prior period related net sales. 

The company now estimates income on a GAAP basis in a range of $1.08 to $1.10 per share (compared to prior guidance of $0.99 to $1.03 per share) and estimates adjusted earnings, excluding amortization expense, intangible asset impairment charges, acquisition-related net charges (credits), restructuring and restructuring-related net charges (credits), litigation-related net charges, certain investment impairments and certain discrete tax items, in a range of $1.38 to $1.40 per share (compared to prior guidance of $1.37 to $1.41 per share).

The company estimates sales for the fourth quarter of 2018 to be in a range of $2.525 to $2.565 billion, which versus the prior year period represents a growth range of approximately 5 to 7 percent on a reported basis and a growth range of approximately 6 to 7 percent on an organic basis, excluding the impact of foreign currency fluctuations and contribution of approximately 120 basis points from recent acquisitions with no prior period related net sales. 

The company estimates earnings on a GAAP basis in a range of $0.15 to $0.17 per share and adjusted earnings, excluding amortization expense, acquisition-related net charges (credits) and restructuring and restructuring-related net charges (credits), in a range of $0.30 to $0.32 per share. Both GAAP and adjusted earnings per share include $0.06 of reinvestment of the $0.06 Q2 2018 benefit from the finalization of the IRS Stipulation of Settled Issues.