Boston Scientific Announces Results For Second Quarter 2017

Published: Jul 27, 2017

MARLBOROUGH, Mass., July 27, 2017 /PRNewswire/ -- Boston Scientific Corporation (NYSE: BSX) generated sales of $2.257 billion during the second quarter ended June 30, 2017. This represents growth of 6 percent on a reported basis and 7 percent on an operational basis (excludes the impact of changes in foreign currency exchange rates), all compared to the prior year period. The company reported GAAP earnings of $146 million or $0.11 per share (EPS), compared to a GAAP loss of $207 million or $(0.15) a year ago, and achieved adjusted earnings per share of $0.32 for the period, compared to $0.27 a year ago.

Boston Scientific Corporation (PRNewsFoto/Boston Scientific Corporation) (PRNewsFoto/Boston Scientific Corporation)

"Our strong financial performance in the first half of 2017 reflects our innovative portfolio of products and solutions and execution of our category leadership strategy," said Mike Mahoney, chairman and chief executive officer, Boston Scientific. "Our team continues to drive results while also investing in multiple high growth markets where we expect our portfolio will have a meaningful impact on customers and their patients."

Second quarter financial results and recent developments:

  • Reported second quarter sales of $2.257 billion, compared to the company's guidance range for the quarter of $2.185 to $2.215 billion, representing an increase of 6 percent on a reported and 7 percent on an operational basis, all compared to the prior year period.

  • Grew organic revenue 6 percent in the second quarter over the prior year period. Organic revenue growth excludes the impact of changes in foreign currency exchange rates and sales from the acquisition of EndoChoice Holdings, Inc. (EndoChoice) as well as recently acquired Symetis SA (Symetis).

  • Reported GAAP earnings of $0.11 per share compared to the company's guidance range of $0.18 to $0.21 per share, primarily due to litigation-related charges. Achieved adjusted earnings per share of $0.32 compared to the guidance range of $0.30 to $0.32 per share.

  • Achieved second quarter revenue growth in all segments, all compared to the prior year period:
    • MedSurg: 11 percent reported, 12 percent operational, and 10 percent organic
    • Cardiovascular: 5 percent reported and organic, and 6 percent operational
    • Rhythm Management: 2 percent reported, 3 percent operational and organic
  • Delivered strong revenue growth in the U.S. and AMEA, all compared to the prior year period:
    • U.S.: 9 percent reported and operational, 7 percent organic
    • Europe: 1 percent reported, 4 percent operational and 2 percent organic
    • AMEA (Asia-Pacific, Middle East and Africa): 5 percent reported, 7 percent operational and organic
    • Emerging markets:1 13 percent reported, 15 percent operational and 14 percent organic
  • Closed the acquisition of Symetis, a privately-held Swiss structural heart company, for approximately $430 million in cash, enabling the company to provide physicians with multiple transcatheter aortic valve replacement (TAVR) offerings for the treatment of patients with valvular heart disease.

  • Announced positive results from the pivotal global randomized TAVR study at the annual EuroPCR Scientific Congress, demonstrating LOTUS Valve System2 superiority over a CoreValve® TAVR System platform3 for the primary composite effectiveness endpoint and non-inferiority for the primary composite safety endpoint. Also presented results for the ACURATE neo/TF4 valve in the SAVI-TF Registry, confirming safety and efficacy of the valve out to one year, as well as demonstrating the lowest new pacemaker rate seen in a major TAVR trial.

  • Presented positive safety and efficacy rates for the WATCHMAN Left Atrial Appendage Closure (LAAC) Device from the EWOLUTION European registry at the Heart Rhythm Society's Annual Scientific Sessions. Data confirmed that the WATCHMAN device had a high implant success rate and was effective in stroke reduction (compared to expected rate) in patients with non-valvular atrial fibrillation, including patients deemed unsuitable for oral anticoagulation.

  • Completed patient enrollment of the SALUTE trial, designed to pursue regulatory approval of the WATCHMAN device in Japan, which the company expects to receive in 2019.

  • Announced the first ever Expedited Access Pathway designation in the peripheral branch of the U.S. Food and Drug Administration (FDA) for the study of a drug-eluting vascular stent system for the treatment of critical limb ischemia below the knee,5 a condition for which there are currently few effective treatment options.

  • Received FDA approval for the RESONATE family of implantable cardioverter defibrillator (ICD) and cardiac resynchronization therapy defibrillator (CRT-D) systems. The new devices combine the EnduraLife longest-lasting battery technology, SmartCRT therapy optimization and compatibility with the HeartLogic Heart Failure Diagnostic Service6 to help physicians improve heart failure management.

  • Received CE Mark for the Vercise Gevia Deep Brain Stimulation (DBS) System,7 the industry's first MR-conditional directional DBS system for the treatment of movement disorder symptoms in patients with Parkinson's disease, dystonia and essential tremor.

  • Presented post approval study results at the American Thoracic Society International Conference that demonstrated the Alair Bronchial Thermoplasty System reduced complications, including severe asthma exacerbations and asthma-related hospitalizations, in adult patients with severe persistent asthma.

 

  1. We define Emerging Markets as including certain countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities. Currently, we include 20 countries in our definition of Emerging Markets.
  2. The Lotus Valve devices are currently not available for use or sale.
  3. CoreValve is a registered trademark of Medtronic.
  4. The ACURATE neo/TF valve system is not available for use or sale in the US.
  5. Device under development. Not available for use or sale. 
  6. The HeartLogic Heart Failure Diagnostic Service is not currently available for use or sale.
  7. The Vercise Gevia system is CE Marked. Not available for use or sale in the U.S.

 

Net sales for the second quarter:






Change




Three Months Ended
June 30,


As Reported Basis


Less: Impact of Foreign Currency


Operational
 Basis


(in millions)

2017

2016




















   Interventional Cardiology

$

603


$

579



4


%


(1)


%


5


%

*


   Peripheral Interventions

273


258



6


%


(1)


%


7


%



Cardiovascular

876


837



5


%


(1)


%


6


%



   Cardiac Rhythm Management

480


477



1


%


(1)


%


2


%



   Electrophysiology

67


60



12


%


(1)


%


13


%



Rhythm Management

547


537



2


%


(1)


%


3


%



   Endoscopy

400


361



11


%


(1)


%


12


%

*


   Urology and Pelvic Health

280


256



10


%


0


%


10


%



   Neuromodulation

154


135



14


%


0


%


14


%



MedSurg

834


752



11


%


(1)


%


12


%
















Net Sales

$

2,257


$

2,126



6


%


(1)


%


7


%
















*Interventional Cardiology grew 4% on an organic basis and Endoscopy grew 7% on an organic basis.















Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.



Sales growth rates that exclude the impact of changes in foreign currency exchange rates and/or the impact of recent acquisitions with significant sales are not prepared in accordance with U.S. GAAP. An explanation of the company's use of these non-GAAP financial measures is included in the exhibits attached to this news release.

Guidance for Full Year and Third Quarter 2017

The company now estimates revenue for the full year 2017 to be in a range of $8.890 to $8.990 billion (compared to prior guidance of $8.800 to $8.900 billion), which versus the prior year period, represents a growth range of approximately 6 to 7 percent on a reported basis and a growth range of approximately 6 to 8 percent on an operational basis including contribution of approximately 120 basis points from EndoChoice and Symetis. The company now estimates income on a GAAP basis in a range of $0.70 to $0.74 per share (compared to prior guidance of $0.81 to $0.86 per share) and now estimates adjusted earnings, excluding acquisition-related net charges, restructuring and restructuring-related net charges, litigation-related net charges, certain investment impairment charges and amortization expense, in a range of $1.23 to $1.27 per share (compared to prior guidance of $1.22 to $1.26 per share).

The company estimates sales for the third quarter of 2017 to be in a range of $2.180 to $2.210 billion, which versus the prior year period represents a growth range of approximately 4 to 5 percent on a reported basis  and a growth range of  approximately 5 to 6 percent on an operational basis including contribution of approximately 140 basis points from EndoChoice and Symetis. The company estimates earnings on a GAAP basis in a range of $0.16 to $0.18 per share. Adjusted earnings, excluding acquisition-related net charges, restructuring and restructuring-related net charges and amortization expense, are estimated in a range of $0.29 to $0.31 per share.

Conference Call Information

Boston Scientific management will be discussing these results with analysts on a conference call today at 8:00 a.m. (ET). The company will webcast the call to interested parties through its website: www.bostonscientific.com. Please see the website for details on how to access the webcast. The webcast will be available for approximately one year on the Boston Scientific website.

About Boston Scientific

Boston Scientific transforms lives through innovative medical solutions that improve the health of patients around the world.  As a global medical technology leader for more than 35 years, we advance science for life by providing a broad range of high performance solutions that address unmet patient needs and reduce the cost of healthcare. For more information, visit www.bostonscientific.com and connect on Twitter and Facebook.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like "anticipate," "expect," "project," "believe," "plan," "estimate," "intend," "aiming" and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance.

To read full press release, please click here.

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