BSX - Earnings call transcript Q3 2017 | Boston Scientific Corporation

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Boston Scientific Q3 2017 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Instructions will be given at that time.

conference recorded. this reminder, a is being As I'd Susie Lisa. to turn over to the conference now like Please go ahead.

Susan Lisa

in are non-GAAP and Stacy. our morning thanks Brennan, We With included call issued for which you, Executive QX joining Mahoney, measures Thank Good Chief of the release reconciliations us. XXXX me morning, Vice President a release. on results, Financial and press Executive announcing Officer, Chief everyone, used and and Mike the Dan Chairman Officer. today's this earlier

We in that non-GAAP reconciliations and the have section release as of the under a Mike for for revenue questions. copy Results then, strategic posted of guidance; hour. morning's QX to reconciliations. we'll Relations well The non-GAAP today's will and provide Investor QX website Investors/Filings/Quarterly as XXXX measures the your duration Dan our used financials of of the heading call and call highlights will the review quarter, XXXX and take will then and approximately year XXXX; be full one this

Mike Q&A Ian Dr. by joined Chief our Ken today's will be and Officers, During and Medical Dr. Stein. Meredith, Dan session,

margins, by over words. foreign federal defined Before estimate excluding within like the call, growth note, from acquisitions of clinical of trials, among it those rates, changes full believe, securities is I'd opportunities, exchange that and any about described Factors and for XXXX relevant cost and and from call QX our that, basis launches, cash flow otherwise of our approvals may them. unless the speak currency include things, may Actual R&D cause the materially references use, statements discussed meaning include, product everyone Mike of new year rates and on this his the be differences XX-Qs growth is which tax expected expenses. guidance, with our At forward-looking XX-K Symetis in we date Mike as revenue the and comments. prior of sales, other Organic the expect, most differ market statements. those other sales and may spend growth anticipate, growth year-over-year the turn Dan's intention SEC. I'll statements and savings impact forward-looking Risk and to and obligation excluding specified. like remarks, begin, are such similar other identified operational revenue our share, laws, on organic They earnings to and recent words rates. an other including the Factors only all to contains impact section to results today's well remind or Also the performance, as update currency year in we this period. over as EndoChoice filed of disclaim In growth as exchange statements as defined in and and These of our foreign subsequent point, financial

Michael F. Mahoney

highlights growth solid XX.X% build basis XX.X% Also, upon to growth, of to spending in a reduction of XX% impact our the revenue point about our at global margin the XX in of growth adjusted revenue both quarter EPS high in the XXXX drive and and includes our basis I'll narrowing teams end revenue. to in XXXX, the $X.XX Symetis X% adjusted XX% our in negative quarter $X.XX expected led guidance despite adjusted EndoChoice adjusted We're and an EPS This Operational year-over-year. or $X.XX, to and exchange. X% grew Well the from long-term We're operating leveraged and execution by narrowing third by and year-over-year to to delivered impact to which to or We're headwind, full-year foreign exclude strong SG&A exchange, year-over-year of results to beyond. a This revenue XX.X%, provide which to comparison sustainable EPS organic which in quarter adjusted our margin an high range. revenue and point guidance out impact, operational the some revenue XXX on XXXX estimated our morning, negative organic XXXX full-year Susie. a everyone. of results, represents growth growth Scientific done, out third EPS Boston year. growth EPS range basis XXXX finish EPS XXX an XXXX. revised and X% plans if $X.XX now growth XX% deliver the reflects improvement $X.XX guidance end is per share, close We guidance thoughts success approximate earnings growth, category QX full-year global lead approximate also our from also point strong in the momentum of guidance foreign gross X% strategy. with to also $X.XX excited revenue our of basis XXX point growth. acquisitions. an operational X% again, includes growth you the XX% coming Good reflects

We faster our grow all in to and than continue of market businesses most regions.

in by X% X% delivered Europe, AMEA, in U.S. in in also organic geography, consistent revenue growth We every growth the X% and led

Endo performance to DS] quarter, businesses including led in with Emerging which start System, outperform deliver I'll continues growth Hemostasis Clip [SpyGlass Res platform, in center the We XXX Endo, XX% X% and DS in expect AXIOS X% Visualization mid acquisition, operational The surgery highlights. and In to delivered including single-digit the EndoChoice ambulatory growth, portfolio. Markets to fourth We growth the from together our do revenue XX% MedSurg grew deal organic in EndoChoice, revenue in above XX% plan. China. strong growth three and the also back including to XX% rates quarter. by EndoChoice continued the with Spy to MedSurg the return QX high organic

total quarter. of and EndoChoice contributing basis integration revenue the growth is points plan, the completed of now have in ahead We to XX

be GI prevention. infection our to results the from market, differentiated the in pleased ambulatory and continue center with surgery pathology expanding presence offerings led by We in

continued this light of and Minnetonka, revenue Urology of health grew Stimulation driven is Montage XX% cord in continue In platforms, that can businesses men's growth, double-digit forward business, XX% of like The developmental quarter a our address look Spectra, stone Neuromodulation, Warning to sales Ureteroscope men's uptake across the Single-Use the treat notable physicians in led and The to in XX% as FDA Pelvic technology our Uro/PH from the System well by by that continued growth Digital streak health of Minnesota growth the Brain men's Deep Vercise QX In comparison in organic facility. in LithoVue products strength market in pelvic accelerate, Our Emerging by SCS and needs our overall future during we Europe. now led revenue to Letter flexible QX, health third suffering floor platform, was to for of launch our new and market XXXX. strength spinal sales enable lifted the reinforces Health patients market, unique products our franchises. need particularly of strong as MRI from MRI the pain. stimulation conditions.

Lead brain expected XXXX, XXXX. Vercise a U.S. or into and the which We early launch in are into for XXXX our labeling by deep preparations of MRI Directional followed expected market, by we stimulation deep conditional year-end expect

turn a group XX% XXXX. America. to Interventions in Now, on growth difficult Latin was very grew growth and I'll This QX X% Cardiovascular. X% Asia strong Peripheral comparison up against in

our intravascular including drug-eluting the Ranger see both portfolio, DCB, rates launch platforms, to across Europe, growth now ultrasound, in In we presented of both second Balloon Ranger conference, DES technologies from and and September, the from OptiCross solid for European quarter Peripheral CIRSE continue with at Atherectomy mid-XX% in We applications. and data Eluvia freedom Stent Eluvia of TLR. compelling from Jetstream drug-eluting the ranges

year for in While XXXX be the continues momentum strong PI, very product globalization for pipeline XXXX. and a will and launches the XXXX is new quieter

Cardiology QX of XX% X%, business X% revenue in comp grew revenue organic operational Our in XXXX. and light a growth Interventional

our platform development Atrial Medicare Europe. another quarter of reimbursement X, led continues momentum Closure important to WATCHMAN Left most U.S. and map and our effective which contribution The XXX, an build for WATCHMAN sales that, PCI increased Symetis average above-plan continue. performance market, market largest DRG device, October and in be and platform Appendage our announce had rates global to by Our to, products excellent efforts we're from XX.X%. WATCHMAN as the our by of to pleased portfolio continues ACURATE implants of to was of complex The strong XX%

one compared a Asia-Pac We the in was showed building track continuing on progress good expected on which implanting new in principle month's with development at patient an long-term drive associated risk year, to SALUTE we Also, and continue At outcomes solid is U.S. XX% to launch to to HRS, while hit last over September. avoiding low remain presented expect Registry, and by also ischemic making also investigators physician investigators We We're Trial, franchise from accounts multiple accounts. now efforts and increase while for stroke WATCHMAN opened risk we to with also WATCHMAN, the Asia-Pac bleeding awareness. increased Approval previously to off showcased the implant see the the end reorder XXXX in record WATCHMAN XXX HRS, a anticoagulation. where Asia-Pac to monthly rates outside for implants rate start XX% success Japan XXXX. WATCHMAN at rate WATCHMAN a China market

Products clinically led make Balloon as double-digits, strong growth driver. a and procedures commercially, view for significant strong Atherectomy We and WATCHMAN both complex PCI and long-term continue Cutting it grew progress, sales. by to with

strong with continue PCI comp reserve low continues invest very SYNERGY with platform. Guidance flow to reflecting portfolio DES a the in and integrative in to in quarter, market the in grew progress. QX declined our XX% Global in business enhancements multiple leading sales momentum launch, sales new fractional Our XXXX. DES, challenging will we platform single-digits growth Within our build single-digits IVUS

ACURATE with across comparing we share. ACURATE, more demonstrated to SAPIEN and and the in Monday, continues Turning TCT of our which program. TAVR, [JACC: on expectations, Cardiovascular Europe, growth, Valve we strong discuss neo ACURATE activities performance along emerge just greater remain to target. clinical week our seen detail continues publication take this commercial as market clinical clinical integration SX, webcast ahead to with our year-over-year ACURATE Investor data Positive as in into with see to Interventions continue insights also JACC: Interventions], to a strong in very during will (sic)

progress bringing We also into make to market. the LOTUS continue back

for LOTUS timeline Edge mid-XXXX unchanged. Our the remains U.S. of

of with are in the is of the launch provide in and LOTUS August, PMA body We of we information a of review of three completion FDA we Depending our which modules for potentially Europe already first our clinical January. of XXXX. submission to with to This in now we're our PMA notified year-end in was a to update working original European to in quarter. in Change submitted by Notice continue also the the standard completion the a filed XXXX, CE a In technical to an which by or submission path includes expect two quarter from delay Mark submission third design pertinent submission Europe which nearing required module would on module expectation final needed and year-end review target Edge regulators, time dossier. closely submission, represent for

Structural to physician LOTUS believe and the TAVR with and Heart long-term uniquely to utmost we and positioned help of differentiated address needs patients portfolio. success minimal minor have be of ensure this the will will a delay will impact which franchise, LOTUS our expect and We Component timelines

providing exceed details around with Importantly, our Structural we expect XXXX WATCHMAN $XXX you revenue and clinical for guidance now at on from our look million we Denver. our multiple webcast TCT additional and Monday TAVR to forward Heart to programs

third Our than quarter. X% grew faster at Rhythm market the Management in business

has also with year-over-year. in Our up margins paid XXX quarter another is operating which basis profitability resulting focus of on off, Rhythm strong points Management XX.X%,

MRI the the HeartLogic launch proactively the launch advance EMBLEM CRT-D with with and ICD less to has in Resonate by for Resonate our the U.S. failure predictability Heart heart level compatibility the Europe Furthermore, device four excited worsening sensitivity product approved highest with capabilities approval strong of market, predict INGEVITY trends, Pacing recently anniversaried space very patient more Failure the market. entirely and, weeks of CRM the and We in we also feedback XX% believe of lead. early MultiSite new than As enabled our backward labeling, HeartLogic fully alerts in our than into Diagnostic. MultiSENSE high introduction Resonate double-digit ongoing unexplained growth platform the and modestly low-single per the the can with pulse generator, in longevity S-ICD, Resonate voltage equipped platform the on brings the they're U.S. trial digits grew declined of sales new We're MRI compelling the two year. launch patient in MRI compatible and Brady Brady best-in-industry offer technology. benefits with U.S. ACCOLADE of as our patient now sales

Apama $X isolation is uptake to followed us early in ablation acquisition provide designed The This excited commercialization in the of RF complete primary isolation. globally. use, HDx to we energy the XX% and balloon single HDx expect EP, XXXX. therapeutic improved integrated the design market of led RF the OPEN-IRRIGATED RHYTHMIA RHYTHMIA Nav by multi-electrode will by more by European which which our shorter and of into launch the and vein Apama rhythm single-shot to Mapping launched Turning the Apama benefits via billion shortly, pulmonary potential platform grew greater to vein platform. We begin combines a improve the first sales balloon-based INTELLANAV and approaches. our procedure quarter be by and U.S., visualization ablation of and EU we pulmonary our catheters in recently XXXX. complements portfolio MIFI catheter announced expand the levels our We're nicely is of times DirectSense shot via ease U.S. into technology Medical, allows market, of half also differentiated

XXXX year-end U.S. trial begin clinical Apama Our for early goal the by CE Mark balloon enrollment in and is XXXX. single-shot to gain

as close to working are effective a Scientific's in focus at detail this efforts we Also, So, we outlined our to strategy, globalization continue Investor are and out, and track I will for execution to Dan a deliver record strong portfolio they Boston our to our differentiated financials. believe back that and our in detailed and well and XXXX, Day want June, provide now our positioned XXXX. our their spirit to commitment while performance XXXX employees advancing importantly, for science performance thank accelerating continue into in winning of review life. results.

Daniel J. Brennan

Mike. Thanks,

consolidated growth changes high $X.XXX impact excludes operational which the currency X%. quarter billion of range on is reported guidance foreign revenue X% Third of the end of and in basis, represents of a and X% reported to our at

which X.X% the the XX million headwind XXX Our contribution points higher is reported reflects end million revenue or foreign excluding the approximately Further, a of less $XX from $X basis guidance. than headwind exchange, of $XX organic from basis point at guidance revenue time million growth. the with expected acquisitions, was at

which overall, immaterial Although basis the point procedures. basis XX the to growth revenue the quarter, range impact hurricanes to reflects from a modest XX quarter point impacted in the our in

XX a representing earnings double-digit patients year year-over-year P&L the QX adjusted serve our $X.XX, quarter Our thoughts compared $X.XX, growth. from for guidance share guidance there Revenue strong XXXX, which by winning decrease high adjusted is this are the which to and XX.X% reiterate We range significantly, basis Adjusted sales their our our to benefit the last ranges. our points like delivered end year, impact cost as is negatively corresponding line line basis margin of at per third were of quarter the in benefited impacts in and since point are thanks manufacturing profit, gross XX margin This of strengthening, gross in metrics $X.XX driven hedged hurricane we more a euro to slightly prior growth our impacted health year-over-year for Rico gross over those margin unfavorable the offset for reductions that on and and per as basis largely Puerto with at little but points. by from XX foreign earnings spirit, exchange, primarily mentioned, in than I'd gross rate. basis franchises quarter. well to Rico running the currently customers ability plant and was by with XX% men's for QX employees growth onetime item facility XX% Puerto XXX our capacity. includes and, challenges to great gross phenomena due were I share to Maria. as variances needs of guidance XX.X% Hurricane continued point was from our mix favorable strength efforts and Adjusted also in particularly WATCHMAN Due many margin the our to throughout team, is weather-related the negative just their Mike's by of the the product the represents

While we our and, our suppliers. assurances their business a dependency work impacts well-being, one power, remains of are eliminate materials number continuing the key our employees resiliency the to for and from it we as to generators of situation priorities do a material expect validating and raw our priority current have upon result challenging storm, not after component any and ongoing our

SG&A our to We the now SG&A, approximately expect were points end XXXX be at basis but SG&A range of million XX variability and shared year in sales, our to see down of margin Adjusted sourcing gave $XXX optimization from point within full of the expenses services, XXX XXX full a basis remain some end-to-end year assumes for QX, XX% points XX%. in business we indirect basis and streamlining given negative In year, FX XXXX we adjusted quarter, and impact year-over-year a like seasonality XX.X% of increase XX% or expansion sales and gross of of outlook July. the may leverage. which you low any automation, through global process global committed guidance initiatives to

full development the expenses prior-year, which year of to of to XX% versus XX due of range of represent X.X% for We year-over-year, million mix of to sales full the to last of to XX%. basis royalty certain in adjusted XX XX% the our year and consistent, sales, quarter in year below year a our their expect than of a XXXX. XXXX adjusted lower basis to which continue or which rate third is $XXX decrease flat expect and we relatively research QX, we royalty R&D were in would points sales, is of roughly product year. XX% full midpoint a at be just range remain Royalty related XX.X% expect full continue to sales a rate and expense be in was SG&A X% Adjusted to sales But rates. the points

segment QX increased result, operating points team on year, improvements Rhythm was a of margin MedSurg The to driven As make within adjusted QX, in they margin prior was points and results. and XXXX XXX margin Management XX% largely for progress and it basis Management as of gross improvement range XX.X% operating year XX.X% XX by our Rhythm our the expense over on The of operational year-over-year an XX%. guidance strong basis improvement focus of prior continue control. approximately delivered great an to over

variation represents related total Structural any given operating in of be to commercial primarily the to continue margin approximately operating margin capabilities segment, significant franchise. spend, Management margin. see Cardiovascular segment approximately upcoming XX.X% a for continues quarter of be while year-over-year XX% and year development sales, realized year invest Heart to operating operating margin approximately In in but building expect to The We our margin, to basis company points to to of you basis of Rhythm improvements segment also of MedSurg some XXX commercial over may in operating points, continuing In delivering operating the XX%. key accretive to prior the XXXX margin Cardiovascular launches. decrease due full XXX XX.X%

other to year our $XX and in includes investments. was for million, Adjusted on the of rate compared and I'll sequentially flat from interest was average this X.X% of in in in other which to million dilution portfolio equity expense. consistent QX expense $X Now, last move is QX the QX year, expense X.X% venture our million expense of roughly XXXX. was to $XX method quarter, interest and quarter Interest

from dilution our well FX the and as As reminder, comprised costs venture a the with expense as expense is investment our associated hedging of our portfolio below line interest program.

full For and full line the approximately we year XXXX, both XXXX to expect $XXX be year in below expenses, million. aggregate,

certain third reported items. discretes We which primarily range X.X% of XX.X% the a to recognized due was for be range adjusted now basis rate XX.X%, XX year. an tax the a of below on decreases interim adjusted on quarter points range the to guidance XX%, full the XX% XX% timing basis, rate basis Our a our tax to as and expect year by of in during of to result

of exchange, exchange. tax, guidance XXXX excluding foreign On per XXXX totaling includes growth, net $X.XX represents of or $X.XX year-over-year expense we a QX reported $X.XX our QX share and $X.XX, earnings of share exceeding per as GAAP basis, growth impact $X.XX. million foreign approximately XX% Finally, expected, adjusted the and unfavorable charges which to of includes was range earnings amortization $XXX after XX%

to During of our the sheet XX,XXX remaining to the are the remain our claims continued on certain claims, We represent of master target principle discussions our on committed mesh majority of our in of to claims counsel approximately with approximately continue settlement agreements the known entered as a today, mesh resolution or make we've of plaintiff's and into to over entering stages claims. related risk reducing in settlement processing XX,XXX XXXX. balance and XX% in to final litigation which quarter, resolve we the and, progress

XXXX. to Our used to QX cash free reserve, quarter, we million, was for as cash of year. XX, total And quarter compared settlements. the legal $XXX September in primarily billion which fund agreed Adjusted $X.XX last included, the upon of is in previously legal was flow mesh $XXX million

$XXX of September million. As cash of on we XXXX, XX, hand had

year be and cash will billion, full representing to to expect year, the XXXX in expect cash X% in settlements. legal use mesh of generated fund XXXX adjusted and free into $X.XX to primary be the growth flow continue We the

be million issues, of the $XX We documentation payments and continue expect first we quarter made in continue of the calculations to half finalize make as through but the necessary expenditures for $XXX to now million. progress to third stipulation work settled in IRS agreement. XXXX approximately settlement Capital the for to the finalizing the of the totaled

diluted we capital Given flow $XXX billion we our now with the million, We approximately million guidance. QX average we shares for $XXX guidance expenditures million fully QX I'll X.XXX increased spend year count fully absorb expect weighted weighted billion outstanding and to for through previous XXXX. full diluted cash the walk recent and investments, for a X.XXX within but QX ended the full year for be believe guidance approximately of strategic XXXX. expect year now X.XXX XXXX share versus our of average and the can full

of full the guidance of billion this $X.XXX we to to expect is an $X.XX approximate XXXX full acquisitions, to $X.XX. will for full which from earnings at year-over-year a $X $XX and expect be growth of $X.XX be operationally. now midpoint, now to to now impact on result, billion a earnings foreign to expect for $X.XX, achieve the On XXX growth, of adjusted X% which Symetis to be billion, share exchange year, a in in X% growth approximately XX% range range as to to revenue GAAP now of tightening reported year X% the basis, XXXX For or contribution growth expect Included and of to We're million range X% earnings we consolidated organic be represents assume in be point year in we a representing approximately implies the the tailwind basis a approximately basis. $X.XX. revenue year per a revenue the EndoChoice the to $X.XX adjusted negative and, per $X.XXX XX% a exchange foreign share We full year.

QX rage consolidated to XXXX, of This X% X% of range a to to a Now, be revenue X% is impact in our higher it's comp. total year-over-year $X.XXX contribution to foreign acceleration a on the expect X% billion. that QX operationally and organically, billion approximate represents revenue XXX exchange XXX tailwind. growth expect slight sequentially in point an turning expect the acquisitions $X.XXX a million we and from than QX and be company to given comparable In $XX we QX, basis to points basis

adjusted to of is FX $X.XX For range and to the as for in representing check Investor Relations expected impact. earnings adjusted financial fourth XX% including earnings $X.XX of $X.XX per quarter guidance. a expected is operational quarter, to negative share. fourth be the line to our be includes growth outlines $X.XX share, QX range GAAP well per website share of highlights, results earnings XXXX $X.XX item year and which X% P&L QX $X.XX a per per and share as XXXX to for QX in guidance, Please full to

turn So, Susie, it with to that, moderate I'll back will who the Q&A.

Susan Lisa

questions Stacy, go ahead. Stacy, Dan. yourself or Thanks, minutes possible, many take so. let's for related to XX as question please the to up us next please follow-up. open as questions for order it In one enable limit one to and

Operator

Please [Technical JPMorgan. And Difficulty] to Weinstein ahead. go (XX:XX-XX:XX) from go Mike we'll

Operator

go ahead. go Stanley. Lewis Morgan We'll me. to Pardon David Please with

David Ryan Lewis

Can you me? hear

Susan Lisa

(XX:XX) Yes.

David Ryan Lewis

winner. the I am lucky

Okay.

just only Mike. one kick who I'll couple because off I'm So, questions. But Maybe can let a me just one and for keep two it one asking, Dan the for questions, here with talk.

couple So, Dan, things. a

momentum commentary if up XX could you And non-op. just us at also wonder of in better. gets quarter. what bps shared X% the highlight million margin, for bring top, Day Analyst improving with $XXX to fourth I did XXXX: You some you X% specific

you XXXX Day, any assumptions if for at a Analyst Just provided want to quick to changes follow-up then know Mike. there's and

Daniel J. Brennan

expect do yet one. guidance We would in for have Sure. XXXX. I'll the start with XXXX; to to issued that. that obviously early update No not second

QX growth numbers Day of X.X%. organic as X%, midpoint guided is those given Investor revenue X% to we goals So to are that to had at the so still we've good. QX, Relative

you expect biggest in QX XX% key RESONATE say, QX would be in I that CRM comp, to is, I We think portfolio bit the growth range is Broadly, QX. really, in acceleration there fourth of yes, QX So was we the comp momentum to our posted mentioned. the at The slight note and at X.X% it's over launch But MRI QX. don't that a X.X% of X% we gets for little from the versus defibrillator our take the if the to with quarter, for especially acceleration is U.S. driver midpoint point and so as the portion the in the X% in the safe QX, down CRM. a

that's from driver QX. of QX the So, I'd say the biggest momentum probably to

David Ryan Lewis

Okay. helpful. clarify then, some Mike, on want just things Very to LOTUS. And

delay quarter, platform slight into talked about you enhancements. So, the the first

expected U.S. So, simply it documentation approval a – enhancements, timing, is platform estimate? a is decent is mid-XXXX PMA how required additional it than of much. standard this is so Thanks new And longer much just Europe? process or still for

Michael F. Mahoney

Yes, second we changed I'll U.S. be with one. for Yes, approval start haven't timelines to mid-XXXX. our the

So, that. on No. into Structural a the launching XXXX. actual and small second for in our and see but to it minimal timeline really very In a for slip impact U.S. January, in we track comfortable we're impact Heart approval our nice that starting the mid-XXXX submission half Europe, down comes to with franchise. to potential There's stay business overall may of

Europe needed regulators, this. is a of And we manufacturing a we depending process, control what to in and first platform, quarter the given long-term view Edge to we're ensure continuing importance so European expect of as LOTUS possible to launch quality robust the And review want time take by and the do XXXX. on the just in

XXXX of first it So, control, manufacturing we quarter and ensuring sound and quality estimate bulk a the launch. really is

David Ryan Lewis

move? this device any that And there necessitated to changes Mike, the inter-quarter were

Michael F. Mahoney

discussed. haven't our No, chain more of fix made and pin supply and any changes operations the It's scalability technical we capabilities. we've that pull quality beyond

David Ryan Lewis

much. very you Thank Great.

Operator

Thank the JPMorgan. you, go Weinstein Mike of we'll and with ahead. Please line go to

Michael Weinstein

me okay? Perfect, can hear you

Susan Lisa

can. We

Michael Weinstein

scalability and flesh operations in out Mike, just referring to of follow what the are can, LOTUS? you up on that to you that if with

Michael F. Mahoney

Simply, the put in look we design QC as the talked line testing about of for of as ensuring the different that's at in we as the the PMA builds as testing we've number the as well that along submission. of needed for the end we devices – increments, place it automated, have well sufficient lines

to So, it's design the the builds and quality as line. well of control enhancements scalability as

launch. European terms XX-day a in and in so, our with said, our see see as don't we And U.S. potentially a that, we delay delay approval of

Michael Weinstein

Okay.

the know want the to And happening. people characterize to delay just of you so, risk just what's Do here that? want another

Michael F. Mahoney

with it. comfortable feel We

So, U.S., is We've minor, is exceeded guidance, we delay. year. the is Structural we Europe, we for XX-day delay potentially projected estimate, market. the a The a Heart in impact, think haven't which the only is which biggest quite our to which

And debated we we whether so, or forever on January just landed say should we the first first quarter. quarter;

Europe launch. we So, accurate as an with meantime, expectations in we date ACURATE. the our well exceeded like delay we is And WATCHMAN feel haven't XX-day delayed U.S. in as and a

Michael Weinstein

Okay.

to on – – the David dollar one June meeting. the me analyst that since heard XXXX. Let answer moved Dan, your just has I question

called of XXXX. You you for that haven't bottom headwind gotten that all benefit on XXXX? the you at $X.XX any line out to help that Does relative in

Daniel J. Brennan

Yes. Mike, I point. think that's a good

XXXX, As us. on largely gross XXXX we're from and the into a the a we it hedged head And in rates margin we in perspective, obviously, haven't seen other we've have moved way rate actually as year, that go actually, benefit. seen

our of Investor stay hope where a you we assume negative are to to think see gave that they it's is at Day. $X.XX might little against fair improvement were that that FX that if we I rates

Michael Weinstein

Okay. Thanks. I'll some let in. others jump

Michael F. Mahoney

Mike. Thanks,

Operator

Hopkins Thank Please America. Bob you. go we'll And ahead. to Bank with go of

Robert Hopkins

taking Great. question. the for Thanks

beat the sorry a pipeline – but horse So LOTUS, for just you. to it's on here such obviously key dead to

previous regulators to that is to by something this? exactly exactly So, to is what kind guidance, do? something you sort like it do of that I'm that's causing changed decided been just mandated your you curious have have Is of what guys see it from or

Ian Meredith, M.D., Ph.D.

Perhaps, Bob. Meredith is I actually, can Ian This take that here.

know, regulatory Europe approval and of as the indeed PMA. processes, are we starting out the both for gate with well the So, you

We have the in U.S. the submission PMA

clinical our to notified device number that of to the new come advance Europe, notification in reflects Edge regulation of January, the said, and body ensure LOTUS the normal already the we're medical one is trying of will the or modules the requirements possibly builds meet be three as into we're the just module year-end that might information. to stumbling submitted, including And regulator's working closely module, two XXXX out design and with data, by clinical the will framework XXXX. In have submitted that change technical Mike to That's be place We of block. provide very in there. technical

Mike before the So, timeline outlined the our the hands think in minor really I think I processes and is characterize delay.

Robert Hopkins

for pricing a Okay. Mike, your November in China, last China of issues national love month coverage proposed Great. potential on changes in update, light bigger-picture kind in get changes? of outlook kind the of some two. for changes one swirling ICDs? on to the a have And you I'd decision then, perspective. couple your And China, have the that'll of be for Thank that of business late question around national those any that that. you. from been the given you on or been or view in for growth your Thank outlook What's on made determination in also, a on going

Michael F. Mahoney

Yes.

we our just strong China, over growth business the being Markets really XX% And China in is drug-eluting So, stents. and growth up in in see in XX% diversified to very We're beyond again. continue really, China. Emerging

the never stents have could So, our on guidance in to Investor an at that's playing we had provinces our distribution by and in you that volume price, of baked that some reach, of increase our offset we which Day. pricing, and tendering so past. gave in impact drug-eluting see lots forth commercial we we've continue in tenders we're and But potentially as to already the now also,

volume DES register DES China. potential just beyond continue think products us at And nice new we more and to we then, continue in importantly, will price complex to China. So, ASPs. in offset But for we doing declines our coronary. distribution quite in diversify WATCHMAN's well any in reach

there underweight ago. a very was few business MedSurg whole years Our

are PI as gaining traction, as our well business. Now, Endo/Uro/Neuromod

growth of we projections of change years. next see our Markets So, really XX% don't our the a commitment couple of over Emerging out coming kind of the in

Robert Hopkins

Great. helpful. you. That's Thank very

Operator

to... go we'll And

Susan Lisa

One Stacy. Sorry, second.

On the NCD, Ken?

Kenneth Stein, M.D.

Yes, Bob. It's Ken.

Just forward the quickly decision. on to the national we're NCD, coverage looking revised

the kept you with old professional this sort quite and guidelines of at appropriate society up use really NCD point is hasn't just and know, criteria. existing As

investigation currently going up are professional where for CMS caught devices to some that few appropriate also where DOJ got patient indicated back. but use results of And under reserve coverage covered guidelines. in and We to enable the populations, urged edge have the just years around we're physicians cases to a the the that optimistic the reimbursement current clarify

Operator

Please go ahead. go we'll And Rick to Stifel, Wise Nicolaus. with

Frederick Wise

Hi. everybody. Good morning,

Michael F. Mahoney

Rick.

Frederick Wise

you (XX:XX), for in a out market terms little of Mike, maybe maybe and detail plan ACURATE hospitals. performance European next Thank some product in way commercial more start neo. with Maybe us your you gains in called obviously, the off give you sense countries above you're share update you. in or Just what's progress if of you now, whatever on of would, milestones? some any number clinical us Can like: there. updates give us,

Michael F. Mahoney

quite our our outperformed has on strategy, expectations, bullish impact, globally, Symetis Candidly, its much we're of acquired than it. as first we versus potential and TEVR more part Yes. frankly,

of platform. we're through and So of that And force we're direct today primarily and We're enhancing getting were arrangements working the We're some expanding. part Germany set. Symetis of previously year in sales our this that Nordic countries, the out and some distribution we're next. early with

LOTUS second back and that over while U.S. Heart by Structural Heart – more deploy specific detail to commercial to we're half bulk Europe and the Europe provide earnings enhancing guidance first of to the for call. essentially, and We'll quarter XXXX, and bringing on are approval out able Structural But potentially organization at year. second the our to So, seek XXXX. Symetis our been we'll we've clinical plans what quarter next valve in next

valve an And Magazine, just the bit. maybe well. to JACC, there Ian that in very I that, is can JACC doing yesterday article highlight interesting a was to think So, written speak

Ian Meredith, M.D., Ph.D.

it's head-to-head about well versus we extremely the in the the target head-to-head well, Thanks, that we enrollment trial next R is SCOPE And The countries enrollment going in. its indeed, to Evolut platform which expect continue SX a Europe. randomized, as the doing a which middle Rick, II ACURATE the complete middle Yes. on is comparing ACURATE, is is in also the I that trial, it's And be of year. platform you of Mike. of trial, the against year. very progress complete the by to in or excited and know, trial SCOPE to PRO randomized, multi-center,

a Interventions nice comparing for just there that, SX, versus a pacemakers was (sic) and head-to-head Mike data, with as publication excellent overall lower – [JACC: JACC: showing significantly Three in – of safety mentioned German efficacy equivalent well ACURATE ACURATE centers though rate and Interventions], Cardiovascular As yesterday. non-randomized results.

which full and, it but ACURATE randomized the in the intermediate is planned forthcoming planned of second results Of importantly, for to of well classes, the half is – U.S. all course, year. trial not this very I high the for more extreme bodes data, the SCOPE risk, next trial and IDE

or IDE published the into certainly outcomes for potentially data yesterday these So, U.S. I both – trial. great SCOPE insight and likely give us likely the

Frederick Wise

that's Now, real helpful.

sort one there it out getting of back remind Maybe this approval are X% track? Just missed The but that we where competitive here. terms follow-up on pacers. Thank in and of decline quarter. just product Is timing, you. on issues us stands the it, I dynamics,

Michael F. Mahoney

Yes.

which more pacer the Pacer with and of was we offset anniversary our issue it that to it so year, we anniversaried So, the we growth a comps But quite expect for comp last improve. it's – was saw comp really, tough fueled the up quarter Resonate, what quarter, ICD, business quarter, frankly, for we and really some nicely in And the had quarter with of issue. by We've XXXX. S-ICD. that is a in – will didn't any we throughout heels launch being by growth – really Europe on for European's beyond in Resonate reflect sorry, really strong earnest grew the which the X% benefit CRM

Frederick Wise

you. Thank

Operator

to with Capital RBC ahead. go we'll Please Markets. Glenn go And Novarro

Glenn John Novarro

me, guys. hear morning, Can you okay? Good Hi.

Michael F. Mahoney

Hi, Glenn.

Daniel J. Brennan

morning, Good Glenn.

Glenn John Novarro

ICD to franchise. Great. the Thanks. I want focus on

business than than business started approval year prior the – it got MRI go prior double-digits. safe the MRI back expected; then to of pacing I So, a sooner pacing your sooner at impact ago, growing we approved over you declining, your MRI business thought. was if And least, congratulations, – on and to

and that So, you you about at ICD for on for wonder talked can should follow-up, headwind can think going in us how forward MRI us grow the business year. still you marketplace. help June then, about the if impact a track, franchise XXXX? your you as And next Is that replacement have remind the now Thanks. U.S. a in back ICD for your safe meeting analyst

Michael F. Mahoney

Sure.

So, as very in and enter particularly Defib, in out bullish our close position, XXXX. on XXXX we're we

MRI not bit a offers is Ken it that of studies platform physicians only heart believe with more, that highly tool that you be a articulated, benefit. that combine diagnostic capability, that clinical a probably detail longevity failure but differentiated As we we a doing for number Resonate Then, out HeartLogic, can on. we'll

margin Pacer. to Defib, share S-ICD CRM is profit which So, as really within we're think highest QX throughout and with in clearly is in versus well Resonate – well take positioned business XXXX I as the

of more which with basis expect and that benefits quarter replacements, growth tailwind business. CRM. faster we in in So, XXXX than we the MRI in to nonetheless, CRT-Ds. expect about But faster combined Pacer and MRI, we level that same some ICD to that'll rates current market Defib and we had this in fourth of talked XXXX because than don't our points saw in this when also being to we the do strategy be had growth expect have a saw grow And of we compatibility – in XXX we with about a

XX% we're we and high is very Defib Resonate, with up well S-ICD and margin positioned the in as think also our in tailwind, the EP business which the strength the as So, quarter. well in business,

Glenn John Novarro

taking Great. for my question. Thanks

Michael F. Mahoney

Yes.

Operator

Please And Biegelsen go ahead. Fargo. to Wells with Larry we'll go

Lawrence Biegelsen

for good Hey, the morning, question. Thanks taking guys.

the for – the to start regions in U.S. basis. struck the what of accelerated was two wanted I me. an with me quarter So, on all organic except

minor I have think, was I question issues one do I X% the Medtronic's And in the of know from fourth pretty quarter? the deceleration I benefit in any had business impact, you expect why X.X%. U.S.? And guess other in is I the a the out. U.S., the said impact, weather from some was So, but And a amount than companies lower think, to went you follow-up. called And my

Michael F. Mahoney

as and of Yes. think just We strength Houston nice job. weather had it impact procedures, number and which platforms, in with with new was I DCB, some quarter, the the also, of and of launching our our of impact DES, the more Eluvia, to overall, with significant teams the those of and in And company, in Europe to clearly, X% growth didn't so We the as on quickly But benefit had Resonate points coming was the in but across kind EP; shows Europe, really the well all a as well impact it was are basis Europe's Symetis, of growth diversified and the as Europe. points basis a platforms Florida. some platform thought want really overplay it particularly in the a the It that a with growth, XX XX balance – Asia-Pac, growth did operational and the to U.S. again, card.

us lot in platforms very the performing gives it of a on the XXXX as of So and optimism into these heels are for XXXX, U.S. Europe. well XXXX that growth head we

companies. all to companies there really of think think be backup strongly challenges? that plans job other contingency limiting and and in good I you're outages team's Rico, impacts minimize done from I seeing our maybe had a will resiliency more Medtronic's from challenges with and have upside having So, terrific those supply order Puerto plans

Lawrence Biegelsen

I wanted expect you asked you Symetis When be your do one wondering, a Symetis Ian, picking this you couple expect them more, about you at just have XX/XX to people up taking might to XX/XX it to still in ask ago I'm taken share, you the or question. Thanks then, some versus it surprise. And view? is for said and Thanks. by this be were questions. maybe the point, think I quarters and LOTUS roughly

Ian Meredith, M.D., Ph.D.

it's me on very Thanks, you It's Europe. that to share. Obviously, well for very, can popular ACURATE is in see very a fairly Larry. comment market hard Probably, platform. doing

I play over be. market will the it'll what think out time share

Lawrence Biegelsen

enough. Fair

Michael F. Mahoney

best that trial that its think has. in Symetis have speaks data We a articulated of out. the Edwards why Yes. very about And the We'll for valves Ian we've for performance the and just guess in to is talked I compelling, it Medtronic we acquired and first that terms Symetis against that a it place. while. will report

have unique we LOTUS. a confidence of abilities the the and in lot capabilities tremendous Symetis have we of in clinical So, of confidence

WATCHMAN. inning, $X in as today, in we us number top probably combined our is gives us a market, we're most think even for it the opportunity growth the first the so, which of combined I Structural billion unique And think small of LOTUS terms And in a – in we're we're still, the well – Heart with very in not Symetis. as profile

Lawrence Biegelsen

questions. for the Thanks taking All right.

Operator

BMO Markets. to go Please we'll Joanne Wuensch go And with Capital ahead.

Joanne Karen Wuensch

me okay? you Can hear

Michael F. Mahoney

morning. Good Yes.

Joanne Karen Wuensch

have Wonderful. two Good I you. for morning. questions

better to basis headwind. Day walk basis year has year, do through, this the The a gross next absorbing next with improvement but be imply would wouldn't The Analyst me year? you're this margins. with FX points why shifting, FX point at XXX commentary And please, first from the one XX

Daniel J. Brennan

Well, obviously, relative Joanne, to guidance we given yet, XXXX. haven't

it's correct, have total with and will headwind for to think what's the year, point operational XXX full this offset You're I number. nice basis is year year we basically that relative the that this improvements

is to the XXXX. specific and So for numbers focus But the margin alive of the down for the drive and to we that'll give the relative total such for value improvements guidance and operational to of year, team operating well. it's one next earnings programs we and share that improvement add what per

line. bit we'll give specific less relative in are, a line when with they we rates FX the the mentioned Weinstein's we'll I earlier, – that to Mike But we next guidance see guidance the need at give is that to the headwind So, the FX year. a where hope relative next little to sort what XXXX. of Again, might be out as item year will question bottom hope to

Joanne Karen Wuensch

to – the – follow-up question you. States. has with LOTUS Thank LOTUS in question do My sorry, another United

module a year of the you mid-year Thank LOTUS in end to the approval United timely this need take the goes to beginning then in the get steps for that of are you. third States? at next, what Assuming the or

Ian Meredith, M.D., Ph.D.

are questions the it will the process just just a completed, to of FDA. be a Well, PMA dialogue case is it's that required And with once submission. submission complete answering any simply that of

communication with We have FDA. frequent productive very the and

questions. a obviously a their timeline may simply be and to process FDA approval process, in required to the of time answer expectations. that There's meeting it's we So,

Joanne Karen Wuensch

further, step productivity, But a advance, taking training? I about it set sales force assume. All that be ramp, what manufacturing, will in

Michael F. Mahoney

They've had obviously, with this deployed point. team have elsewhere delays, been commercial in since we sell ready for within the the we've LOTUS. go our capability Cardiovascular to Yes. LOTUS they can't, U.S. at Unfortunately, –

So, we that upon build to continue have resources already we'll and strengthen established team. and

commercial we So, manufacturing And the concern U.S. won't the it a us. first greater time LOTUS at the in the in by for third scale ramping be half. have significantly we'll launch quarter, been up in

for concern So be the U.S. not and we in us should commercial when capabilities manufacturing launch a

Joanne Karen Wuensch

Terrific. good day. very Have much. Thank you a

Michael F. Mahoney

Thanks.

Operator

Barclays. We'll go Matt with go Please ahead. Taylor to

Matthew Taylor

overhang? from us under forward taking settlement Can sheet for this out now about Thanks you're a of an wanted given talk the you use Hi. question. balance on thinking going little update about ask going using I one and how be to cash through flow cash, of the us the you're today. gave as you kind your to bit

Daniel J. Brennan

Matt. Yes,

I the cash. public to about think don't cash favored for think that of two we've payment our I the uses returning been most that It's pretty really shareholders settlement that. in and are the and timing IRS really the changes past, of M&A

same last I well litigation think over or liabilities and of years, time such. legacy four at the that balanced five we've a settling while the lot

Day, kind back last reverse over and we share M&A towards look about four where it's or go of our the XX-plus next three forward had able timeframe, talked we over of XXXX, to So, Investor repurchase three the percent over cash being the think XXXX, that to as to years. been XXXX, years of that

opportunities M&A M&A over timeframe. there category plenty would strategy repurchase and of there's And perspective, So, of look I from overall to support an our for share that out leadership.

we've same. with this more couple look the year for with and that more of Symetis I'd done seen a the you've Apama, think notable ones I and of

Matthew Taylor

you be need wanted have talk since ask a Can to to little and you gotten mitral anything update Thanks. what the replacement? bit repair you're add we've portfolio about you there. options And if and to It's one and about mitral about an to just time of how thinking program follow-up, been competitive? in I your

Michael F. Mahoney

Sure.

LOTUS we million; TAVR know, and point penetration well clearly So, $XXX well press advantages well And the as as as has billion, the to think ACURATE, been TAVR we size of there. over our the every And continue clinical market on of and, as on portfolio with is as $X the WATCHMAN platforms, you is our focus likely. WATCHMAN. market,

So, which have we've with investments, more been investing VC in some disclosed. our been the mitral area of not

done more organic we've So, made repair well And work through replace. well that R&D a investments internal, really we're in as as interested that opportunities. as we've VC few as on

more to on that. it'll an So, fragmented. think it's in. that It's that do than out play think we're it'll significant area We come more TAVR, be interested do given market. We a longer

area, appendage So, to priority to expect of TAVR in versus us continue our but and that a as enhance not it's our much atrial capabilities programs.

Matthew Taylor

guys. Thank Okay. you,

Susan Lisa

that, with technical for replay Apologies Stacy, much, the the and, right. give please for in information. if very everyone, Thank the you listening Stacy, conclude issues All call. you today. could we'll

Operator

be for through after today this midnight. Sure. XX:XX AM running until available Ladies X replay conference gentlemen, and November will

numbers, access code code may That XXXXXX. time and and enter Thank the today. the any Executive conclude You for using AT&T conference your X-XXX-XXX-XXXX, you access X-XXX-XXX-XXXX participation XXXXXX. of your TeleConference. dialing does access of system replay at again, for Those AT&T for by

may You disconnect. now

Boston Scientific (BSX) 26 Oct 172017 Q3 Earnings call transcript