BSX - Earnings call transcript Q1 2021 | Boston Scientific Corporation

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Operator

Good morning. And welcome to the Boston Scientific First Quarter 2021 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. one one to follow-up. yourself limit question related and Please conference to Susan I like the over Relations. would now Investor turn to, President, Lisa, Vice ahead. go Please

Susan Lisa

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

this copy We on have in one approximately the and that XXXX posted details Investor website Filings. fiscal review as well then will his morning's reconciliations take Mike to hour. of provide heading the future as call QX the a outlook we'll guidance, Relations XXXX quarter, used call of for performance, measures the guidance. will the comments questions. release as and of our and business your fiscal Dan & under as be our will QX non-GAAP including section focus for the year of well Financials today’s catalysts and QX financials regarding our Duration more

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

second acquisitions I excludes Vertiflex and Interventional which which which sales, mentioned excludes the Intrauterine March begin, and I'd of was and Specialty earlier which the March X, versus and Divestures further May respectively. Specialty announced of in Preventice, XXXX comparable BTG BTG impact Pharmaceutical of mid-August the portfolio Franchise foreign surgical month growth closed period growth divested divestures XXXX Medicine, net as and the the and XXXX XXXX are and on XXXX acquisitions relevant Lumenis revenue XXXX currency BTG of they respectively. global revenue in anticipated. organic Guidance for mid-August Health acquisition one no which as closed growth recently X, we embolic Before and XXXX microspheres quarter include and excludes businesses, divested operational closed like to originally that for remind call, than March were fluctuation, organic the Pharmaceuticals, which X,XXXX include everyone and

For are website. which our information, On slide found please refer of revenue, and references financial and organic. highlights to all to call, Investor our otherwise operating sales specified Relations this unless deck, on maybe

COVID-XX operations among other Finally, periods, and identified words spend growth include, described impacted excluding be earnings, COVID-XX believe, to materially our between the and of that I'll to growth clinical Mike? within our are use, financial we Mike well note, laws, company's securities other this comments. Risk in his our to section opportunities, such trials, performance, this with the launches, estimate cost and of statements R&D the as as disclaim expected comparisons update market rates, growth point, call recent and forward-looking contains today's subsequent of At only turn flow most and represent and date, not by like sales, margins intention filed them. anticipate, over X%, pandemic. any it COVID, and other the X% those Factors upon XX-K and similar financial include XX-Qs may SEC. These expenses. expect, obligation our goals cash cause speak of or for about the as They our differences and things, and of the tax including which may Factors which Of the pandemic results time in federal new meaning statements results, share, impact by words. approvals savings statements product

Michael Mahoney

grew M&A, good a joining both revenue for everyone to for had versus report Ranger anticipated, and with a half guidance to of XXXX. both clinical and our grew product start ’XX share and for which in quarter operational and and of X.X% gains market in milestones in the across second tuck-in Thanks, new expectations the sales you than versus significant X% ’XX quarter versus as Susie. cardiac procedure sales stones. Organic recovery results Preventice leadership X% LUX-Dx exceeding launches, kidney ’XX, ’XX. advancement came regions. many and versus and to stronger And multiple Genus leader product including Eluvia platform. businesses cardiac Lumenis, these new company exceeded Brain catheter, and notably thank today. Deep DES, and continued strategy is of of our a Financial DCB, our POLARx diagnostics Many Vercise XXXX Stimulation monitor were EPS most first implantable gains us laser growth and and return pleased launches category ongoing I’m technology our Total with fueled by their

ability of our record and to plan, six-year against execute towards $XXX sales adjusted in high pre-pandemic to First quarter to our healthy primarily believe due ’XX, performance and flow. ’XX higher controls. operating adjusted ex-COVID by performance EPS X% Adjusted guidance better continued exceeds XX% cash which and the end versus million. of $X.XX results spend improved of track of grew and margin objectives with versus and X% an solid we’re we $X.XX, expansion, these sales of free growth progress regain are X% was cash flow free than adjusted organic EPS our growth, expected $XXX XXXX pleased of million XX.X% and operating from margin to We excellent cash demonstrated free of our expectations and as strategic ability goals line really drive with our for deploy indicative our importantly, double-digit flow generation financial

the positions, the of Wednesday, enhanced be XX. emerging of markets. and ongoing look you and our rest the year we’re which And capabilities category We’re September on Investor growth encouraged headwinds outlook year, highlighting to capabilities held with our pandemic digital by expansion given further forward we from this these into innovative higher the execution, well-positioned, commercial the of pipeline, leadership at Day will

continue versus more and from we of a the normal impact steady in recovery procedure with less levels ahead, an ’XX. quarter looking second to from first pandemic expect second in half COVID-XX the So quarter

first quarter the EPS. organic the outperformance, adjusted for Given narrowing range revenue both and growth full-year we’re

XXXX, plus to second second of and quarter organic compared growth to organic So revenue plus XX%. XX% of quarter XX% to targeting to year, we’re full full to to XX% we’re the of growth X%. targeting X% for ’XX revenue X% Compared year growth X% and ’XX,

adjusted will EPS close expect continue also is half Lumenis. we to $X.XX. a adjusted second the quarter $X.XX the to Dan give for updating full $X.XX and Preventice and to $X.XX second ’XX to Our range from revenue of EPS we’re year estimate revised contribution

So quarter now quarter with some ’XX, additional commentary highlights I’ll some provide second the in outlook. on and first along

first was operational the in Asia, versus versus supported lockdowns ’XX and on uncertainties, LithoVue, as quarter X%, as of East, with to strength and grew expect impact across products, recovery, which behind negative China versus quarter in the stents of going PI, growth Complex portfolio. diversified particular basis drug-eluting Endo which quarter expected both Africa US despite later notable X%, and versus momentum related is ’XX, such first of flat STABLEPOINT, product sales Asia-Pac particularly well DCB, versus portfolio impacts. driven quarter in product the entire In XXXX, grew sales markets every year tender year. first as ’XX the some the PCI the with full is we quarter the Europe, WATCHMAN growth product East-Africa by strong versus new double-digit COVID China pricing innovations XX% and first The Japan, ’XX, US the XXXX particularly PI. first imaging along even grew FLX and in Middle portfolio XX%. the countries quarter in and market rest majority in new grew first Uro as experienced and the Middle balloons. emerging versus grew regionally grew in thanks grew reflects in Endo, forward, procedural market and for So, EP by were the Growth as launches saw X%, launches an March, Ranger and and in ’XX new procedure with

XXXX by year and now Health grew on and we’re versus market patients. fiber continue I’ll compelling of Prostate Stone organically grew to strengths publication expect with demonstrating And second X.X% to reintervention Pelvic global also results to X% Product share for of the drove versus footprint Health. double-digit XXXX fueled ahead low our and surgical the and double-digits, with XXXX. extend first quarter momentum year. out continue include We growth in Rezūm’s is in The five-year both growth technology. some Lumenis balanced build to of expected deal business with and Rezūm growth for the was excited half SpaceOAR the durability continued Urology expand Hydrogel, leading commentary to full units. of highlights our ’XX rate regionally additional for which continue its the Stone China business. provide BPH and the double-digit part in the overall Vue a sales looking portfolio the laser SpaceOAR with and business acquisition close

improving market XXXX pancreaticobiliary, Discover pass DS, as EXALT share access Medicare prevention, recent versus D strength thanks in in have to sales technologies increased started led capacity hemostasis grow double-digit ’XX, franchises differentiated infection such hospitals continues the to and all is and such our regions and has per For we new through in and versus organically as to globally payment. to grew Endoscopy, momentum gradually key with Endo SpyGlass XX% see AXIOS. protocols, hospital by establish as and growth launches outpatient

sales market. our remain for the to continue were In Management, target ’XX also believe We that CRM our Rhythm long-term half the Cardiac and broadly. up XXXX bronchoscope performance we and scopes single-use single-use X% on opportunity second below overall the launch in versus slightly was bullish organically of

our we slight pacing beginning pacing mid-year replacement the ’XX, ATP, MODULAR dual cycle and and a patients. standalone the anti-tachycardia forecast pacemaker, provide well to year For for enrollment is tailwind clinical as anticipate full leadless to in which study from S-ICD as track EMBLEM a

gaining term cardiac Preventice its performance monitor mid-XX% given detection share, arrhythmia growth streamlined acquisition which reimbursement ECG, for pro the expect Bradycardia given testing and and US the portfolio, Our of of LUX-Dx excellent basis with as long Xst Preventice on grew monitoring. we many are pro Preventice with high-quality plus-XX% testing, signals, back-end segment forma of implantable modalities offer algorithm full pleased — forma for in closed ECG a all And to its recent ability despite the and launch in We March algorithms. is ’XX, four quarter. one challenges

POLARx, which of the cancellations force-sensing cryo ambulatory result the patient stim alert an ECG, US IDE catheter and its diagnostic in therapeutic including our strong that has the and good DiresctSense Europe versus first a We’re start rates the with XXXX sales into X% improvement trial LUX-Dx, excited revenue cord STABLEPOINT, start to seeped ease ability heart challenges despite and in Electrophysiology modalities, called failure. sequentially and Neuromodulation, versus of is also enjoying Europe organic surge. begun and quarter for a grew is second-generation taking and were to to in position and both the also is in all a effectiveness In HeartLogic XXXX X% February diagnostics cardiac and share, in Japan field ICM have higher detection enrollment up COVID due December and unique such January the of catheter of to spinal NEWTON-AF. the is our off single-shot its given use. offer

improved franchise our As excitement waveforms in due to next-gen XXXX system. and with paresthesia-free performance extremely accelerated segments franchise SENTINEL feedback versus and and the growth. neoX was as in supported also our the also significantly maintain by WATCHMAN, safety March, with identify, published non-rechargeable Cardiology, recovery, supported SCS ability platform strong Contour heart quarter. IDE trends patient Circulation is FLX XXXX that communication and its XX% growing both expands positive the capabilities. with and in Genus SCS grew our that sales over has its device and patients. our deep Alpha launch during capabilities FAST software PINNACLE enhance Vercise ACURATE by The study Alpha rechargeable brain Bluetooth on by which structural compatibility, FLX organic versus of the manage MRI reticence physician physicians’ delivered X% every driven In ongoing Cognita waned solutions the WATCHMAN WaveWriter In to and stimulation, MRI Interventional

OPTION as center consignment-based last more And pre-COVID push the physician CHAMPION in to we continues target quite per IDE step-up to expansion low-risk end Importantly, the and risk completion accounts of now year. that trial enrollment enroll Europe quarter ACURATE for the our TAVR, categories We’ve and all of study FLX we patients. the versus levels now In week to neoX we’re launch as over ACURATE pleased by do US continue implants we’ve in also indication trial. the completed per expanded trial conversion TAVR the to model and in neoX technology. XX% our, are IDE indication risk planters The announce includes our including seen a the a FLX. to we and converted well adopt

We US and indications continue risk entry approval XXXX. to target for all in market

stent strength Coronary we SENTINEL, grew PCI quarter, continues device on drug-eluting therapies and in Coated complex XXXX the new to trial. PCI enroll patients for cumulatively protection milestone and protected the enrollment for the reached Peripheral ’XX versus versus gain Device. low begin been a of And embolic is launch organic which sales PMA ’XX, target to featured the in-stent cerebral Balloon track milestones that of Interventional several the delivered price digits in single Interventions to study, as at with quarter and carcinoma products treating randomized global Drug to Society by which TheraSphere. recent our for During strong a quarter US versus in late-breaker we’re Radiology. second a the performance TAVR imaging. were and X% its AGENT China, a offset This digits first the continue single and up restenosis. weakness high outcomes in study coronary the is in the are Breakthrough and include AGENT to US complex These Interventional with helped grew and first has hepatic pleased continues quarter designated cellular for share as Oncology important approval achievement for first driven market in XX,XXX positive

our for we led had the were sequentially, was growth growth TheraSphere Performance designation category drug-eluting technologies quarter and our to in brain our arterial, of mid-teens by XXXX strong a also leadership suffering patients study venous strategy granted of from cancer. In an addition, to in form Breakthrough thanks glioblastoma, Device as in aggressive versus EKOS accelerated franchise in drive well helping datasets I’d ongoing important a DES and as this DCB as are these a multiple US offer launch DES sustainability to differentiated effectiveness continuing and safety like the The both in-patient Eluvia two of to therapies. quarter. DCB, the sectors’ proving recovery also and payment on gains. of Ranger highlight accomplishments add-on a us share

on referencing publication and the addendum the sustainable overall, performance its in And optimistic Global our is the guidelines Best first we’re of as in The report as America’s environmental and with list We diversity for of pleased year and and economic, early ever placed Employers Initiative detailed on remain Forbes to global social practices. secondly performance for Reporting XXXX. the our outlook. the eighth committed

strong adjusted to EPS cash business to We commitment while expansion, driving over sustainable continue our and living towards grateful their our enduring organic spirit for X% X% Very employees and winning of flow growth, financial margin turn drive Dan. growth, with I’ll things goals values to practices. to for ex-COVID double-digit

Daniel Brennan

Thanks, Mike.

to Xst, quarter guidance contributed revenue Sales the range revenue $X.XXX growth Pharmaceuticals flat. was Pharmaceuticals X.X% businesses, in of XXXX. quarter Preventice Medicines two businesses, points, of divested Specialty million consists of of growth, above of our a acquisition, XX million billion, Top-line and the drove $X.XX, charges range our XXXX, and exceeding X% the down adjusted below beads closed reported acquired to representing of offset Health of XX.X%, slightly quarter growth $X.XX. versus versus share margin full our X% X% was QX Franchise, X.X% Adjusted earnings XXXX quarter. of gross First revenue versus down organic Specialty $XX a and $X.XX resulting up divestiture operational the growth growth by in Health X% more $XX of Interventional tailwind in consolidated This months X% which basis, first an sales margin Vertiflex. and well guidance from X% businesses. from and was than represents guidance higher one to $XXX XXXX foreign first Preventice, lower March of sales and in our per revenue growth Intrauterine excludes of X.X% exchange. above quarter organic driven of embolic results and XXXX, inventory by BTG Intrauterine which our sales range within XXXX million for growth of as the as On basis month reflects Compared XX% expectations, to

balance manufacturing COVID-driven by margins variances substantially be the end quarter, P&L in second the second the sheet the expected, gross the negative in of enabling should the on the half year. capitalized recognized in As of XXXX higher

quarter above strong slightly operating slightly as XX.X%, below driven expectations, First percentage spend SG&A was and margin sales sales. and by our adjusted a remained as control of historical levels R&D

below to adjusted $XX our expectations. line and million with the other Moving totaled in expense interest line,

for and rate tax X.X% capital as benefit first $XXX XXX point from expected. compensation points the basis activities, accounting, the basis previously free less quarter, tax basis was an cash stock $XXX million expenditures. of operating quarter discrete million quarter with within from items for benefit XXX as adjusted free flow $XX higher the flow well Our million than million on from was includes $XXX a was and cash of Adjusted net

headwinds to remainder receivable goal volumes despite inventory line with adjusted the flow return to normalized accounts as capital increased during XXXX deliver working XXXX. in in more of Our is and free cash we

March we of billion. hand $X cash had of on XXXX, As

Our top priority tuck-in for M&A. remains capital deployment

our opportunities, walk I’ll shares weighted We active outstanding. ended quarter X.XXX full and development business XXXX. capital while capacity with portfolio with consider fully now, And guidance to QX opportunistic second through have repurchase. average the pursue billion for the diluted continuing year and additional We venture share to remain

range to to of Specialty full by year, Franchise XX%, and Health Intrauterine XXX basis the For of XXXX be a growth our revenue XX% offset which we expect of point partially includes from in the net headwind Preventice. approximate Pharmaceuticals, divestiture the operational an acquisition

Excluding the versus to X% in revenue XXXX. be the XXXX expect XX% impact X% and organic range growth XX% of versus acquisitions and to we divestitures, of to

in Pharmaceutical $XX comparison well sales sales the including Vertiflex approximately embolic XXXX, of our from $XX XXXX Franchise, BTG May, and million guidance, of and Pharmaceutical at $XXX to in as March, million and as through through million full million recent XXXX Specialty of acquisitions, Specialty in the year Health sales midpoint as For Medicines exclude sales mid-August beads exclude Preventice as Interventional portfolio of organic sales to Intrauterine prior $XX divestiture. as sales well

acquisition For QX basis net XX% be point which approximate a operational Specialty XX%, from of includes an growth to divestiture headwind partially Pharmaceuticals, by in XXXX, the Preventice. revenue to expect offset we XXX range of the of

divestitures, growth be Excluding of to the of organic impact XXXX. versus versus range in X% we XX% and acquisitions and a X% XXXX XX% revenue to growth expect to

XXXX, Franchise million Health comparison sales sales acquisitions embolic Interventional the For at and sales of and Preventice. to Medicines approximately Intrauterine BTG the beads portfolio Vertiflex, $XXX of $XX in organic million our in and XXXX sales guidance, XXXX of exclude the midpoint exclude from

for strong aim QX be given a QX For while similar improvement, adjusted operating we QX we expect performance. remain to opportunities flexible as and investment we with to margin, sequential

exit adjusted operating a the margin half back us higher level up full average of XXXX to Our setting the than year goal to XXXX. at XX% in is year,

of compensation operational tax discrete and XX% to to expect approximately stock than to forecast QX and XX% year anticipated. due tax approximately the previously continue favorability rate full XXXX be now rate an We more adjusted benefits our tax

program from costs expect include dilution hedging VC adjusted be $XXX below which with line expenses, to year. million portfolio the our interest and associated payments, to continue for the $XXX to We approximately our million

fully for XXXX. for diluted billion weighted X.XXX counts expect average year billion shares share and approximately We full XXXX of X.XXX QX,

as the from the of XXXX low adjusted removed our our end to in to earnings per guidance We have of update high year line range. are with full sales results maintaining previously $X.XX, $X.XX QX and raising share now wider uncertainty our some end guidance

quarter, of detailed a and XX to adjusted the to for Relations Please financial website operational QX, $X.XX. I’ll which second is highlights, that, will to outlines Q&A. EPS the in QX be more our back For XX moderate turn results. expected range $X.XX With Susie, it check who Investor

Susan Lisa

Thanks, minutes XX, the XX Dan. up for open let’s or questions to Andrew, it next so.

one please in please Andrew, related order question to Andrew as ahead. many as limit possible, questions to enable mentioned, one to As us take go and yourself follow-up.

Operator

Thank you.

now Bank first from question-and-answer begin Instructions] will Please comes go ahead. the of Hopkins America. question Bob session. We with The [Operator

Bob Hopkins

you. year. good start good Oh, And morning, and on thank the congrats a to

XXXX But to your I keep think your of you love ask I'd the to numbers over growth X%, QX that you to you the know, the a the And, half the was suggests, in of revenue X% that incremental XXXX in versus question quarter of it half. X% first to on around guidance. lot kind first said to you is, improvement year. growth sales first and X% there's expect just First of My back in organic little quarter is realize same flying question on simple, very full know, I X% here. an basis XXXX, for

in back aware should be the conservatism? Or there that going on that something of? we is half is So simply

Daniel Brennan

look Thanks, anything it mean, probably half. the think believe we the I on there’s impact at the is base the Bob. Good mean, correct. is going morning. the I COVID best year. I’ll appropriate. take in versus way back to don’t guidance you’re eliminate XXXX to think that And I I one. in

was at the of that is, that’s you X.X%. X%, and QX QX, so and look the way look right? You And think I midpoint, at at it

acceleration. So that’s a nice

and look recovery the to about for that continue talk QX. we recovery in Mike heard You

is north and high full of you implies X.X%. X% and QX to you we’re QX. end the both look of then X%, take midpoint X% the of And if the at range that that X% So of year that in

basis midpoint are in our versus higher first it’s the the worth are so comps in from a QX and that’s QX so at also the were QX. points in noting second And XXX comps half, and ’XX we and ’XX where of acceleration X% for would the that X% be nice half

So obviously, X%, of then and X% average were X% average in an back an of half, for X%. the and they

high in of at look you that’s X% you of if X% range X%, our of we and for north the the always So end expectations. talk ex-COVID the that that that say to implies X% that we’re about

So we feel it’s look appropriate. to the X% like, X%, QX at think year also we and as the we to X% X% then full

Bob Hopkins

Great. Super helpful. And from then one perspective? quick if Europe quickly question for wondering really Mike what was seeing on on recovery kind just Japan a and you COVID of geographic question. you’re Mike, I procedure comment just and in a surgical could

Michael Mahoney

performance, Europe, morning, team’s Good versus Sure. grew ’XX. the the in In the lockdowns pleased you’ve some quarter that despite seen. versus and of very X% overall, really X% ’XX That’s Bob. with

markets some The the up been the in in business like UK, So stronger. has business picked Germany. has

countries softer. and Italy bit Spain have Some a been like

product is which positive similar is second really seen better the Japan, but encouraging in that some moves slower as of STABLEPOINT we’ve US. grow to the and supported in And rollout versus team Japan, has expand a Vaccination more Europe primarily get the some given rates anticipate we are But of number impact expect versus nevertheless, at to the choppy, bit the Eluvia, in lockdown on say nevertheless, the COVID quarter, we business the of over the strengthen DCB as the growth launches did vaccine as by markets story. that a X%, and the vaccination given countries, some platform, slightly there, and been and Neurology. year well team So lower improvements ’XX as launches but pace would in in of ’XX. and additional deliver we those do ’XX in in like the did I

US choppiness but the market delivered nice some and well with team strongest growth there. the China the Europe of the was performed in overall, some very So, lockdowns

Bob Hopkins

very you Thank Great. much.

Michael Mahoney

Bob. Thanks,

Operator

The JPMorgan. go comes Robbie from next Marcus Please ahead. question with

Robbie Marcus

really of last wanted - are a here. in learned your we the these I’ll great. I congrats lot know a of two-thirds as strong deferrable add like to quarter a setting ASC on first on hospital my procedures. procedures, touch Oh, something year, lot and the And outside are, I of

So the an come backlog love how get a later a year of through opportunity year about for patients to to into next potential that of and I’d might sizable you’re thinking and sense this be? how

Michael Mahoney

It’s bit which frame difficult a midpoint. try we morning, quarter, acceleration take good quarter, to you our for We obviously with just second quantify. it to the guidance our if Robbie. anticipate of Yes, first

and we Neuromodulation. improvement saw SCS. in bit a in half of most of really saw more but of that saw so And obviously quarter first all - And particularly business. softness businesses overall, then susceptible And the and you improvement quite to most most of through the February, And our of the COVID implies were strengthening the them we susceptible, a the significant sensitive in Urology March.

so, on second in the bulk business that is that the business quite US the and in of in US quarter second half. in clicking we’re bullish And where SCS

XXXX in a Urology, think first you and quarter. be bit than was were that And in numbers than will first - In it Urology the strong quite in the stronger so quite that we it first was saw half quarter. stronger

question a bit So, is think answer to difficult. I your

based With the improvement, on continued the COVID of additional but that. to gave, we anticipate bullishness on guidance it’s difficult momentum we top predict that

Robbie Marcus

patients. guess I the play FLX slides, trial structural here. you had really, and risk in on saw everyone you WATCHMAN strong a it’s to I is after mentioned One, all again it follow-up Two the things out. will how really Got for numbers ACURATE it. neoX heart. that Yeah. tough quick going Maybe imagine now

out you Thanks. outlook heart trial us on give how structural for down thinking and about might any you just protocol here, the help updated could how road? So and XXXX the the you color see playing

Michael Mahoney

had - XX% we’ve Yeah. We script excellent. over conversion is FLX. the about, to we WATCHMAN talked already doing in there,

referring utilization same-center and which of seeing implant community. physician metric, important most the device enthusiasm to and the given the it this the is growing increase, and the cardiologists electrophysiologists acceptance probably profile You’re the from of safety effectiveness and of the

move So WATCHMAN we a us. smart move FLX was think consignment lot of and for a the behind momentum with

Meredith news. good a Dr. comment comment all that’s like. - on neoX the can you’d So maybe trial, ACURATE if IDE bit And little

Ian Meredith

Mike. guess Thanks, the the intermediate now the certainly is low-risk categories, Thanks, risk high, step a the and of of extension patient significant FDA all extension forward. of I to Robbie. extreme, Sure. approval trial trial, this the week

risks of We we But, for to timeline increase to will approval, don’t the to all expect certainly approval the the trial actually patients, patient the have was opportunity. for come number have - the increase change. but that

Michael Mahoney

Robbie. Thanks,

Operator

Larry comes Biegelsen question next with ahead. Please Wells go The from Fargo.

Larry Biegelsen

for Thanks the didn’t questions you here. had with When year-over-year, February still really seem taking great I think declining a weather recovery, morning. on on WATCHMAN. on quarter was it nice all. the results, and like and was congrats QX one the Good one month just reported January I the

must And you seeing in Can interest obviously, you it you for of have a the trends significant are a I seen short but lot talk So March. looks that. have like in follow-up. in and what through about one Apologies question, term the pretty quarter acceleration the April?

Daniel Brennan

December, of bit halves. in a our what a Larry. Yeah, COVID probably Sure, are lot two you’ve globally tale I other heard February it’s looked January pretty from and lot I like sector. can a was then take think that companies impact right? one, A that of consistent of with

strength recovery the So just And vaccination and the anticipation saw we QX think on the recover and I what half to half. and in going includes volume. of guidance heard that line with recovery both from the I’m April. I comment second would that, of largely you beyond increased then continue what second weaker, our some first continued said probably some think March expect. not the so overall half into weather, the procedure rates Mike to the was then others into in get specifics you have But

So what think that’s that. I we’ll on say

Larry Biegelsen

That’s very XX% And QX. over on growth here acceleration helpful. WATCHMAN, in to then nice about XX% XX%,

metrics, kind wanted take Just to consensus the of opportunity on on the high Any thoughts the looking about to you guys be XX% if things, for an WATCHMAN is, to of, question XXXX Two type you US. still my comment, one, new share ahead, in Thank you willing can street’s, competition question. comment you’re would and helpful. new them for give is just to grow the taking with in level competition? those

Michael Mahoney

Sure.

It that I’ve XXXX, grow is future. utilization’s We’ve a robust acceptance the device. business. of lot are has the FLX in will of the and we also process a have a a as lot for WATCHMAN got number of And also of clinical in momentum growing. expectation WATCHMAN in now, that pipeline mentioned, Our trials

it’d is cardiologist, behind early. FLX. GI outcomes it’s The the there from expand. WATCHMAN just physicians, the you whether their come doctors, therapies, continues referring to great to neurologists for So seeing so Also for They’re awareness be more know, patients. as

a think dollar I level grow acceptance So in the market market the WATCHMAN to continues it’s and - multi-billion opportunity the of future.

and And think driving positive these continue more to so grow healthy very, will outcomes we are momentum. very the market more and

So our to is certainly expectation in grow XXXX.

Larry Biegelsen

Thank you, Mike.

Operator

with comes ISI. The ahead. go Kumar Please next from Vijay question Evercore

Vijay Kumar

Hey, on guys. nice Mike, sprint Congrats on maybe, cardio. the one here.

context offset, the some of S-ICD LUX noise the coming to around share recall, I commentary of your more enough better, headwinds? the slightly perhaps ICM positives some think and guess, in CRM gains there’s EP in are but than I been around

Michael Mahoney

Thank Stein minute. you. comment on in little bit a will Dr. a S-ICD

I captured portfolio think the here. full you picture really

we stabilized, in more penetration common leadless approaching chamber. - that We see loss. market quarter-over-quarter loss, it’s been bit very in ’XX, we share And versus a say, lost we I bit we single And - did the is think minimal so reduced to quarter. it’s of little full the And the of that although CRM of sequential as terms typically think would growth the in share a may has pacemaker it’s where softness - in share. have segment little

we there, would rebound element’s So in softness that and declining and say it. on of Stein a can beginning little bit defib share had comment lost but I S-ICD is that although the to business we with Dr. actions,

’XX. of full some approvals. diagnostic don’t And Importantly, and with quite ’XX in and where business EP as softer you acceptance portfolio said, have product will and for these was LUX tailwind a Preventice strong nice our Europe, we of the US, us our in LUX the in be

So And Europe offset of net-net, will U.S. will Japan some the the the some and in help in offset as you EP, CRM. softness particular, said, business diagnostics in of

Stein if want and to additive beneficial you on not certainly maybe, Stein, are those Dr. available. S-ICD. to the CRM Dr. And is growth So profile. like looks comment It

Kenneth Stein

No.

EMPOWER said, particular best Yeah, that advisories. penetrated that, the S provide that good concert as his which least help off pacemaker a resolve softer to development an thereby concerns. in did do trial beginning overall any S-ICD it. physicians at fully leadless of unique is excited, to is quarter to Vijay, lead on all of preserving as come Mike leads to the a the and me system pacing designed the the procedure very lead complications, with to with risk I market. capability sorry. Mike in the it’s prepared have should need infection, who mute, we thanks, trial, in We and and performance Mike. of And transient said S-ICD said bradycardia Having is S-ICD of our And in Let remarks, the the reliably And as patients of related benefits that the work the an the recover. while enhanced reduced residual have S-ICD of we terms to the bringing expect to in S-ICD reduced message that anti-tachycardia think pacing

Vijay Kumar

one guidance Dan, question then And helpful. That’s you. quick for

what revenues step-up was million be half? impact should step-up what EPS that back you. a correct? of the and any sense updated the we expecting And the hundred gross some think accretion. EPS think I one, in margin I remind - on just half second QX Thank of manufacturing couple us, guidance include not variances Lumenis, does in from were - and

Daniel Brennan

Sure.

closed. Lumenis not excluded guidance, has So the is acquisition from that

individual of margin and of higher by some lower of the up, QX, correct some way specific are sales gross to and to inventory excluded. in line of ended margin But the you think our the margin one was with the businesses as of wanted has all at we we operating margins gross obviously we components impacted best that’s SG&A charges approaching the most neuromod, be that And margin, I the of bottom - XX% at COVID. and So of slightly and in because gross R&D. that said, short businesses. Obviously, look you

happens you as start approaching that back dissipate. improvement, the to not going So half, that should into to half in And to the to we that year to margins, back perspective, have partially margin better half. than and because COVID lower things we we from five half QX, happens you the get last half, COVID confident what But of margin see years, than if where XXXX the have inefficiencies because in also that’s into revaluation second first second get get but some normally always the the are back go over we first a first as that are always we’re gross a is the then levels inventory the we’ll half. should specific And second four, look XX%. of the gross XX.X%, the

continue. So we believe that trend will

year of and margin back overall gets full which So think averaging commentary to the up approaching if XXXX should back to is levels, in than XXXX, well ’XX get half for better that then us the second line want in you operating the quarter to that of we adjusted and with second in says the overall that beyond. set which and half XX% XX% back

Vijay Kumar

thanks, guys. helpful, That’s

Daniel Brennan

Sure. Thanks, Vijay.

Operator

comes Krum next ahead. Truist with go The Securities. Kaila question Please from

Kaila Krum

Hi, guys. Thanks for taking our questions.

if going love all Preventice integration just a at reimbursement the weeks business has ECG updates few in extended-wear given and would the just strategy So, back. how or your with is that hear the changed first, markets to how

to that to, be categories or would all be any patients helpful. will super still to be curious, you thoughts of Just do plan and on you able service

Michael Mahoney

just March with team in week on last met with closed, XX, Minnesota. the Sure. Yeah, we’re I quite pleased guess, that. That right? I And

well on that the we’re performed and going quite business business in first quite bullish the forward. quarter So,

strategy differentiated, business diagnostic You’ve have that company we’re ICDs. the only that we the And ones of they range the Preventice the heard can and within before. different full ICM offer our with HeartLogic the four we’re combine in We think portfolio. modalities, that

the diagnostic same within modalities So a the of beauty physicians tools suite we that they provides the differentiated are of platform to think device. Preventice diagnostic for different able between is toggle and

quite And so have can sophisticated that all be they remotely. algorithms done

as maybe some in in reimbursements, the on platform, parts of Holter this pressure, continue And the maybe of inherent due business so to of extended into the although reimbursement patients or the grow other to we’re different modalities, able you and the that need flexibility mentioned, there modulate what circumstance. is the patient depending terms to

doing lot portfolio. flexibility Recorder, together it So quite strong our I a of tie LUX think gives with and you is that us which a capability well, provides it Loop us

and we’re for So year. the on the of very excited bullish business the rest

Kaila Krum

about you. with Preventice of the And Lumenis and mean, locked M&A in Great. I just going forward? just, this expected appetite for then we year, close to second Thank how part in should think

Daniel Brennan

closed, Well, billion priority the Really of Lumenis Preventice have quality, high tuck-in balance the sheet growth the our number year. Lumenis is, high this and said, pleased Preventice Obviously, $X with acquisitions. I having remains one we good and news as M&A. cash closing today on later hopefully

And have XXXX. or two in do could and feels of to maybe those in one place that. more that the sheet we appetite we continue the balance to done we that So here get have acquisitions like tuck-in

Kaila Krum

you. thank Great,

Daniel Brennan

Sure.

Operator

Please comes with ahead. go Stanley. question from next Morgan The Furlong Cecilia

Cecilia Furlong

Thanks for today. with to I taking just business, as of portfolio off guess early POLARx you’re start Europe, your EP well what I our of wanted as question. around days seeing comments POLARx, the really adoption overall in but performance

Michael Mahoney

Dr. one, heard on Stein, it, take you that POLARx if in want Europe? to you

Kenneth Stein

one. am I happy Yeah, to take that

new is interesting the of quite pandemic, IDE trial use in there with been POLARx few called results our very generation of competitive think in the FROZEN-AF. We date. It’s I first with track likewise are now with out we’re are and right ease very States, commercial we’re physicians Again, we’re using pleased that versus but on clinical there. that’s it’s everything pleased safety a Europe with the the and system that a launching cryo really efficacy become the it to pleased this product Europe. has United of advantages seeing into a in with to clear uptake spite which in COVID, And

Cecilia Furlong

you’ve update ask past. you’ve with also on TAVR and could protected any then structural in market? if and from you. Millipede Thank just on EFS And heart, the the SENTINEL you. I removal talked the Great. And Thank post-LOTUS seen what about just

Michael Mahoney

this question? take SENTINEL want you Meredith, Dr. to

Ian Meredith

Yeah, thanks SENTINEL continues for to Thanks, Yeah. the well. question. Mike. do

trial protected We worldwide. accounts and well you know, The accounts as over trial in definitive COVID, more are operating TAVR - recruiting against X,XXX patient despite care. XXX randomized standard very is a than of XXX that’s

that cerebral results evidence provide the of So care protection. in trial we embolic for feel use of that good long-term standard should for

So the trial is at recruiting well present. very

Michael Mahoney

feasibility There early was a question trial. on the Millipede

Ian Meredith

Yes.

- recruiting, the received to - US. the you. The currently trying early We five approval study. for study that have feasibility feasibility appropriate the So EFS Millipede patients screening We to for underway. FDA sites and is Millipede study thank identify for early

patients first recruited months. expect over of we in this to the the couple half So of next have year

Cecilia Furlong

Great. Thank you.

Operator

question next ahead. with The from Rick Stifel. go Please Wise comes

Rick Wise

strong. thinking US, at Good markets then clearly the do it offering your the recovery the year? half how Asia-Pac, growth, - morning, not Mike. a regions, One When picture question what Good and morning, or or Dan. big about about obviously up thoughts in there? in Second surprising, now? look laggard, question. I product shocking regions? a you are Any the takes EMEA, emerging guidance how thinking those but it recovery incremental organic you that’s are And you

Michael Mahoney

say, would a other insights maybe I just there. of couple Yeah,

Africa well years. business, North scale quarter. terms past up and which did Our not to the business capabilities, prioritized business, you’re few we enough of in invested that quite the that team, really been historically Eric East And actually Middle seeing and that begin in first in had Thepaut the

North from as in throughout Mid-East business, do improvement European more softer business in business, expect that we momentum the of broadly in January, general But had Dan continued that ’XX. expect mentioned, region. So we more It Africa February.

rates know, those have others and Italy countries year. Some as normalized some, but -not lockdown. normalized on and vaccine normal we you strengthening more But more on anticipate are regions been quite the do based throughout more

I’m overall, So quite bullish.

put in we’ve at despite of versus up our businesses of they did taking throughout peers and most the anticipate positive look improving in well business and terms quarter do done European the growth ’XX. you that lockdowns, we If that our that quite share in

Rick Wise

I of you nine of product they they or momentum words EXALT-D you help we think Mike, also gastroenterologists, data. understand more. March, us the questions mentioned on that interest, - were, - technological Great. end the early lack a indicated little clinical all strong And their about gradually highlighted XX had is, there to improving. Maybe can spoke your At first-gen limitations, reimbursements, understandable but that lack front, the

those about concerns? How Just addressing Thanks we here with how think should much. so from and are you EXALT-D? them where

Michael Mahoney

Yeah.

long-term a is us. for investment this So

off similar with SpyGlass started you if commentary, EXALT-D had it and I added four ago, had LithoVue know, you As three, to and that years commentary some recall. similar

time. to time the And so segment. really all out with enhancements chunking We’ve of we’re EXALT-D. making kind benefit we we’re over And this these and results committed quite the seen just expect LithoVue similar of and SpyGlass and

night, seen reimbursement the just early There’s You’ve news on will the help published the it - with this in-patient that in think morning, some reimbursement happened for yesterday outpatient recently, or which EXALT-D improved last NTAP center. I just the was in setting. just been

GPT with EXALT-D And seeing which news. is stronger the you’re for a the on now the device reimbursement XXX(NYSE:K) NTAP, improved and device. capabilities exciting in So general the itself, it’s

that, platform too. Spy so make the enhancements like will to and done that And we’ve to with continue team with LithoVue

are impacted of some in uptake earlier. XXXX. and the more now in product is you’re that the stronger so we capital see in by some piece, you we other And there, to the some So the you’ll had March seeing additional improvement seeing enhancements of second COVID mentioned, we’re as and placing half

we’re And will ’XX. subsiding to a be than not It’s a the throughout of going dynamics growth bullish the steady this on - certainly steady time, stick. and COVID so improved it. rather cadence business hockey improvement expect this a of reimbursement, a But help we and over

Rick Wise

so That’s much. thanks great,

Operator

Mr. The question open. go Credit with Suisse. ahead. is Please line comes Matt your Miksic, from next Miksic

Michael Mahoney

mute. on might be He

Susan Lisa

please. question, Next

Operator

with That go will We’ll go question. to come Thank Josh the Please ahead. from you. Cowen. next Jennings

Josh Jennings

question. a I for had the follow-up Good questions. morning. Thanks taking on the Millipede

opportunity. an or be Just Mike update Dr. if to on Meredith of wanted just transcatheter mitral the views willing would us give your see to

on believe then Just then is or in - here, space? you dollar place and we there investments may multi-billion space [ph]? from get Day? any programs internal what in September Millipede the a the process strategy updates more other market, to hear And do involved the are the any strategy in transcatheter development mitral just, it’s And opportunity? Investor But here mitral

Ian Meredith

for the much very thanks Okay, question.

and regurgitation, a three [ph] and increasing opportunity, stenosis. regurgitation mitral driver of is disease, with being population global heart valve at a more this dollar heart prevalent huge IOX First, it’s particularly to aging mitral failure the burden And times mitral failure a an and multi-billion opportunity. least than indeed

and the to the this The opportunity. very really significant different. the is structure. aortic I and well a point valve, valve a you think tomography The global valve So complex are as mitral mitral prevalence being know,

to disease. So serve mitral there is device treat no one single will that valve actually

As is different. the we completely the often say, The the between the only similarity rest and word valve aortic is mitral valve.

So order approach, in treat mitral requires to toolbox that. a you like, if

is permissive mitral the is most regurgitation, tailor though, particularly venous for foundation that whatever the have transseptal solution why a the is on This and allows - device. an mitral technology appropriate valve disease. focused trans we important you annuloplasty for device strategy functional in So to module the disease, annuloplasty that’s foundation, needed a add other to treating valve mitral

valve toolbox is on the to as condition in strategy order we a planet. the largest trade out approach can have thoughtful the to we how So effectively build what single

Susan Lisa

question, final One please.

Operator

you. from ahead. with Leerink. Danielle that go Please come Thank And Antalffy SVB will

Danielle Antalffy

COVID, question. of so your I question I suspect the start of of were about they the with across than everyone. so with a as putting changed Hey, a to it has sort be Thanks to year. customers, you and of the productivity. or I’d heard competitive competitive relates portfolio trends lot their much. Boston’s taking shifting to Mike, at the it’s if talk position R&D competitors all? relationships hospital how breadth a purchasing about with on pre-COVID. it’s them have just stronger good hear large that in level for you’ve stronger changed think morning, do Congrats has strong much curious high and And sort some Thanks really COVID of some positioning to one around,

Michael Mahoney

of script, years commented portfolio was but about I’ve most them, grown Sure. six of and than not of our had Pre-COVID, all them most COVID. by for we the obviously to eight peers, our in faster hit

internal we our share that and it above segments, waning, left back of by gained really from group’s in we’ll now this - of most pipeline - - Supported that many but anticipate our So many the proctoring we’ve to been in it’s markets nice is XXXX capabilities on And our we our of to launch beefed quarter, strong benefit positions peer pipeline from future companies, of efficiencies can team growth. gained get our quite a segments, over not is our to have and in thing, training launches beyond our we share many That’s everyone, other over COVID, we and the there. did which like ’XX digital XX months. in which training strong. that job, from the and really a physician past everything we up

we’re - us months, also the So in you’ve moving to - all past faster markets than they’re supported into, peers our growing. things pipeline, faster the significant we’ve our the digital which And made XX investment seen over by expectation besides continuing will that grow well. pretty serve - ongoing adjacent the

results supported Y-XX very and You acquisitions consistent and the of overall. BTG results there with Preventice in recently out Lumenis. saw great And the TheraSphere new they’re now acquisition and

business, quite peer and we will and businesses, our continue growth into Middle the expand North faster every are to capabilities group Africa. the expand faster China and share and and markets but also business, core grow our East in not single So, we majority gain faster confident, of our than

Danielle Antalffy

Thank you.

Operator

session. question-and-answer over Susan for Lisa to This any concludes our like I’d turn conference remarks. closing back the to

Susan Lisa

for us for the interest appreciate Andrew. the replay. you before disconnect, can Thanks, all pertinent Thanks Andrew today. joining everyone and you your much details give very We

Operator

access using available until for Please Time. XXXX Eastern conference X, PM dialing concluded. X-XXX-XXX-XXXX you in The note, recording XX:XX has by will at today's now either hour or one Thank presentation. code May attending be XXXXXXXX X-XXX-XXX-XXXX a

may now You disconnect.

Boston Scientific (BSX) 28 Apr 212021 Q1 Earnings call transcript