Boston Scientific's Q3 Profits Surge, Looks To Strengthen And Diversify
By Jof Enriquez,
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Boston Scientific saw third-quarter profits increase 13 percent to $368 million, and overall sales rise 11 percent to $2.1 billion, beating expectations. Strong revenue growth was generated across all business segments, led by its medical surgical portfolio. CEO Michael F. Mahoney told analysts that Boston Scientific will ride the momentum into next year as the company looks to further strengthen and diversify.
The medical surgical group grew 15 percent on robust sales of medical devices and supplies for endoscopy, urology, and neuromodulation, reports the Star Tribune. The cardiovascular business expanded 13 percent, while sales of cardiac rhythm management (CRM) devices, which include pacemakers and implantable cardiac defibrillators (ICD), grew four percent. Geographically, AMEA (Asia-Pacific, Middle East and Africa) led all regions, with 20 percent growth, while United States and Europe expanded 11 and 6 percent, respectively.
"Our differentiated products and services continue to make a meaningful impact for our customers and the patients they treat, as shown by very strong revenue growth in the third quarter and year to date," said Mahoney in a press release. "Our global team is delivering excellent performance across our various business units and geographies."
In light of the company's strong performance, he told analysts in a conference call that the strategy going forward is "to continue to strengthen and diversify the company in the faster growth markets."
A top priority is to continue filling in the gaps in the current portfolio, so future deals might be in the same vein as the company’s past tuck-in acquisitions of American Medical Systems, Bayer's Interventional Device Business, Atritech (developer of the WATCHMAN anti-stroke device), and the recent $210 million cash offer to buy gastrointestinal specialist EndoChoice, said Mahoney.
Boston Scientific recently began the early launch in Europe of their LOTUS Edge Valve TAVR technology, and will present four-year outcomes on REPRISE I, three-year outcomes for REPRISE II, and LOTUS Edge TAVR device feasibility studies at TCT16 (Transcatheter Cardiovascular Therapeutics) on Monday, Oct. 31, 2016.
"We'll detail this out at the Investor Day, but it's [an] exciting future as we move into a very large market in TAVR, expanded indications in the future with WATCHMAN, our drug-eluting technologies, a real commitment that we have to neuro-stimulation expanding to deep brain stimulation and potentially to other areas and really in the field of endoscopy where our team is looking at breakthrough capabilities to take more general surgery approaches to less invasive procedures," Mahoney said during the call, according to a Seeking Alpha transcript.
Boston Scientific this year received U.S. Food and Drug Administration (FDA) MR-conditional approval for its EMBLEM MRI S-ICD System and ACCOLADE MRI and ESSENTIO MRI pacemakers. The company is pursuing MRI compatibility for its ICDs and cardiac resynchronization therapy devices via the ENABLE trial. Mahoney said the company anticipates FDA approval for those devices sometime in the fourth quarter of 2017.
Rival St. Jude Medical recently warned that batteries in some of its ICDs could drain faster than expected. Mahoney said Boston Scientific does not have similar issues, adding that "even prior to some of the challenges that St. Jude has seen, we've been very clear to the marketplace that we have very unique battery technology and also excellent remote monitoring."