Boston Scientific Corporation Update on Cardiology Business
Boston Scientific Corporation (NYSE: BSX) provided a comprehensive update on its cardiology sector during its latest earnings call. Senior Vice President Jon Monson, along with the leadership team, including Executive Vice President Joe Fitzgerald, discussed the company's strategic growth within the cardiology market, which is valued at nearly $40 billion and expected to grow at a CAGR of approximately 8% through 2027.
The company highlighted substantial year-to-date growth rates of 27% in the U.S. and 18% internationally, fueled by strong performances in the ICTx and EP sectors, alongside the WATCHMAN franchise. Despite challenges, such as the COVID-19 pandemic affecting a significant TAVR trial, Boston Scientific remains committed to its cardiology offerings, emphasizing recent product approvals and ongoing FDA discussions for future market developments.
Key Takeaways
- The cardiology market is projected to grow at an 8% CAGR through 2027, with Boston Scientific achieving significant growth.
- Recent product approvals include the FARAVIEW mapping software and FARAWAVE NAV catheter.
- The company is shifting focus from drug-eluting stents, with successful AGENT product line launches.
- The ACURATE platform experienced 20% revenue growth in EMEA, surpassing $200 million.
- Although the ACURATE IDE trial did not meet its primary endpoint, post-hoc analysis indicates potential for improved outcomes.
- Ongoing FDA discussions underscore the company's commitment to the U.S. TAVR program and structural heart market.
- Boston Scientific is investing in mitral and tricuspid therapies, concentrating on repair and replacement options.
Company Outlook
- Boston Scientific anticipates continued growth in the cardiology sector, positioning itself to leverage this trend.
- The company aims to double its global drug-coated balloon business by 2025.
Highlights
Bearish Highlights
- The ACURATE IDE trial saw slow enrollment due to the pandemic and did not achieve its primary endpoint.
Bullish Highlights
- The ACURATE platform is expanding in both Europe and the U.S. structural heart market.
- The WATCHMAN FLX Pro device successfully met safety and efficacy endpoints.
- The FARAWAVE and OPAL systems are expected to enhance market share due to their unique features.
Misses
- The ACURATE neo2 valve trial did not demonstrate noninferiority, with a median difference of 6.63 against an 8% margin.
Q&A Highlights
- The company is actively engaging with the FDA regarding product approvals, including the ACURATE Prime approval process.
- Executives reaffirmed their dedication to the ACURATE platform and collaborative efforts with the FDA to explore regulatory pathways in the U.S. and Japan.
- The FDA has permitted continued enrollment in the extended durability cohort of a trial due to enhanced training and improved operator adherence.
In conclusion, Boston Scientific's earnings call outlined the company's strategic direction in the cardiology market. Despite facing certain challenges, the company remains dedicated to innovation and market expansion, indicated by multiple product launches and ongoing investments that underscore a strong commitment to long-term growth. The call's recording and presentation slides will be available on the Investor Relations website until November 6, 2024.
InvestingPro Insights
- Boston Scientific Corporation's (NYSE: BSX) robust performance in the cardiology market is reflected in its recent financial indicators and market position, with a market capitalization of $123.14 billion.
- The company reported a revenue growth of 15.66% over the past year, with a significant 19.34% increase in the latest quarter, aligning with the positive growth rates discussed in the earnings call. This momentum supports the InvestingPro Tip highlighting the expected growth in net income this year, reinforcing Boston Scientific's optimistic outlook in the expanding cardiology market.
- Boston Scientific’s gross profit margin stands at 68.95%, while its operating income margin is at 17.99%, reflecting the company’s capacity to maintain profitability while investing in innovation and market expansion. This financial health is essential for supporting ongoing investments in mitral and tricuspid therapies, as well as the development of new products like the FARAVIEW mapping software and FARAWAVE NAV catheter.
- An InvestingPro Tip reveals that 20 analysts have raised their earnings forecasts for the forthcoming period, indicating strong confidence in the company's prospective performance influenced by Boston Scientific's promising product pipeline and strategic positioning in high-growth cardiology market segments.
- The company’s excellent one-year price total return of 59.19% reflects investor enthusiasm regarding Boston Scientific's growth strategy and market performance. This correlates with another InvestingPro Tip indicating substantial returns over the last year, likely due to the success of products like the WATCHMAN franchise and the expanding ACURATE platform in Europe.
- InvestingPro offers an additional 17 insights for Boston Scientific, providing a more in-depth analysis of the company's financial health and market position.
Full transcript – Boston Scientific Corp (BSX) Q1 2023
Operator: Good day, and welcome to the Boston Scientific Cardiology Business Update. Please note, this event is being recorded. I would like now to turn the program over to Jon Monson, Senior Vice President of Investor Relations. Please go ahead.
Jonathan Monson: Thank you, Alan, and welcome, everyone, on the webcast. We have our Cardiology leadership team here today, including Joe Fitzgerald, Executive Vice President and Group President, Cardiology; Lance Bates, Senior Vice President and President, ICTx; Dr. Janar Sathananthan, Chief Medical Officer, ICTx; and Dr. Ken Stein, our Chief Medical Officer, who will join for the Q&A. Before we begin, we have a few housekeeping items. The duration of today's call will be approximately one hour. Q&A will follow our presentation, and we'll take questions through the webcast. We'll be making forward-looking statements, and you can see our typical safe harbor and risk factors apply. Here are our regulatory and financial disclaimers.
At this point, I'll turn the call over to Joe.
Joseph Fitzgerald: Thanks, Jon. I appreciate it, and thanks, everyone, for joining us. Just an update on our Cardiology served markets. Today, we call this nearly a $40 billion market in the cath lab, growing at approximately 8% CAGR through 2027. This is particularly encouraging as we have multiple large, fast-growing markets today. Our dependency on devices like DES and defibrillators has transformed, leading to multiple growth pillars in the market. Looking at year-to-date growth, the U.S. has been growing at 27%, while international growth is at 18%. The individual growth rates and drivers are indicated in the previous slides. Notably, our Q3 performance in Cardiology reflected accelerated growth in both ICTx and our EP business, alongside solid growth from the WATCHMAN franchise.
I won't delve deeply into the ICTx section, as Lance will cover that, but I’d like to share a recent success in the EP business—our recent approval for the FARAVIEW mapping software module on OPAL. We also received PMA supplemental approval for our FARAWAVE NAV for mapping and ablation catheters. I'm pleased to report that we went live in multiple accounts mid-this week, demonstrating the benefit of mapping and the efficiency brought by the FARAVIEW application in various sites.
Now, I will turn it over to Lance Bates, our President of Interventional Cardiology Therapies.
Lance Bates: Hi there, everybody. This is Lance Bates. I'll discuss the details on the markets we serve. The growth in the cardiology space is around 8% through 2027, amounting to roughly $15 billion. Our drug-eluting therapies, including drug-eluting stents and drug-coated balloons, continue to show double-digit growth, with now less than 5% of our total sales from drug-eluting stents. We are increasingly diversifying our portfolio away from drug-eluting stents, and it's worth noting the success of our AGENT launch in the U.S. We expect the global drug-coated balloon business to double by 2025.
In the complex PCI area, we are witnessing substantial growth in our calcium portfolio, including Rotablator and WOLVERINE, where we realize mid-teens growth in Q3 and anticipate this momentum to continue into 2025. Our PCIG segment, which includes physiology and capital equipment for IVUS, is also outpacing market growth, with our IVUS artifact share now exceeding 50%.
Turning to TAVR performance, we have seen near 20% growth in EMEA, contributing to over $200 million in revenue. The ACURATE Prime platform recently launched, demonstrating strong momentum following its clinical performance.
To summarize, we continue to invest in mechanical circulatory support and high-growth markets, and we shall proceed with our IDE in the U.S. by late 2025.
ACURATE IDE Trial Update
Janar Sathananthan: Thank you, Lance. I'm now providing details on the ACURATE IDE trial, a significant randomized controlled trial consisting of 1,500 patients, with randomization into test and control groups. The composite endpoint of all-cause mortality, stroke, or rehospitalization at one year was not met, although a post-hoc analysis indicated concerning findings on valve under expansion.
Moving forward, we've launched the ACURATE Prime platform, which boasts increased radial force and additional sizing, enhancing patient population availability significantly.
We value participating in the Sphere Technology Conference where more comprehensive data regarding ACURATE will be presented. The WATCHMAN FLX Pro device performed exceptionally well and further directives are underway to enhance our structural heart capabilities. Thank you.
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