BSX - Earnings call transcript Q2 2019 | Boston Scientific Corporation

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Boston Scientific Q2 2019 Earnings Call.

Now 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. [Operator Instructions] As a reminder, today’s call is being recorded.

the to turn Lisa. host, now will call your over Susan I go Please ahead.

Susan Lisa

morning, for and and me Kevin. Vice everyone Thanks, Good Financial Chief thanks and Brennan, call Officer. Mike President and Officer, on are joining Mahoney, Executive Chairman Chief Dan Executive today’s With us.

QX non-GAAP a in measures press our the this included which release. morning earlier issued results, reconciliations used We announcing release XXXX of the

that today’s We non-GAAP release, to a have of as the section in copy reconciliations and Filings. Relations under measures as Investor used website the call Financials well the of our posted of heading

The then and be approximately revenue provide full year QX of for and will one strategic QX morning’s of financials provide Dan ‘XX we’ll XXXX. and will duration questions. call guidance, take your highlights review XXXX this and hour. then quarter will the Mike the

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

on remind period of certain are fluctuations. Before And periods in impact relevant further the we NxThera, currency begin, excludes revenue that prior sales. organic there foreign to I’d for the revenue everyone acquisitions, no the the of operational which related like Augmenix impact net Vertiflex and Claret, excludes including call,

statements growth about other and and similar year this words. statements cost tax well other financial call anticipate, share, including federal cash note, and which and rates, as expenses. our flow estimate, spend, things, identified clinical the laws, market QX may as other performance, our launches, securities our They Also full and be contains trials, new earnings within margins, forward-looking R&D expected believe, and and savings guidance, our opportunities, growth of meaning approvals among XXXX sales, use, like by other expect, and words product include,

XX-K today’s and cause or and them. of that in results discussed recent differ the with any filed the our Factors the subsequent statements Risk section may include speak may forward-looking obligation statements. date, from described materially we differences as most SEC. update such These of disclaim in Actual to Factors those XX-Qs those only intention

I’ll to over comments. this Mike At for Mike? it point, his turn

Michael Mahoney

above Thank Boston and unmet you, recent showcased innovation at profitability to meaningful drive patient grow Susie. morning, Investor address improve Day. to needs, Scientific market, continues everyone. as Good our

In the second quarter delivered another operational across organic of our with X% quarter, businesses strong balance our regions. geographic and revenue team and growth, X.X%

free is of In addition, while we generating which delivered guidance flow. cash end adjusted our EPS adjusted at high a range, $X.XX of in million the $XXX

of XXXX We expected sight do growth reiterate to clear growth guidance full $X.XX guidance EPS digit operational line resulting X% our the X% X% to growth ‘XX $X.XX. single acquisitions adjusted high for X% for to from revenue our to organic to of have year revenue increased of and and contribution points in We XXX, year. basis full XXX organic we from had of

year, XXXX unless refer prior detail I’ll results rates sales the quarter mentioned. thoughts aspects second our All on of now of growth versus growth organic our half second to key some prospects. and the

high performance impact. recall we’ll one-time MedSurg. with once X% digit this and So, down start first the mesh adjust you solid continue Sales for increased X% organic, or single

including by Jagwire a polyps. in months, such more Endoscopy and XX SpyGlass it’s past recently trend procedure launches ORISE organic types launched this single quarters, dozen to syringe a version II, broader also As X% range We’ve continued ORISE growth product the Gel. of fueled a of over as address than DS

as product momentum single-use improved as valves. in also all lines, strong were Infection OrcaPod driven for well very AXIOS the in sales strongly prevention forward, kit we look sales up US, supply going these and by and in continued

we’re And and which represents Duodenoscope, year in on believe platform track XXXX ERCP remain physician significant to very a for encouraged enthusiasm end is this by launch of Single-Use do Exalt-D beyond. used opportunity for and procedures. We this in continue

operationally and the withdrawal point customer XX% pelvic the Health Urology headwind Pelvic mesh an market organic quarter despite organic of basis and in grew from treatment returns prolapse. the and [ph] on of organ the two X%

This is original growth mid Hydrogel growth. the was franchise as Stone strong growth by mentioned single-use full million to LithoVue ‘XX, in our quarter led for I delivered Day. core $XXX particularly at all deal tracking our emerging ureteroscope regions, model in is above markets with sales our across year and teens which SpaceOAR strong and Investor also

continued launches of second such NxThera from October of improved trends We LithoVue we challenges. also implant and half in as and the Men's expect in our the sales sterilization the strength, and year of Augmenix product Tactra where May the new have Health, in SpaceOAR in year anniversaries one that fixed now acquisitions acceleration UroPH the in

X%. the X% and believe in which EP grew to Rhythm market in quarter, we continue note CRM growth Neuromodulation but we flat and were build was while sales Neuro grew year-over-year, sales represents sequential at X%, momentum of above growth X%.

quarters, Neuromod's versus did of X%, in QX year-over-year While our sales XX% from face were comp slowed XX%. a results comp which flat first we quarter second

operational offset stimulation brain So on reflect were and Neuromod basis weaker plus Systems, an excellent growth cord the from year-over-year Vercise which our sales DBS results. X% spinal

the market excellent full-body Lead MRI anticipate in we receptivity in US the the to for Europe DBS Vercise see of to to half and continued our in second We in US. systems XXXX Cartesia and labeling Directional momentum due our

those $XX option we’re franchise, million. moderate ‘XX on full our continuum June of sales focused pain, Vertiflex and Vertiflex care year suffering stenosis. diagnosed lumbar to of offer on pain to In with generate track with remains for patients full XX, the spinal on closed excited now an

the market stim US to we to see in continue last system we comps faced cord as some year. in the softness tough early overall SCS, launch our In and due WaveWriter spinal mentioned

softness optimistic potential the in While continued half we we X% some XX% be market, given growth the XXXX expect about continue to second this XX% long-term to comp. of do

SCS half software post We WaveWriter data data. presentations the do expect WaveWriter COMBO real-world trial INS at clinical and recent in our randomized enhancements of release initial second improvement

growth was by its and our EMBLEM as Heart Management by well in strong Global sales S-ICD HeartLogic and digit driven as single led mid X% sales. Failure platform RESONATE alert, sales, Cardiac grew defib Rhythm

Our for replacement single pacer sales which declined is anticipate remains and recent track a also on an low tailwind cycle XXXX. we headwind from of digits, to continue but year modest quarters, pacer the full improvement

of X% quarter DirectSense EP software navigation was platform, second quarter. in sales the did fully the Europe, was in HDx LUMIPOINT led in mapping good launched RHYTHMIA by grow sales and and which which

future particularly for the optimistic EP our single-shot franchise, did As platforms for our Joe market we we and highlighted the therapeutic at remain our this AFib two Investor and approach. Day, about with

LUMINIZE, We our half our Europe balloon expect in POLARx the end first ‘XX RF-based year in for ‘XX. approval with platform of following Cryo-based system

Shifting sales now our Interventions to launches led increased and well, in The as Venous well quarter. DES as Cardiovascular. growth excellent Vici in in of US Peripheral in were particularly Interventional regional as Japan, the Eluvia group by the Stent quarter sales X% in X% up the Asia. the in Oncology,

summary We line June the And order the paclitaxel remains few at within Eluvia well in do Eluvia believe Investor with we FDA from commentary an Post potential FDA. the our next and risk this panel, of expect XX% positioned updated continue weeks Day. physicians to document high in represent achieve if has does guidance recommend of XX% the restenosis, patients to And to which higher types. technologies its these given guidance a continues Eluvia share drug-eluting market. performance patient segment for to with only in the

had rate leading half XX the IMPERIAL of calcium data trial, example of the pivotal calcium severe Xx XX% PTX, severe Zilver demonstrated two Eluvia is global month For ARM the of in in which the DCBs. the which of compared with in TLR trials rate patients

of IMPERIAL In occlusions study in studies. total had in is patients DCB the one which much Eluvia third higher vessel the rate nearly addition, a than the

our of month, Systems Varian the acquisition. we business the conjunction drug-loaded bead to announced in Medical Last BTG bland and proposed proposed with divestiture

make continue portfolio to We closing continue opportunity to in our August leadership Peripheral strategy. to the our expand BTG Interventional towards execute and look and to Oncology category and progress forward

all growth from PCI XX% accelerated Interventional DES. by is sales offset which Our to and There the and X% Complex Heart mid across X% in products, growth led Structural second quarter’s organic growth first partially regions teens business quarter. were in strong Cardiology operational by

sales XXX are the grew now to in an fibrillation, We atrial oral US with ahead their patients campaign results. provides of and successfully TV accounts early plan alternative national anticoagulants. is late therapy direct-to-patient as WATCHMAN encouraged by March our this lifelong important launched in

limited from of device release launch feel Europe are very transition market in success WATCHMAN plus rate by the and embolization. and no XX% and full pleased to implant FLX physicians

mid-XXXX launch in the a US targeting for We’re FLX.

atrial evidence clinical Japan in reimbursements in on trial begin advance the remain patients with also the we surrounding to to track We and post third fibrillation WATCHMAN ablation. WATCHMAN OPTION in in enrollment continue quarter as launch

XX% momentum is in study and in the XXX for valve enrolment second the and continues patient ACURATE second TAVR neoX recently of ACURATE importantly, IDE in available quarter over US initiated growth was and XX the we countries with began the quarter. now

a submissions we environment for our due with launch the European have or as a XXXX notified challenges our Unfortunately with consolidate approach to in bodies Device to as Medical Europe, expect known fewer now mid Regulation we neoX chosen regulatory MDR. do regulatory revise ACURATE and to shift in

complete well. the is Positive of drama LOTUS highlights extremely The Edge control controlled going launches TAVR. and physician free feedback benefits

for open to the XXX position cited first entire that launch substantial in that and will Edge market. and XX approach pace accounts we heart our portfolio our we’re are in in We Investor LOTUS confident very on this months Day, structural leadership long-term both

the today patients. clinical opportunity expand IV our enrolling have REPRISE in labeling We we're to significant for risk to indication intermediate see US actually high-risk we trial and

to Cerebral enjoy up. device growth finally, embolic as protection And scales SENTINEL supply continues rates the strong

over and Protected accounts SENTINEL we standard emerging and and we new the SENTINEL We’re anniversary care acquisition TAVR momentum month. XXX continue is launch we expect we now of as with globally believe this accounts that the in to

deliver guidance strength heart the SENTINEL to So combined million for ‘XX. our Edge, on structural to us $XXX WATCHMAN, in and position million in $XXX well ACURATE, of revenue LOTUS

to also once enthusiasm and again my delivering again capital. in And we Investor improving value while opportunity beyond. share So that margins meaningful growth improve to profile, believe positioned Scientific and Day, conveyed adjusted to to due uniquely EPS long-term for outlook to to as close, XXXX differentiated shareholder be our our our continues of I'd to our drive deploy at track ability Boston growth, like record double-digit operating

to thank their commitment winning our again employees life. for spirit to want I and advancing science for once

will review now of Dan financials. So provide our a detailed

Daniel Brennan

Mike. Thanks,

X.X% Second quarter revenue currency of and basis, $X.XXX growth on fluctuations. of billion which impact an excludes growth consolidated operational foreign reported the represents revenue X%

from to at the to the headwind Our unfavorable reported slightly of exchange million revenue reflects expected $XX a million $XX foreign guidance. time million headwind $XX

acquisitions contributed higher than at basis expected Vertiflex the and Sales and the include from Augmenix XXX points of the basis points not NxThera, guidance, Claret, time Vertiflex the XXX slightly did which acquisition.

month reminder, contribution of a this as only is As NxThera operational organic one as considered acquisition year. the represents May the X

The balanced top range by resulting to quarter of has second compared growth Mike line regions performance detailed. businesses X.X% in the of and X% as to X% our multiple already driven guidance was organic across

QX net per XXXX QX of of X% adjusted up at $X.XX, the and versus down was prior earnings high-end guidance range. $X.XX share tax of year, our benefit the XX% excluding

P&L tax on Earnings of at the expected EPS $X.XX guidance. adjusted a quarter. impact FX as were by time metrics in solid immaterial and benefit reflect driven was the also The discrete

XX% of for XX year, point over scrap the of represents standard gross reduced second our prior at Adjusted low end driven was guidance XX%, an range improvements cost basis margin XX.X% the improvement FX. by to quarter and but

and year-over-year quarter points XX the XX.X% the were in expenses fund up and sales of $XXX initiatives million as to SG&A key range mid-point our commercial recent at we acquisitions focus to on continue basis launches. Adjusted or of related

second at development of was quarter guidance the also flat million sales low of X.X% our prior the year-over-year. Adjusted were $XXX research end and the relatively expense year. sales Royalty in range and XX.X% expenses over or flat

operating guidance XXXX at margin midpoint QX the of XX.X%. adjusted result, a achieved As

represents which year basis of to reiterate guidance XX.X%. XXXX our rate to XX a XX% to of continue operating full XXX margin We point the improvement over XX.X%, adjusted

$XX Now I’ll million line to quarter interest move to last interest was of the and below compared QX to other in year. $XX Adjusted expense for the expense. million

of rate in the interest the than QX average higher X.X% year. Our X.X% was quarter, slightly last in

costs. includes other Adjusted primarily equity was exchange and investments dilution quarter foreign the hedging $XX method transactional including our from expense and in million losses

million our basis or due Our in year. discuss will discrete guidance tax $XX rate for this rate, This the will be a X.X% with GAAP second basis, X.X% tax negative the no quarter, below third reflected a benefit I benefit and was on in range full a approximately quarter XX% additional an net the adjusted fourth quarter updated QX which to of expected for year benefit. our of XXXX tax shortly, on

$XXX flow the Adjusted QX of closing the $XXX for to to fund Vertiflex. we cash quarter, free of the last in million year. million of primarily quarter used acquisition the was In compared cash

We billion. free continue year to adjusted to full flow $X.X cash expect be

We litigation stages or now all of settled with the additional continue mesh the to known to fully XX% claims final work resolve QX. settlement, settlements reached in of in including over

Our of XXth, $XXX March decrease was fees. additional XXXX. an a total included, XXst of reserve is as and legal which $XXX includes for June nearly legal million $XX reserve, mesh is This of million versus million

in known incremental XX,XXX, reflected litigate cost anticipated the as does due increased claim anticipated to at amount flat reserve, is required the count for the to While judicial and million $XX settlement. importantly, various remains has the orders

to total substantially anticipate payments significant contingencies the into to will which to $XXX full fund continue related existing qualified we all then million, year settlement Therefore, resolve mesh.

As payments out plaintiffs. reminder, are liability made from fund our as sheet the settlement is of qualified to a balance this released

qualified cash quarter, the payments into the for approximately million million to $XXX which we made leaves the funds, fund $XX of settlement During remainder of year. the

Capital $XX expenditures quarter second million. for the were

to fully to $XXX year, X.XXX We continue as position for shares $XXX acquisitions growth. capital outstanding. in capacity, weighted QX range the million we expenditures be of for We company ended continued integrate the to expect billion the with diluted and build million

for year XXXX. full QX guidance I’ll and walk through now And

As the it does include since guidance BTG providing am reminder, the has acquisition, not not yet a I closed. proposed

X%. year, a XXXX growth full the to be expect range we to For reported revenue approximately in of X%

NxThera, year-over-year our X% prior acquisitions. XXX of growth to the are organic Vertiflex and basis Claret, expected now of from contribution additional Augmenix We operational reiterating point with X%, guidance an

XXXX remain X.X% XXXX outlook year. organic turn rate the discussed, and half given discussed the organic momentum product half, versus half in Mike as key of growth first anniversary As the in organic acquisitions comfortable a of QX, launches, normalization revenue average half we continued acceleration our which days second selling of implies of XXXX anticipated multiple the of the and in second first the second our core, in half the thus with

headwind year, to to per to be our continue program. to neutral $XXX we revenue the while a exchange foreign expect And expect for for be the full currency $XXX to earnings share to million due hedging we million FX year to

of There XX% the is of gross no also for be sales expectations range change to full adjusted to the our XX% for margin as to year. a percentage in

basis will execute gross full a also We of FX cost year XX to and to continue positive our adjusted expect standard reductions points. margin impact ongoing

be change year spend to to of of to to point no full SG&A adjusted XX.X% continue XX%. we year to R&D in also XX range expectations versus to the Similarly, be in adjusted year XX% to expect the the a of sales, a XX.X% XX full basis for There full is range improvement XXXX.

margin adjusted XX improvement September consistent quarter to XX% basis a Day. with achieve range and from prior to XX.X%, versus last and Investor result, unchanged a points XXXX at we we up month's expect in XXX XXXX operating goals As last outlined to the reiterated of

our an to operational year approximately benefit approximately on X%. adjusted based now we from of Due and not full XX%, for rate tax second XXXX tax within outlook beyond This stock slightly tax is the tax expect from discrete basis the quarter, XXXX. to will rate in of more be discrete our benefit points benefit quarter standard basis which tax XXX the the rate than XXX the points nearly compensation accounting impact

portfolio for million venture program first approximately our our year exercise below the line make-hold payments, call hedging the includes and interest be million We to include $XXX the capital which expenses $XXX with to costs associated quarter. dilution expect from and in the

We interest XXXX. is weighted Note full expect and guidance transaction. QX adjusted count year results X.XXX we billion after diluted the close excluded shares that to the fully proposed average acquisition approximately X.XXX currently a billion the for provide will of related updated BTG from for shares we and expense share

earnings our reiterating full year XXXX $X.XX are share range to $X.XX. of We adjusted per

this a be to tax beads the BTG. we close of benefit $X.XX our Varian divestiture embolic expect by upon business Although we the quarter, received discrete of offset this to largely

withdrawal. from offsetting we're As the mesh residual a reminder, also $X.XX the impact

$X.XX earnings represents be to per This growth $X.XX $X.XX range tax we of basis, XX% to range XX% expect adjusted a to earnings in On benefit in excluding net of GAAP XXXX $X.XX the $X.XX. base. to share a the

Now turning to QX.

a to in to as an points expect that Claret, of additional is We be growth and X.X% contribution organic basis range X% guidance of from acquisition This of growth Augmenix, Claret in to operational organic XX%. reported in included a XXX X% the August. Note range growth year-over-year represents approximately with revenue Vertiflex.

million exchange expect on revenue impact to We the foreign $XX headwind. to QX million be a $XX

adjusted be X% earnings quarter, third $X.XX do for is FX. and adjusted we expected share. EPS the quarter to representing not to a the For growth share, third per is in of expect range from per of XX% per per $X.XX $X.XX to a $X.XX range earnings impact expected to share GAAP to in be share any

guidance. QX, XXXX including QX Please as which year check and outlines XXXX well full our operational Relations as QX financial website highlights, results, and P&L Investor for line guidance item

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

Susan Lisa

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

Operator

First Please [Operator of ahead. Lewis, line David from you. Thank the question's go Instructions] Stanley. Morgan

David Lewis

question. the taking Good morning. for Thanks

in and deliver you it like a at third the similar momentum the number the quarter, know, improve of second year half as about third to quarter did in rate Dan, an Mike X-ish needs of kind to for quarter. the back thinking Just the

on organic? have drives then certain what going much a I How is days versus So quick that And recovery up. confidence? or business predicated deals selling follow

Michael Mahoney

the David. Sure. for Yes. Good question. morning, Thanks

So that half. annual the second it executing I our pleased. am or half acceleration line plan really was versus in Essentially knew with what is. We first required we’re the

Now year updated that. we we out well that full give our as thought guidance is when

line the So which organic in acceleration with our full fourth reiterating we’re to year in outlook, essentially X% plans, does obviously, imply, quarter. quarter X% third our

that. pretty to And straightforward it's going deliver how we're

more are two first The mechanical.

one less have half. first have and our become selling more the some being Claret. The we and half of the more solution acquisitions day one day another one second we selling And first Augmenix in organic, mechanical NxThera, is

So half. that’s second accelerate those of are growth ones kind more helped that the - the mechanical the in certainly

But actual businesses to grow the peer continue all than of in business, faster our of EP importantly group. that pleased of their with terms the see exception to

lot a momentum. have We of

regions Japan we’re the the quarter. in return to Specifically seeing in growth second

anniversary We recently price our expect from based of occurred. in the that acceleration strong on cuts Japan team have

New we momentum And September. recent selling product is building in reimbursement anticipate the in which of launches approval Eluvia, with for and Japan. also WATCHMAN, which news

on greater regional US very of of Edge, well and broadly and basis, that Europe of year strong nice the the see requirements. and as to pleased emerging as and approval of would our and did lot And executing job the our supply beyond a continue second acceleration acceleration markets quarter, So Europe I our VICI of just of of to SENTINEL stent, supply just initial our in continue LOTUS a the you’ll Asia results expect to which teams say The WATCHMAN perform a supply very we’re launches, FLX impact accelerate. to momentum. full we continue have with

very momentum day with - pieces that we're additional to as company, well second new operational and the as businesses, half mechanical of good across greatly, launches across So our more the impact the selling the we position have in organic. product supply

lot that from all confidence derive that third the in and quarter So of gives can fourth us quarter that. guidance the a implied you

David Lewis

very Mike, very helpful and clear.

traction – controlled of the an Thanks sense us number the frankly, of any penetration quick for feedback be the and center still basis? expect issue Just And was center from second one capacity a the you of much. so through quarter? here of centers. rollout LOTUS. to on XXXX? end SENTINEL this Can average we case on did Should follow-up still Thanks SENTINEL in give

Michael Mahoney

Yeah.

we the don't first do we of have SENTINEL, that So the half it – not within constraints we for had supplier have the call SENTINEL year.

great in team that ops So so done to and combination Europe, you’ll see start SENTINEL more usage that job with the and a LOTUS. with in ACURATE

been the team So European more has constrained.

and enhancements centers SENTINEL So growth with more and you’ll start to see the Europe opening in some US. in

story think be SENTINEL us. will half a second I for strong

Just with and well couple last we saw see which a to was physicians [ph] low-risk of with shocking used of some a also these of with at debris week, and pretty cases competitive very received. couple I being valves TAVR of live valve SENTINEL SENTINEL cases anecdotally, the performed amount our that in patients some

they in So of terms I that. well are once SENTINEL think from becoming as physicians very use comfortable ease-of-use, impact the as its

of So a focus there. lot

we're we really LOTUS pleased, to On expect accounts our delivering XXX open. The essentially per commitment. that

that. deliver to track on We’re

not are PBL share the of And is elimination delivering We’re the this would The uses would kind by I to and pleasantly reposition been of long the promise. doctors unique delivers. it bring data has to that ability the the account. on the a usage features surprised time data, device, going into say market. to coming by provide its or I controlled anecdotally, say, of But

proctoring. made, rollout we’re deliver in quality, And and LOTUS. and the given that and long taken, of planned two focused patient our that run commitment time the valves investment to And strong the outcomes as the this it's with financial we’ve on we’re for really going

Operator

you. Thank

is ahead. question from Please the Next of of Hopkins, Bob go America. Bank line

Bob Hopkins

Hey. Thank good And morning. you.

okay. product-related two So if questions,

Thank wondering, you any was growth underlying growth I have rate spinal a in second in stimulation, could give in sense on cord stimulation market thoughts then the additional just the trends business you. you if cord that us of broadly, XXXX? And for spinal on here First quarter.

Michael Mahoney

Thanks Morning, question. Bob. for the

is your happy the diversify team business. about continued question. that Neuromod to before level I to get has high thing One we’re Just right

led spinal be cord we’ll question. by always stim So our

our significant. team Second, growth is and diversified international job DBS platform more with becoming our excellent with our Europe and is doing an RF SCS Vertiflex. further and we but in both The then

gives that are categories more that product multiple and So us regions contributing. multiple

for in candidly ‘XX. some faced second comp which On had in XX% We the did second growth quarter SCS standpoint, comps We Neuromod to in itself see BSC we franchise in US SCS quarter good last is within market from the from brutal sequential the first quarter. year.

encouraging. that's So

And their amped our strong. patient activities awareness was and in gotten team up have needed. significantly may kind other ‘XX, because more wasn't has away the of little It fundamentals we bit that a from really volume

in So growth - We unmet is the market. we the work done. that our that on call based stick view, this survey we significant single of that patient with upper and lack a we’ve see, alternatives, it need digit

continue that the So, to that we fast believe first second then - go we’ll we half we’ll of we half in volume have seen slightly and XXXX in in less market. expect and to improve the

half look when So, second what are of we are. our thoughtful projections conservative for ‘XX, obviously we SCS at guidance about the our and

So is guidance. into tapered I that view our kind think built of

lot long-term So we of we in have. market a have and of that the the outlook the portfolio growth confidence

Bob Hopkins

to provide that. the sorry growth to a I Boston just but am spinal Great. the as you’re willing Scientific cord the if quarter if Okay. of rate specific in business I was And stim, cord, [ph] it, missed then I'm there spinal second curious

question my was paclitaxel. Peripheral just on quickly second And and

versus Is what happened sales there any QX of noticeable Just curious change QX? in paclitaxel kind to as there? to

Michael Mahoney

Yeah.

question, your and just decline quarter So, in upper the of kind did the specific US second up. digit OUS single SCS was to

so there And softness. significant suffered again volume and against comp was some that - the we

the the did single in US sequential but saw we decline So upper it - so quarter, growth digit. SCS the

paclitaxel, Day. really outlined On Jeff that at Investor new, nothing since

clearly at We guidance expect believe also commentary to their written on in long hear in us will and and line from the guidance think kind documents the Japan the US. panel, for driver August as in nice Eluvia as we with a growth of the then be we FDA in document their

So really Investor nothing Mirviss comment from changed at Day.

Operator

you. Thank

question is Please of Vijay from Evercore. Next Kumar, ahead. the line go

Vijay Kumar

my question. taking couple for Thanks of guys. guidance quick questions. Hey, A

very equally The in or XQ XQ more that between split XQ back simple. days Mike impact half weighted? and is first one that The or Dan, is

Daniel Brennan

It or particular the I just half. wouldn't It one the quarter. - back quarters. to rolls one rolls over two point it in over month just

Vijay Kumar

guidance OpEx you below. assuming this Understood. higher Dan, And EPS spend just are I'm on think you offset mention is and heard by launches. I commercial tax rate support know, being Maybe highlight Thank I the you. a couple going? change? August does the spend changes fiscal math the of BTG to where any given this close $X.XX is for the And contribution in $X.XX or the tad

Daniel Brennan

Yeah.

August. the So, obviously, until comment BTG we I’ll deal should in hit Can’t which that actually rules one on be the all sometime first. UK on that, just say based closes

Relative LOTUS. to we the think SG&A, you of that launches have, you have

We’re gearing up for WATCHMAN in Japan.

We have Eluvia going in Japan.

some and have franchises. of momentum Endo MedSurg in other We the

in is from that SG&A P&L of the comp at it's one look if of the again growth then other last deleveraged terms quarter nicely and the XX% things very you of in the the because in detailed And year. Neuromod Mike

XX% making market as business any a we because to fundamental not So to we’re we X% fantastic think that's said. changes that

P&L for going Neuromod we're P&L a We're of that The to little bit deleveraged. the in that that's impact and deleveraged little keep quarter. that because is the that the key launches in a with of probably reasons. bit has a quarter, the So long-term. engine fine going But

Operator

Thank you.

of question Wuensch, Our Joanne the go line is Capital BMO ahead. next Please Markets. from

Joanne Wuensch

deployment just you announced continued year everybody. hit so in are you to area? Last one regards XXXX. taking capital like the this upon in morning, acquisitions. in thank And far to XX XXXX, Good you question. I’d What for thinking in

Michael Mahoney

for Thanks Joanne. the question. Hey,

August, significant in ready Interventional synergies Oncology excited tools the in that. the So divestiture, it's to about – I go within B one our that. be want makes products, longer and and will we’re given we team's and cost which but – acquisition. closing next most leader thought, category we BTG the than strategic is we’re all aiming on we're the that for, been There great deliver us through But

one do really acquisition. deal you've far, seen thus ‘XX, us the Vertiflex In

down pace our of of end acquisition with almost slowed here. So through one July certainly acquisitions

to we do oriented do tuck-in capacity of And a XXXX wanted if more so couple we to. in have acquisitions

have And quite high the are or years. see we anymore companies do coming some over and to I us year you'll one acquisitions two the this of valuations really portfolio prolific, a acquisitions. acquire do But or that say, very DC be two determined from at whether we potentially tuck-in most the portfolio would that

have versus as to So at volume XXXX as we’ll additional - outlined Investor planned, you'll once continue significant in XXXX. delever And then, see significantly less capacity we Day.

nice have for us. the sense financials in tuck-in the and for works capacity XXXX make more we’ll acquisitions, if strategy So

Joanne Wuensch

on a Exalt you then that Endoscopy FDA. it D in specific and should product, April we to think on business submitted your the give you an on just of - about update how Can Duodenoscope, us Single-Use general? the to And timing Model

Michael Mahoney

So, firing the of that continues kind and cylinders. have they're significant number XXXX deliver They team is throughout against on of supply to there. Endoscopy business chain in requirements all on launches product the general executing the

of second confidence Endo a frankly half. XXXX half of that versus the first growth quite will So accelerate have we lot in the

But the this and continue our we team we they by put On makes there it the launching do that through this continue in to end. test good doing. product physicians clinical of expect and ongoing year to trials are the the hands and duodenoscope, progress approval product we

another quarter, also to half reason impact the of in is you’ll which acceleration. duodenoscope support some see the our Exalt, So second fourth

at executing per So of high The Endo of in level, business a hitting kind at cadence Day our track. is product say the it's duodenoscope discussions on is particular launches track Investor the on and I would

Operator

Thank you.

ahead. Larry go the Fargo. Next question Please from Biegelsen, is Wells line of

Larry Biegelsen

the One question. question. Thanks product morning. guidance question for one taking and Good

what on to compared there you Mike, Japan reimbursement And the And US? WATCHMAN have how thinking rate then, do So follow-up. are yet? the is you one about the in have And trajectory I Japan?

Michael Mahoney

Yeah.

the little we’re that. in Dr. be the $XX,XXX last quite just text good. about look we’ll let the in a reimbursement and call with just frankly a two range for anticipated. bit reimbursement in bit approval time WATCHMAN at launch pleased dollar indications reimbursement But our the night got US Japan on period. better second. mid-September economics and clinical So a morning in start It’s conversion it Stein We The I’ll little will the a than like talk

to nice that a I’ll Dr. you’ll let see Stein give in comments. So from fourth And the benefit any quarter.

Kenneth Stein

Again, Thanks, for we have as and tracking PMDA Japan, now approval launch in approval said right now Mike. MHLW September. Hey, Larry. Yeah. Mike in reimbursement to

sort the very of are use it. we’re by for guidelines very and see pleased all it to the United together, what Just we in States similar putting

Larry Biegelsen

the Thank guys. much. for you end growth guidance XXXX? gets Mike the what organic taking range end the to versus low the for in then you questions, Thanks of very And high

Michael Mahoney

got more. His some

is I of it's think for really pleased. portfolio we this the commitments that what’s plan just cadence strap the our really would given the days acceleration really We per - half This was team have. I'm say in the schedule executing the the I and did year. the second for

WATCHMAN, a now lever nice I know, think the heart there range, SENTINEL business approval LOTUS, with WATCHMAN, within with and is momentum You in continued Japan with this ACURATE. of the structural terms that

within our So swing range in I there. think factor of size pretty the overall a terms that's good

that think doing Japan extremely I excellent broadly and China Asia Asia - then I And say would growth. well, yet is

has big sustained, back to for a which of The Japan to it So that in Pac. healthy see Asia years. need growth is number momentum we lift getting for a us

I a those think couple. are So

produced have on hopefully just single are and then exciting slower than therapeutic our - of the have MIFI growing catheter launch. some in our shot Europe exception and – with strong direct where DirectSense and in market new we’re you launches US, EP we coming And

So to in XXXX. healthier EP get we expect

of So them. across in lot exception that a with the momentum of is there ‘XX, business

the if is in points of is momentum, which execution our particular think ongoing heart, that Asia - us. in structural kind the kind I swing I plan the for the would so meaningful say growth on is And of and

Operator

you. Thank

Jennings Next from line the go Please is question Josh Cowen. ahead. of of

Josh Jennings

mortality upcoming questions. follow-up morning. And the if are, just on internally assuming market? be there good more recommendations. taking to Mike, Hi, that a and potentially paclitaxel a Are their the Thanks you I guys impactful devices. detailing signal be that panel for the a will label paclitaxel change had why FDA wouldn’t you quick

Michael Mahoney

will if question answer that hear you’re that be one to or able helpful. Dr. the Meredith

Ian Meredith

hear that. I Mike. Thanks, did

be. what as to the likely the XX summary guidance gives statement think would I the of the from some us hour outcome FDA guidance next

that paclitaxel As clear. that benefits not US risks that that been IDE you was there methodological unanimously short-term were we trials, the the to in outweigh might signal the agreed devices reasons there panel coated four saw know, have that these actually which mortality why

is targeted paclitaxel DCB of drug-eluting and class that and delivery of delivered. a And behaves analysis. that not panel it's course far than effect thing a actually It was terms the way to the in describe included important like the focal stent devices, Eluvia more in mechanism other here couldn’t and very that’s

the reasonable the statement. panel points far to fairly actually feel we from guidance that next So outcome thus a

So I will it bode for well suspect Eluvia. that

Josh Jennings

Thanks there on follow-up the your understand actually are could metrics help positive physician how rate? lot with of the for table us you’re on marketing Edge, just customers. for a LOTUS to that. one Meredith put pacemaker of And Clearly, Dr. you some

cohort saw But pacemaker combined you are a I Is rate XX XX customers? double-digit down of we in think putting LOTUS days. Edge the physician patients at low forward the to at that guys TVT,

Or I do we questions. with need did FDA then going get the that XX Edge, to see brought approval the taking going patients Thanks to XX forward? a is you to you think ever data? – be how that patient And for

Ian Meredith

then of question. one come Okay. your first the Thanks. second part to the answer back and I'll first

the a and XX-patient As to continue you pull of know, We registry actually registry. was there study didn't that occur. ongoing. that to – that in was the pin that [ph] nested to focus enrollment decided study issue related nested The show is nested

we can we with the FIN-Z had where order before of Edge REPRISE where rate. rate competitive both have that that significant and that we a and set So XX% pacemaker We the rate. the actually cohort will that studies mentioned believe ultimately pacemaker assess in patients will pacemaker be you a data of magnitude from

when nested that study. probably IV So which indication of that, with report out registry we’ll REPRISE in ongoing pacemaker - other and the is is have clearer we’ll give that study ISRs we will have rate. us along XXX And and patients

how rate are need rate we pacemaker and we along the that REPRISE for the ability have we from the suggest studies PBL – have full alluded other position data the Edge rate assessing FIN-Z advantages no – Thus with you will very valve that to that far that and and that’s pacemaker valve. in a competitive all the best-in-class lowest

Operator

you. Thank

Next Matt UBS. go the of ahead. Taylor, line question's Please from

Matt Taylor

European I on ask regulatory Thank to question. want just for environment. taking one Hi. you the the

delay could a the of cost other bit little programs? of with you your in mentioned going Do terms or more lines a programs that’s that characterize is to to issue? this You there. one you additional think that kind something incur of the time chronic be EU Could you it

Michael Mahoney

Yeah.

the I process adding significant others. in certainly the provide in us good some resource over the requirements companies run, other MDR So MDR that short process – is the the think Boston will it's investment We and think for But requiring. the long Europe. run, clearly, for to request be Scientific this and from a

equipped financial processes the longer term capabilities I expense we’re in internal near think it. do of would term, think item our I more So and resource terms it's in of certainly to And and allocation. a

of it than smaller might greater the have I - a small larger companies some impact on companies. think the

ACURATE piece, our Specific IDE neoX there trials. good news we’ve the is initiated the US clinical to

second Investor market were Day. per our US So the on schedule that to valve to bring

delay our obviously, protection XX Europe of months - capabilities in neoX, there. ACURATE we won’t We are impact embolic six for and a our existing our months to think seeing like ACURATE

help And expansion ACURATE what that approval notified we’ll better essentially with we bodies submissions portfolio and regulatory we’ve with doing future tried performance consolidate do fewer and think But long-term notified to is fewer regulatory bodies in have Europe. working timeline. in our will it

a down selecting them a as product So of Europe the the we’re it's agencies the on given more new agencies challenge of question valve, requirements for a A number of working with. them of quite specific it's and is number MDR not with in number well. that

with following expense with Europe obviously near and think working best of we for think so process minor is some products. challenges in them that Boston term, And will few but in there some Scientific, delays be we and

Matt Taylor

clear. growth out call very market continues Its kind emerging growth? there? XX% And be operational you there And Okay. can up this strong. anything to keep to long really of then how Is

Michael Mahoney

number Yeah. across doing while for news and countries. the a We’ve a of good it is been it's quite

and Australia, team, the there Japanese the the the China. much in primarily more we’re So is China we used and now and diversified Korean is clearly the to largest growth there be benefit ongoing Asia catalyst in a strength company of with

of China markets playbook which just driver its our key our of But for China kind rather emerging the the is to much of so of is stents us, historically. it drug-eluting all was than really portfolio what and bringing

China, Our divisions our as and business complex there. well PI our business business are and is exceptionally growing in coronary up other Uro Endo is and WATCHMAN and scaling

approved So our I of getting ongoing think an our products portfolio there. it's diversification

momentum So China. in we expect continued

don't the emerging second in see we in China or a So half slowdown markets. the

that seeing the challenges, in in and East America nice countries. Also rates. in parts profitable And despite Middle our to of and certain above - market continues team we’re ASEAN the market growth makes Latin continues well Africa grow

biggest emerging So the but quite there is China a is slew markets, driver. within the

Operator

you. Thank

ahead. of the go is Guggenheim. question next line Chris from Please Our Pasquale,

Chris Pasquale

in wanted patients? to expect unclear out the and guidance Mike in FDA's comments coming that the to was document you you are would recommend on too. just only understand Dr. place. actually updated panel take them high-risk products Do maybe paclitaxel used Meredith here chime something if be you your saying that of thought Was can

Ian Meredith

Mike? want you take Do me to that

Michael Mahoney

Sure.

Ian Meredith

Yeah.

it XX the statements agreed want I XX-hour was came from summary be. data the FDA follow-up fully that – that assess very the the is from and panel to longer-term will need speculate that the approve with that that And be there the trying continue hour to actually to that understand But data So summary, the – on position in XX-month clinical likely to FDA's agreed what devices will don't – for to we the and efficacy. safety panel signal. draw should a we

Eluvia use saw two is think, TLR prevention at I there it's as and be benefit a we – to the there That established fact there restenosis. and paclitaxel with was of both Mike will no differences one for very the actually that years. class that continued the likely alluded clear effect clear and

high-risk Obviously, to be of it was, that it's the decide suggest the that But the be there one came and I it patients. for that – of – for should patients appropriate that treatment. up comments think to out this the physician easy will to is who important

Michael Mahoney

look assuming year. also, for I our implied third think, just guidance, and significantly fourth originally specific growth we're half, at quarter we to planned slower BSC, quarter when the just second guidance broad for than

derisked because do uptake in to seem the our in as we in strong issue doesn't concerning sales appropriately, we bit this be but Japan, quite Japan. see a Eluvia So guidance

with within But PI drivers in more it's I addition, just questions our business importantly, think, what around happens there growth paclitaxel. because the other is

know more we'll XX in So, next the days.

of that growth question, if days are drivers from even PI VENITI know the Interventional FDA you topic closing we that. remove a the with XX business in to the continue Oncology within – launching, Stent with But recently on BTG, piece. Eluvia have number of We'll strengthen there's that more will our

Chris Pasquale

been follow for helpful. line? up up while. LOTUS. give us updated a And then, and a has little on now running time an REPRISE just you That's Thanks. Can IV

Michael Mahoney

second We're not run gave the a our half on when gave we we paclitaxel home in our guidance. assumption all on expecting guidance. not That's when

Chris Pasquale

Mike. on REPRISE quickly just Thanks, And IV. then

Just to when see when to Just get there, for the label a Thanks. get you build? data? expansion that timing trial we on expect enrollment get want completion that and any sense of update guys could

Ian Meredith

Okay. Yeah.

REPRISE So of the XXXX. to early be It's the as study, a that XXXX. you year the on of well probably patients and lot one That’s completion a recruitment study early feedback trial with going there’s the REPRISE single-arm sort IV a know, should follow-up, and of positive on track the study completion patient study recruitment. and in in is IV

Operator

Genuity. Jason question of ahead. go Please next Canaccord is Mills Thank you. And our

Jason Mills

taking Mike, Dan product-related team. morning, Good Thanks questions, Mike. and question. for Two the

second and growth has grower Neuromodulation, notwithstanding plus the EP specifically for a you, slowed. is on First on SCS. EP

with will product the sort what in market? the about range higher commensurate new of You end that of team's drive talked on Is back launches. growth the

grower Do see what couple as of envision the you that And also do will over years, the course of business say profile? over you this term? longer next the let’s double-digit augment

competitor, question one market? other States think And commensurate share a really your respect I'll of you what you the do second seen SCS we've growing Thank Or short with report one that my with with SCS. you. performance to just United one market on you competitor? it’s in now, ask the is Based lost sort other and

Michael Mahoney

nice some we don't Yeah, yet. enhancements had second just product SCS, of the in in We know coming half the year.

to the or our Tough so. growth haven’t report you of some want CAGR competitive comps year two If XX% it's this we do yet. had year and

we’ll or or gain held So whether share so, share know in XX lost more in days quarter. we any or share the

on Dr. EP, Stein comment. can But

in overlap size profile a and we on we growth the and the the with long-term given this that think commitment is this the call capabilities. market the that business, EP have point of I have

a right really cities tale two of it's now. so And

where strong therapeutic Europe catheter in doing our extremely have its is growth we doing launch RHYTHMIA, well have quite We and well.

pieces market portfolio growing I that so is and all we market. don't is the portfolio, has. the US above would have And Europe growing And Europe say US below

quarter of bring Europe's by the we good market RHYTHMIA, So the think well for hope time differentiated a doing And future. us trial period. DirectSense the to I end a for indicator beyond and the therapeutic to which catheter, is the momentum fourth

that the Europe US in for start XXXX So our trial nice U.S. and have in will we’ll us in a impact

this think will can US hope see to in be And approval Europe continuing faster the lag DirectSense in year the first to half. we likely the until XXXX. get US, I of grow the So half in and than second quite market, bit which we you'll a

I get multiple a single suite will get therapeutic of grow the single-shot. once once and think longer and and So more shots goal be that with we we effectively term mapping we’ll the catheters so then then full see systems, only on US company shot, you'll

do more any in be will differentiated. portfolio the just Dr. So It comments? have US. lags you quite Stein,

Kenneth Stein

offering like to key treat most atrial most rounded, said, portfolio to that fibrillation. the what to tools need Yeah. you arrhythmias EPs Mike just reiterate our comprehensive the of strategy complex is

different catheter, RF and LUMINIZE two balloon cryoablation So cath. techniques it's POLARx single-shot or

density, and having mapping with mapping, both high the with be RHYTHMIA point then with will DirectSense. It’s high unique DirectSense high also which having come resolution force catheter, and to our stable market on what's

to able And that comprehensive monitoring Securus, There is of then kind to procedures. a in that’s esophageal addition competitor is which portfolio. no during acquisition like thing our and a that offer for of protection ablation monitor temp infrared

Day growth moving talked growth path these to like HRS, had then for as at of like been traditionally about product also Joe what the our is the single-shot have mix then And complex segments fibrillation. and mapping, from growth at double-digit Investor’s Electrophysiology segments, atrial higher I low in into and

Susan Lisa

Great.

the conclude thank and joining now with Kevin, we details. Kevin much provide the everyone We Okay. that for will very going call. replay to are us,

Operator

you. today gentlemen, conference this midnight. starting be Ladies and Thank will at AM through available and Eastern will that's for XX:XX X replay Time and run August

dial may callers with International AT& XXX-XXX-XXXX X-XXX-XXX-XXXX by area playback with the may access You dial one code XXXXXX. the code the XXXXXX. Executive dialing T code access

We conference. Now that you joining. do your does conclude for thank

now may You disconnect.

Boston Scientific (BSX) 24 Jul 192019 Q2 Earnings call transcript