Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boston Scientific Corp (BSX, Financial) reported a 16% growth in total company operations sales and a 15% growth in organic sales, exceeding their guidance range.
- Second quarter adjusted EPS grew 15% to $0.62, surpassing the high end of their guidance range.
- The company raised its full-year organic growth guidance from 10%-12% to 13%-14%, reflecting strong momentum across its portfolio.
- Exceptional growth was noted in the US (17%), Europe (16%), and Asia Pacific (13%), driven by various product launches and market expansions.
- The FARAPULSE PFA System saw impressive 125% organic sales growth, driven by rapid adoption and positive real-world outcomes.
Negative Points
- Adjusted gross margin for the second quarter was 70.4%, contracting 160 basis points versus the prior year due to higher than expected inventory charges related to the POLARx cryoablation system.
- The company faces pricing pressures in key geographies, including China and Japan, which could impact future growth.
- Neuromodulation sales grew only 4% organically, with the Brain franchise growing low single digits due to competitive product launches.
- Cardiac Rhythm Management sales grew just 3% organically, with slightly below market growth in the US.
- The company is still awaiting approval for several key products in major markets like China and Japan, which could delay potential revenue contributions.
Q & A Highlights
Q: With the strong performance in Q2, how do you feel about sustaining this growth through 2024 and into 2025? Is this a pull-forward of revenues or indicative of better market adoption and volumes?
A: We're not giving '25 guidance, but our goal is to be the highest growth MedTech company in terms of sales and EPS growth. Our portfolio shift into faster-growth markets, strong global growth, and durable businesses like FARAPULSE and WATCHMAN support this. We aim to distinguish ourselves with consistent high performance.
Q: Can you unpack the sustainability of growth in the EP and FARAPULSE segments? How durable is your EP share and growth?
A: FARAPULSE is transformative with significant safety and efficiency advantages. We're early in our US launch and have yet to launch in China and Japan. We expect FARAPULSE to be a major growth driver for years, potentially becoming one of our largest businesses.
Q: What excites you about the Silk Road Medical acquisition and its integration with Boston Scientific?
A: Silk Road Medical is a strong asset with robust clinical data and market performance. We believe we can grow it faster in the US, expand internationally, and improve its margin profile by integrating it into our operations. This acquisition strengthens our position with vascular surgeons and complements our broader PI portfolio.
Q: How do you plan to balance reinvesting in the business with delivering margin improvements?
A: We're reinvesting primarily in commercial-facing functions while leveraging back-office efficiencies. This balanced approach allows us to continue delivering top-line performance and margin improvements. We're investing across our broad portfolio, not just in FARAPULSE, to sustain long-term growth.
Q: Can you provide an update on the TAVR program and the expected timeline for data presentation and filing?
A: We completed enrollment of the 1,500 patient cohort and expect to present data in the first half of 2025, likely at the ACC meeting. This is the largest randomized trial in TAVR, and we aim to file shortly after presenting the data.
Q: How do you see the WATCHMAN business evolving, especially with the potential for concomitant reimbursement with FARAPULSE?
A: WATCHMAN continues to perform well with strong market share. The potential for concomitant reimbursement with FARAPULSE could create significant advantages, offering a unified ecosystem that enhances safety, efficiency, and patient outcomes.
Q: What are the key drivers for sustaining high performance in 2025 and beyond?
A: Key drivers include the continued success of FARAPULSE and WATCHMAN, the launch of AGENT DCB, and the Modular ATP system. Additionally, our Endo and Uro businesses are performing near double digits, and the Axonics acquisition will further strengthen our portfolio.
Q: Can you provide more details on the FARAPULSE launch and its impact on the market?
A: The utilization rates of FARAPULSE are very high once customers start using it. We're seeing strong and sustained adoption, and we expect this to continue as we expand into new markets and launch additional products in the FARAPULSE portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
