BSX - Earnings call transcript Q2 2022 | Boston Scientific Corporation

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Operator

Good morning, and welcome to the Boston Scientific Second Quarter 2022 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead.

Lauren Tengler

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

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

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

majority in X, is M.I. August excludes of closed which half Surgical Pharmaceuticals, Before excludes we include acquisitions foreign which recently expected March, Specialty XXXX. and impact XXXX, organic of XXXX. comparable the as second are which like acquisitions for begin, or Divestitures March fluctuation Relevant that further excluded of which purchase Tech, currency Lumina the to agreement on growth organic closed less to the the in and growth closed XXXX. revenue of Medical, a of Guidance and on call, close operational FARAPULSE the announced divestitures remind full which period on as XX, excludes everyone the I'd for than revenue the there to stake and respectively; net well sales. September February Preventice, Baylis BTG

trials, laws found like be which securities otherwise impact the only we flow financial in may Factors acquisitions, that launches, These the speak intention the our this differences them. are statements Relations On similar COVID-XX and opportunities, performance, and our anticipate, specified, our XX-K point, to anticipated comments. and on clinical estimate this operating other and At and organic. website. XX-Qs among I'll and highlights references include contains words For federal of call, unless may results; any They please Risk those as other other believe, such share, of financial earnings; and call to filed cause with refer revenue, cash cost information, and R&D including statements of words. and all and of section forward-looking date, savings market sales obligation it identified the SEC. our meaning tax Factors expected use; margins or growth Mike financial and company's This more expenses. our disclaim as our deck, Investor include, approvals for pandemic today's new growth and spend over the which most to rates, described subsequent within may his expect, things, well our recent as statements operations update be turn by to may, product and upon about sales

Mike Mahoney

full XXXX. prior quarter grew strategic 'XX X% organic XX% grew In company X% innovative our organic and very total for everyone with a the pleased year, year, Lauren, We're versus by supported operational second growth M&A. sales portfolio, our the 'XX, Thanks, despite commercial clinical execution, and joining second of today. tuck-in strong versus while outlook you second and to strong thank us sales quarter performance our comp evidence for quarter in

X% to high results sales of the of our end Our guidance range exceeded X%.

in most peers Importantly, than we faster businesses of continue and regions. our our to grow

Second quarter the grew range of prior to $X.XX. X.X% versus exceeding of EPS again, adjusted guidance $X.XX $X.XX year,

line the anticipate waves. through is challenges operating continue which adjusted as with expectations. XX.X%, to the We remainder of year was COVID more staffing quarter procedural hospitals in durable margin manage Second in growth and for consistent

first half we to X% therefore, the performance to Our organic XX.X%, and for are and revenue our anticipate was year we growth from XX.X% half, 'XX to guidance X%. to second and X.X%, plus in accelerate increasing growth full growth operational

of 'XX X% to For operating XXXX. operational growth We to aim organic and of guiding we're to third improve to margins revenue, quarter in XX% XX% XX%. growth

XX.X% a margin the of supply operating the pressure. with of ongoing challenges, operating as XX% chain-related full volatility impact to for year chain additional margin FX However, to result updating our adjusted supply are we and

to We are $X.XX $X.XX. narrowing year to guidance adjusted 'XX EPS our full

and outlook. operational measures related We're we third grew business. provide versus some in with across and In electrophysiology, the performance versus public $X.XX, additional Middle impact highlights sales 'XX excellent operational Japan, of EPS year. the grew the the is in products adjusted region X Regionally, transient within details East, are notable estimate year, $X.XX primarily in the an growth. emerging EMEA interventional Our both along pleased impact of with versus our with business dye XX% broad-based operationally Asia, strength the will now to ASEAN with Europe, growth therapies. basis the China, with the had countries. Dan therapies, coronary in on our provide on on and and WATCHMAN of portfolio In COVID our Key the within and more quarter X% a and EPS the region outlook. India 'XX region despite performance markets and sales of WATCHMAN included prior overall prior the cardiology U.S. particular performance health double-digit units Africa, We XX% quite driving of posting year. X growth these and across I'll comments PI growth prior our from shortage quarter delivered contrast quarter impacting business in

China, of growth driven in cases prior to 'XX, Ureteral well supported team's operationally Stent SpaceOAR and Urology business of with recent We to growing the basis countries in all in grew ability for Globalization environment, diversified the growth in quarter. performing Tria in confident countries drive and markets X year, and year in vast tough on operational executed and units double-digit team organic the the a with make focus Korea, portfolio products LithoVue commercial very China commenced Malaysia. with The new with continue versus in and our line to WATCHMAN and progress sales Singapore by such Public first XX% majority be X% momentum XX% an grew in the grew XX% as full We Firm prior expectations. new double a versus America Health continues by our China. and digits year. the ongoing and Latin key execution. with within the approval launches remain emerging product and continuing X% FLX

We continue global. be to integration and the the Lumines pleased execution with of

business Turning like transduodenal perform innovative to with Endoscopy, sales a our AXIOS grew indicated products this X% stent for stent, organically continues versus access. to Broadly, and prior well diverse year. transgastric

STIMVIEW In against grew Neuromodulation, developed partnership purchase offerings close In which is for the utilization. pain, Genus accounts and MI revenue sequentially expanding second of WaveWriter 'XX. organic solutions. sales procedural year-over-year the with fast comp XT, operational see very our year U.S. U.S. expected grew Vercise the grew to second launches of prior recovery integrated and metal In excited of stents. robust of with versus versus sequentially X% for XXXX. This Alpha with Neural quarter in COVID Cardiology X% half therapy including in prior declined X% challenging portfolio a with Cardiology, and is along portfolio, in SCS, organic agreement Alpha, franchise novel announced year programming also WaveWriter sales imaging of new our sales Interventional with We launch arose with also the includes a EXALT-D about cardiology, to grew to software conformable prior In strength the performance year. in Cognito Within Brainlab. our agreement our single-use and Tech, sales optimization versus further we the a innovative second family which To broaden with quarter of brain, practice technology, XX%. to driving Navigator in an Therapies in physicians and self-expanding imaging platform and improved stake a majority continue organic suite

rates continues, excellent disease. device neoX, therapies franchise system complex guidance of enhancements the digits, II mid-single further led XXX into driven demonstrated launch Physician hemodynamics AVVIGO by moved comprehensive neoX for in clinical Italian growth registry our which in success low as Our business validates patients. high the enthusiasm by treating the grew parent of that coronary rate neo data for than more Imaging PVL, U.S. supported double-digit by and ACURATE our in portfolio coronary within differentiated including growth PPI, imaging, full continues, and reduced ongoing our for innovative strong Internationally,

in Turning evidence prior with year. the will of sales in market and continue DAPT aspirin X% the device. and our NCDR more to In the accelerated low-voltage This low with a was in penetration coming region with U.S. and on uses high-voltage highlighted events rates on days at no of confident digits in or Flex with anticipate full implant. grew warfarin growing in at And sequentially DAPT than awareness digits. aspirin. launch share be comp-adjusted our organic real-world FDA versus market months. Rhythm basis that FLX WATCHMAN, difference we a major the hospital our the In CRM, post recently were Management, the to as business grew business growing single second-generation organic approved drive core ongoing based DOAC remain with Whether our patients submission with in strength Growth registry. gains with data the across and our Japan, with year. XX increased prior significant mid-single versus sales Europe or DAPT, growth XX,XXX XX% on from discharged patients clinical of discussions and We our we above that demonstrated ongoing was the

by well, Our to death S-ICD EMBLEM ATLAS superiority and positive trial to transvenous presented and supported sudden serious from demonstrated from ICD similar protection investigator-sponsored single-chamber at devices X year. perform months. trial S-ICD data HRS The this ATLAS complications the continues franchise at compared further lead-related earlier from

organic well X% and by an driven operational business Preventice market, year. an the on LUX-Dx. versus basis sales XX% continues implantable Electrophysiology, cardiac In grew and on to Diagnostics perform our basis outpacing the prior Our portfolio

VersaCross of very in platforms FARAPULSE strong Europe, XXXX and U.S. in catheter in account integration force-sensing forward enthusiasm our in track, execute the portfolio continues STABLEPOINT Physician and Japan. in increasing to of performance to led We're and FLX expand trial, and enrollment have trial on completed sales we're by led efficient important LAAC differentiation and VersaCross Second left quarter X% the grew Baylis launched NEwTON AF team to Peripheral the access both and Europe to Baylis-developed year. is have we're excited half by Connect prior well in second The POLARx provide for and our System. XXXX. side to the openings solution the U.S. quarter strong implants. to and of in Interventions, our strength FARAPULSE the was offering the is versus organic in RF more In with performance this heart the steps for our WATCHMAN to safe both pleased The year. in ADVENT looking Access

tools support through a offset a in largely And patients Outside malignancies province clinical we with clot therapies, of treatment impacted the we the commenced quarter, in with robust treatment offer. notably, their first of both as double Globalization our we longer-term China of the medical commitment and positions competition, scorecard, annual contrast have and U.S. our which double-digit fueled Ranger by set markets. share global issued and franchise, TheraSphere transient Mandarin low with is as Eluvia in highlight our metrics market company-wide hepatic province, of offering. ICEfx, strong by toward key as include progress in as growth drug-eluting shortage pilot well we significant quarter in company's In of solidify the report, part opportunity Varithena key report Venous, program. the to digits space. quarter, our as to this our bonus this the against was portfolio capital we quarter performance innovative our had and the the and by Earlier showcases efforts which management Hainan by responsibility corporate goals In trial. well TheraSphere is embolization tracks continue delivery of human annual China to access our impact the sales goals. in plan. arterial restricted remains we the Hainan of cancer another the performance in Within the as business very innovative strength Interventional in in of Oncology grew expand TheraSphere that the

report You very outlook first face. pleased and Relations 'XX We're despite this results time macroeconomic can access Investor any websites. continue the through to and we our our the at for beyond with half challenges

innovative to to more positions portfolio, at commitment this September. hosting category ongoing they're and event Our forward leadership details as clinical commercial TCT the today We'll us and strategy, execution look well future. investor provide We into an available. evidence

our review While winning performance I I grateful strong will the free financial markets, spirit. things EPS now more remain expansion, be environment cash faster continues flow. sales than in adjusted to growth challenging, for employees detail. our to goals, macroeconomic their and turn over to very grow financial Dan underlying committed to operating long-term continuing remain to to double-digit we margin our adjusted

Dan Brennan

Mike. Thanks,

of versus headwind than second Second XXXX reflects revenue quarter strengthened million reported from higher the consolidated X.X% and growth to due represents $XXX foreign U.S. our revenue exchange, expectations $X.XXX dollar. quarter a billion

end XX.X%, Excluding basis acquisitions FARAPULSE, X% of headwind this guidance results gross XXX exceeding XXX line second XXXX $X.XX, range X.X% $X.XX. to in QX Lumenis revenue adjusted and growth per with of guidance contributed resulting basis and was the in the our the points, foreign of growth line expectations. quarter growth from $X.XX share end our high the was our in versus versus X.X% organic operational from quarter. high revenue range Strong sales of of Quarterly drove growth, for primarily representing exceeding exchange, Adjusted the X% XXXX. Baylis to point margin top of earnings X.X%

we the half due direct manufacturing inflationary in to headwinds million materials, cost some resulting do inefficiencies versus seen procure of direct freight, labor total we've driven them. costs, is the incremental and freight the $XX XXXX Although anticipate well slight as stabilization to versus slightly gross We to gross full adjusted brings pressures approximately adjusted historical second $XX manufacturing plants second in standard improvement million pre-COVID our U.S. tailwind as the of headwind in from of anticipate well material in gross cost from of full second to cost primarily availability incremental expect million. and We due realization level by the this as of the to to our materials improvements $XXX This consistent headwind now Recall half of plants margin with margin a our below year FX due stronger adjusted be dollar. margin to trends, availability. the half an inefficiencies the XX.X%. XXXX as on

adjusted margin XX.X%. XX.X%, half resulting a in adjusted first quarter margin of operating was operating Second

On operating XXXX XX% to a we're half to full on Despite second our margin As the to of a of margin IP pressures XX improvement increased to macroeconomic related margin, of versus expansion. second of points quarter range year a the gross operating operating basis adjusted ongoing was on result now our including margin anticipate with be within we headwinds, macroeconomic GAAP to average charge a litigation. margin these XX%, XX.X%. range XX XX.X% representing basis, focused

the interest from below and other onetime quarter, currencies. totaled our driven to in certain in adjusted expense part than $XX Moving million gain the by expectations lower FX a unhedged line,

the benefit basis, quarter was from and discrete items accounting. tax Our the second compensation tax XX.X% adjusted on including rate an for stock

expenditures. was in less the with with average million these our million fully rate and $XXX tax operating with cash Adjusted outstanding. cash Excluding million $XXX million, from free XX.X% quarter We net activities, weighted ended items, line free for capital operational billion was flow $XXX diluted $XXX X,XXX QX shares expectations. flow our

free be aim XXXX free we year to flow, at above to billion. cash flow cash or continue of $X.X full adjusted adjusted XXXX For

hand. As hand of cash we second to of $XXX on M.I. XXXX, with in purchase June and the of the expect on XX, funded stake majority to million, of half we cash of XXXX close had continue Tech the

priority tuck-in goals. we'll top assess in opportunities conjunction with to Our our M&A, capital remains for high-quality and financial continue allocation

X.Xx. to walk XXXX. June now guidance and expect as leverage full of year-end for I'll the was for XX, continue through XXXX. of our by We leverage year X.Xx And QX

and operational We which exchange be than from a XXXX. XXX XXXX, Lumenis previous sales the a of rates, basis points and current headwind FARAPULSE, from specialty $XX Preventice, XXX expectations year XX.X% range on full basis higher pharmaceutical foreign includes our growth to point XXXX excludes point basis in revenue to versus contribution in an approximate expect acquisitions XX.X% based and XXX of Baylis million predivestiture of

year consistent full growth X% XXXX, As closed in to a QX the and revenue impact versus confidence range organic of growth, our acquisitions performance strong excluding raising procedural result and X% and XXXX of are we durable to our divestitures.

quarter based revenue and to which XX% approximate point includes range from excludes and XXX rates, We operational to contribution Lumenis Baylis. acquisitions XXX an a on basis be expect XXXX the in point of growth XXXX, XX% third headwind FARAPULSE, from versus of a basis exchange current foreign

third of we XX%. the recognized FX our be range growth quarter QX. expect XXXX below-the-line Excluding closed the $XXX in expect organic a revenue XXXX to year in impact adjusted expenses reflecting full acquisitions, X% We gain now be to million, approximately of to

stock XXXX the operational the the approximately compensation first We tax XX%, the continue XX% tax with benefit rate half and discrete including to to our of recognized an tax full be adjusted rate accounting year. expect of items year standard of in for

tax on the reminder, current of As legislation, a provision rate expenditures. a reflects treatment our R&D including

operational benefit. XX% legislation this tax expect of to revert in we bipartisan earnings year believe to to to resulting provision, such range XX% its is reverse adjusted, be there per a enacted, historic and share would approximately support $X.XX rate full to We our continue and were if

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

and range be continued detailed our a XXXX quarter macroeconomic to a QX $X.XX and As result financial expect within environment which In as of for $X.XX; highlights, for narrowing outlines I and FX well share to more per Investor to to $X.XX. QX range we website check full in closing, Relations are am year our of uncertainty Please operational results. $X.XX as the third earnings adjusted volatility, we organic the the a achieved projected we results remain basis of XXX our momentum margin focused second points expect midpoint. on with back expansion, turn Lauren, macroeconomic And of the supporting proud in operating first the see Despite year. Q&A. at that, will I'll it with half to of the this improvement half second revenue environment, to guidance increase sequential half who moderate challenging

Lauren Tengler

Thanks, up to so. or it minutes XX Dan. next go [Operator Andrew, let's please for Instructions] Andrew, ahead. questions open the

Operator

first with [Operator Joanne Instructions] Wuensch The question Citi. comes from

Joanne Wuensch

happening which I May say to and on because organic. to of want to X% maybe, your for and bit looking time to your in as X%, be first X.X%, congratulations. growth raised organic entered now your the were that's core sort to actually rate X.X% franchises, when on X% trend little just helping you year, particular I organic businesses was a to the buck we of X% call What or raising you quarter the the each in growth spend quarter? is rate

Mike Mahoney

as well. can Dan Joanne, supplement

half and growth I the investments of Europe in up we're growth outsized in mature region made we're just over saw the scale tremendous -- last few would GEM us as his very grew job Just that's and for building significant in Dan driving in market really our the in mature script environment. given XXXX. with a taking team of with in strength each well we Europe, as we've our China the impact double quite tough by has global and to the seen more a in team execution pretty Asia nice region. offering the there U.S., In years, did, a digits, Japan, and EDP done the as share We and of just had we've a second team. And overall, is acquisitions the pleased WATCHMAN. mentioned I you did year benefit In you'll continue do rebound Pac, really portfolio organic, a see our that which a in cryo as the the have the delivering going well we of really led markets. nice of as at those And in bit also well. job POLARx,

executed we in share as has We team faster-growth in ourselves to the script. into we've gained quarter-over-quarter. quite markets businesses, think try And of I to consistently most So said I well. the think continue position all our

very So strong I clinical it's The think portfolio. evidence execution. driving and we're commercial

Operator

from Next Marcus question JPMorgan. Robbie comes of

Robert Marcus

congratulations headwinds pressures the impressive wondering, generate on I quarter. like about points which but basis add flat given headwinds. absorbing track on versus to was you're XXXX good XXX I'll it my really a of Maybe all Dan, operating margins, is sounds focused offsets pressures. if just the we base from where there's seeing XXXX you're into those anything And it of carries you're walk through the or and on in offsetting then should that models how these some business. in over be

Dan Brennan

Maybe numbers. a helpful give finer on couple points the to just of

operating XXXX, in margin. we margin. XX.X% were XX.X% We So adjusted were gross

the midpoint you XXXX. just bottom operating you at margin, as look the if million guidance headwind, hits in which XXXX the $XXX we're in back XX.X%. is majority said, And So of absorbing the our line of that at

'XX, of Some of will question that, go that your to to XXXX.

the But margin. hit -- the standpoint, majority and in be from of some a 'XX. that hits balance on margin will still gross in XXXX there's XXX sheet will So gross that

looking in at last activities value standard favorable in it's all other So when of the leverage R&D you and product pricing years, line had cost items the place at we've mix, X-plus offset thoughtful improvement a a over and P&L, whether to way. SG&A bit programs, opportunities look of smart discipline, the P&L, that to a

has And whole through so the entire offset the XXX been P&L.

about bit talked half year's than last a XX.X%. that of second average We lower. lower is margin gross being Obviously, margin. gross see You little

offset like XXX offset very in right, rest we P&L of for, So is to -- not gross that's the even we're We but what areas margin, royalties. R&D, to it's haven't able the focused whether that. the been were full SG&A,

XX.X% are and what a specific clear that to guidance this in for get see don't the to relative 'XX, some little beyond. but to see. and early macroeconomic at been We've against we there. to I'm forward year 'XX hopeful beyond and see look that we about midpoint that obviously, look XXXX we'll we A 'XX, So 'XX pleased headwinds very abating relief for

Operator

Wells The with next question comes Fargo. from Larry Biegelsen

Larry Biegelsen

quarter. having that a you analyst at you I nice heard are an mention on Congrats meeting TCT.

you confidence, are and what can Devoro, example, see overcome BTK armamentarium? present there, to looking the on So any And expecting into if SAVAL And your data? launch data so, just we that of previous there any you significant for devices? on if how kind color and the should the for be the you issues treatment of fitting maybe

Mike Mahoney

Meredith I'll comments and couple make on up at can Devoro answer a Dr. I'll mention TCT. of maybe heading what's --

again, my that in our report, strong. broad-based business, in franchise, saw which performance -- grew franchises, double the PI you digit, the very X arterial So

biggest our have, businesses, double and we product after. going second performance and one mentioned, new Our interventional you business, acquired. that And Venous indications the oncology, digit smaller clinical is we that again, as our really grew Devoro we're terrific gap the with

to And And the this approval Devoro half patients so and our those first have well will in launch some in of XXXX. we'll be quite we'll second year. in hopefully in go hopefully XXXX

that things that year to some impact XXXX you'll as in progresses gap all Venous. portfolio So see well, have fill going in we the

line? So to good have come, clinical data the we'll Dr. by on you more Meredith and year-end. are

Ian Meredith

but so so to come going TCT want yet, announcements what's this Yes, TCT been highlight that announcement in we're presented the to yet I don't giving delighted you. year, be to Thank out our us But full absolutely program great opportunity Mike. finalized. of comment as haven't be will on the for no at formal that am, the I a formal cardiovascular hasn't strength businesses. Boston further,

Operator

The next comes Evercore. Vijay Kumar from with question

Vijay Kumar

half in a versus I I they X% just implies in first seem have half. the no second the 'XX, The second I comparable. end first half low half. think X-part versus the There first half, first high second the in -- on versus And half comps the doubles question. half. pre-pandemic One, here, is second 'XX half guidance versus

that confidence half what's XQ, $XXX contrast What for sheet? the half? the million looking is China know at dollar cost. And capitalized the acceleration. the is perhaps trends margin, you gross that on lockdown on in media curious So I'm what driving of second the balance Dan, impact amount giving in was second the Do the you of what's underlying

Dan Brennan

one but the P&L sheet, And this incremental it on said, the take going the I for that as not cost hit to know the because, lion's 'XX. is minimal yes, it first, early is that hit is. be do this I in I'll So balance XXXX year it share will a the XXX all what headwind year, of does

a Relative the color. some So can numbers, for headwind let 'XX, for question, on but manageable. point hopefully of a small should put your just Mike be me finer to the to and I turn it

terms organic that was the second I take in first rate revenue the year guidance, full in our for the around midpoint our half growth implies XXXX X% X.X%. of So half. of X.X%, actual If so

again, point, COVID to comps. those with to acceleration your nice comps, a obviously, So the bit are little a 'XX The that comps, versus 'XX, crazy X%.

So comps. good basis all last the is think a to year. what That's 'XX 'XX, use for I did versus we

half was comp The X.X%. first

the The second comp acceleration. midpoint So half half call at points it, our basis is of X.X% the second comp easier. points But basis XX basically, XX is revenue is

China. real we the half that's for in for relative of QX, outstripping what which it's had second is put it's the much take just guidance, we to half, China expectations say with part that pretty to basically what China comps apples-to-apples piece and that. So that and as in in see. line was great to transpired I'll first acceleration scenario The

to if to double I digits to forward anything for Looking don't seeing growth Mike, normal second the add you'd in full know, return more rates the half year. relative --

Mike Mahoney

basis easier XX have second do comp point half. first versus about We a half

a bit. little helps half, first the shortage, the so essentially as from We that did you resolved. been -- we So in that's know, some contrast impact have

China. in tougher smoother We we'll we had despite see quarter there. think a So growth X% second sailing the

business expect the strong that being first to We half. quite in strengthen despite

be We won't our FARAPULSE tremendous those in growth to is comp markets. second through excited difficult The more Europe go a neuromod, open cryo continue in in in we and in I a EP super and business. to accounts quarter. with expect Japan about long list, had up

expect we on second half. the in double-digit growth So neuromod

significant really the Slightly performance have units. line. company a easier strong the not momentum top we board So good comp business and as across our in just but and

Vijay Kumar

Congrats Helpful Mike. again, commentary.

Operator

next Rick comes The Stifel. from question with Wise

Rick Wise

and X difficult you us face FLX give growth in we a a are talk could mean what's and rollout XQ going recently you maybe you were Maybe checked sort Europe, on did ahead? kind it. in with see of quarter. growth little key FARAPULSE. we utilization. What FARAPULSE earlier And and that concerned more of where limiting both about excellent adopters but the comp, WATCHMAN, another and how they driving this their color on technology FARAPULSE, Dan, the I love and sustains in products, sustainable some about WATCHMAN impressive price

extra talk opening on color accounts are of would And any how addressing you your So goals where account Europe? in of color issue. of with Any can that the and maybe great. about terms that, you sort you're be number in

Mike Mahoney

physicians clinical to per further comments FLX it the and excellent more site. doctors similar continues level previous can with always using increasing that's drives from of physicians Thanks, get prove utilization WATCHMAN, It's comment. use, ease It Stein with Rick. On WATCHMAN referring profile and increasing And you and starts do quarters. safety which to and comfort Dr. really outcomes. what

the still profile it's of and we the of we're those outcomes clinical X underpenetrated, the market, or And trials enrolled have coming really, X% far so use. ahead know, completed doing CHAMPION the years you and ease in around market are So -- that And schedule. then safety enrolling likely know, in as which we're billion about see but terms OPTION, those enrollment, with you as and in not clinical of very here.

more drive grow comments help make we turnaround cadence WATCHMAN And any acquisition, productive expansion platform years. integration this time to for first importantly, WATCHMAN? Baylis it. some many improve in with Dr. don't XX%, So have continue continue a that coming with China, safe also we the XX% volume other think WATCHMAN terms for we're WATCHMAN going -- in on market And a of And even to FLX additional utilization. nice for to launched of the multiple really and getting to productivity Japan cases. you're procedure I improve to know, and procedure to global the of more their Stein, further Baylis platforms

Ken Stein

right, much, data. it's patient growth into safety continued of forward indicated not looking the It's It's FLX. again, the currently use with and ease to populations. No,

of spite way So enrollment challenges. completed our the actually in schedule trial of OPTION COVID and enrolled ahead

Looking for VersaCross excited I CHAMPION, really read about Mike to just then from what want Baylis data and said, solution. bringing the

efficient. we've So make AF portfolio this more them safer, And of the the think growth. all commenced our procedures launch around whole to of part see that's U.S. again, And you do that just I it's what in therapies driving make that all

Mike Mahoney

We openings, super that supply not obviously we to the a we we're us quarter new some more quarter, of asking overall, information opened some many we've quarter. provide FARAPULSE for many I openings openings. in team accounts had third here. for important than the that. in track say, accounts, more issues in And all quarter things. second versus we in how first up quite a of those many Yes, Nevertheless, would account a continue account tampered think the account chain many second manage, has years the and the few to platform expect which bit incremental going how It's you're about new

we pace So that's think bit high platform It right because a product. our of the something pricing. look that we of always constraints. the of that's And physicians. future, premium the for we the a is of can appropriate at for unique some And it terms premium the is we're a And but at take it's chain available a massively increasing a utilization it's supply quite of priced openings. The think not -- delivers in account value.

will we second in continue half for improve the that, to important the year. us of it's So to which on

Operator

with Next Stanley. question comes from Furlong Cecilia Morgan

Cecilia Furlong

ask wanted supply. WATCHMAN, I specifically to on but contrast

of year? recovery the further in you system too, do the can seen in much shortage are to hospital staffing half headwind we could back just what in how quarter. your point? impact then at Where across the you to that this and from the recovery a feel the is If And you for talk posed residual you've broadly, outlook incorporated speak

Mike Mahoney

impact orders Sure, there was WATCHMAN. certainly an the contrast with with

of Some in some and of second procedures quarter. the procedures cardiology our interventional our peripheral

shortage. that that have So WATCHMAN. you We for difficult. that, more second deferred able been make us Hopefully, could some some potentially, with of a up to bit haven't we quarter were contrast third of bit we XQ but of was, sales what a absent incremental there see but kind the bit aren't quantify mid-quarter to that, but impact for a terms helps better impact in due that in to And WATCHMAN half and quantified that. the did was in procedures some it's

And and staffing big issue. the ROIC shortage, still to On hospitals their it's do communities. continuing work a support

significantly and slightly, still hospitals faster more And better day I better for but focus procedural the and great the And is procedure productivity same also challenge like but patient of time in a a it our hospital doing satisfaction. think outcomes, important. so and doing of the the and and driving thus, becomes assisting incrementally it's is portfolio more procedure clinical that's results productivity things FARAPULSE with great throughput maybe and in less a Europe WATCHMAN

I that. products think of many key do our

staffing a over with assumption, rebound an for in be will it with shortage And into hopefully, We assume that not shortage so the is a second staffing to fix. going baked staff shortage to not And the will time, while. be not guidance. is But us. us continue half It's improve. overnight be continues baked to our

Operator

Steed Bank The comes Travis next question from America. of with

Travis Steed

P&L. pressures being gross You talked offset margin the in about the

as back, peers, up into Just of still or pressures which you a curious much OpEx margin down. then that how your And that Do level X%, have sustainable come follow-up gross this is ease? on keep than quick to 'XX. some are the China, until better at OpEx move you can

business strength China driving in your the curious what's Just versus peers.

Dan Brennan

Sure. I China. can take the gross margin and Mike the can take

the that, our adjusted managing -- offset the midpoint think P&L. is XXXX from headwind been we would Robbie's overall said year. the the to P&L at answer I operating this And we we've $XXX of of question, of margin I right? as management lines is So million how to it all able effectively guidance really look for the

with can we're through rest talked monitor that about. focus and we see a in of revenue some or So balloon on of key impacting out those the invest are to means But growth. are the continue we in have need that We'll 'XX, pipeline the the We're place, elements trying decisions the on whether 'XX to that long-term growth air all the some going to we that make point little of that and mind. spending, into macroeconomic items spending more. we to long-term if to a let relative that we being situation, decisions make all revenue

areas bottom, and at look But 'XX we impact that's an manage that we of top So to so. do. continue and rest beyond. the through P&L, do don't what have the there, that and We to 'XX we'll

Mike Mahoney

a grow. the bit quarter, X% less quite which about is what they in typically grew China than

Peripheral business Cutting our there treating And more continues our disease, is is also coronary diversified. of business growth. complex quarter quarter complex in more a much coronary It's was all that Scientific the half. then WOLVERIN, weak so maybe the strong larger really the there X across is the to our And significant for point to one lockdowns. then improvement. weeks portfolio Boston on imaging, the things So X, of the related We is which second thing anticipate saw And difficult consistent our businesses Balloon, with their China. board, our then capabilities we sure Interventions mid-quarter like an very, very drive in to last And one our performance the impact to there. in because

diverse a That the second lot would the we did a improving end team there. of portfolio. but hits patient say. very by great the strong I quite they second And a demand results, the have in impacted quarter, and it's lockdowns were obviously a bit, So -- of a job

Operator

Chickering The comes next Bank. from Pito Deutsche with question

Pito Chickering

what EPS reasons M&A flow be guys, priority keep heart but quickies. generation, always us also, that? give data Two not you size capital driving share of you the the a start or to what a you will when with free cash perspective, aggressive you I get growth? on From as understand allocation And look are your the details repo pump, pump from is seeing at the to for more Vortex can any

Dan Brennan

one. strategy, Yes, think, allocation Sure, Peter. capital crystal I can our repurchase take is I clear. the share

excess high-quality for we M&A fill a cash back cash flow the is have, share priority. available in And the use free repurchase. first we high-growth the to With tuck-in on

of the over the of lot super there. proud you we've years, history of XXXX, deals done few a X I'm the great we class If look the deals. last did of

share the utilized had repurchase. didn't available So that we and any that cash leave for room

continue be So cash, share clear, I with first forward. then would excess it's M&A going if been that think it's it room and to repurchase. And and

Ian Meredith

there's stage. and it much want this progress undertaken first-in-human Yes. respect in pleased very the support And report really to at is yet. Thank that? called me with you not days product is it's a very more -- I'm study. -- That's first-in-human so early actually study. the We've just device. just to acute Vortex, [Vitalist] Do you an take to mechanical with internally developed

Pito Chickering

Any chance you the can of size give us pump. the

Ian Meredith

mean I -- No.

Mike Mahoney

We're Yes, but early. far clinical think comment, I'll platform. platform. we too the on sharing completed early I to Meredith. details drive just Dr. that going Just to early need, about to the bullish very evidence study. We too We're be feasibility the it's continue

Operator

The Jennings next question comes Cowen. with from Josh

Josh Jennings

project just going and mean, some hear. that that's been to like seems bench in can Do growth coding great it there's give public out and you on in would of expect it animal part change seems on on wanted but Just potentially on to out impacting like some I any say And already, decision-making with just that there with not second the data it's terms this domain. data enhancements WATCHMAN device-rated devices. is the about there recently I already thrombus of a off-label kind utilization you there's then enhancement wanted presentation coding DAPT increase heard any rate. reduce label just saw in could selection? put internally that just hemocompatibility, update. focus the be on update device you next-generation -- to cause to WATCHMAN, And us I I the

Ken Stein

Josh. Ken. it's Yes,

I the from the post-implant supporting with within to as the why, it difference about FLX evidence going safety months difference already of certainly that us been in treated that and post out safety to Whether will said take not patients a Let ease DAPT the there using the in result label difference that great DAPT are doing people you're showing, the right? the differentiated with a going in competition implant, pretty a leak I on-label FLX said, and And are DAPT in data point real-world you're support in real real treated you patients material efficacy world, DAPT post terms Mike bleeding, may get certainly you we people feature again, whatever out whether post variability drug regimen use or as from stroke, that if a FLX. of on study takes and degree the have have implant. device-related change competition use, recognize that's But and and to in sure where death, presented change to post-implant the difference probably confidence already again. what was most of script, in superior the warfarin takes And away of aspirin think data study, in in no impact that were referring high to regimen FDA. me first aspirin, just coming a what using. was no real at clearly have no No great with XX,XXX only his world people TCT regimen of question thrombus, using the the implant. there were of DOAC they or the is

we're although as not device, next-generation of the go this we line detail of the one, prepared into go into a to -- really to prepared any don't benefits see I think goal we’ve at that FLX, this moment the FLX on in think closer I worked terms to new on we're Mike said, any just lot device.

Operator

Newitter The next Richard with from Truist. question comes

Richard Newitter

Congrats quarter. on the

out growth they a as comment competitors Anything headwinds some bit there you'd are calling a have little XXXX. just You could major into pricing the you in also, doesn't any that's on double-digit to offset back assume sustain? And more strategies, driving if correct a pickup comment out that? I'm please regions specific other there your half under wrong. but that then business, if margin in potentially head out call to lever that as particularly that categories, SES, that the Neuromod expecting you're assuming product but

Mike Mahoney

Yes.

made, previous into to benefit mix On pricing the some similar portfolio areas for on innovative, more are us, in one, we've potentially where percentage clinical we quite -- drug to less and you're comments -- about consistently price diversifying it's for stents we've the sensitive. you the all a our small concentration portfolio the markets of as deliver luminal of great of you example, faster-growing as dramatically, many aware, company. reduced as that And

parts we company, we some that heard But good try breakeven company, as year. our of a to even still and proof, XXXX X negative for upside you to of differentiated our it's hospitals. do price are being will too profitable all improved It's earlier kind near appropriate and like slightly year-over-year. We where of it's and future, price. negative each take areas. the prices has portfolio. maybe of right our appropriately in versus day, So pricing for good value a increases. some Difficult versus like improved in try slightly that, any positive an impact high in XXXX economic result be and it's And still have now, any hopefully, But but to

it with longer-term But positive the us Some yet, not can seeing and improving hospitals we're But our best but do the it or are for price of consistent job makes price sense it when under performance. we overall, a contracts. neutral we warrants customer.

Dan Brennan

for 'XX. impact twofold. across another One comps is neuromod comps. half X X in XXXX math simple and minus question, minus COVID one. then -- are I second second just take The on those businesses that half, and And it's the versus the less the is the That's can in on

as So that's well. helpful

for third the on The digits the that's the So quarter. for commentary second minus double Neuromod reason X for half. around

Operator

question comes Raymond next with The from Jayson Bedford James.

Jayson Bedford

you in you two organic for ex-Baylis, mentioned just Europe? FARAPULSE bit to on But expect challenges, to when get the Just guess. at an fully launch number growth just do It's EP I chain have you markets, questions. then in related the product international tough me the the EP secondly, here. a supply do rollout, And

Mike Mahoney

can you the comp. Maybe, with Yes. Dan, help me

of companies. prior terms in FARAPULSE buying comp organic us to cryo, sales and were there think no I the

no and a needed So cryo FARAPULSE. had sales

and getting So for some they both. now were you're start-ups sales essentially

that So any Dan, maybe one. on comment you can further

forth In or FARAPULSE, chain the there. companies supply some that many deal terms and challenges equipment like capital for chips of and so with

side, -- On are which aren't as really the supply constrained, catheter we great is we news.

the done new a job a of it installations each would the it's has continue on we great But unconstrained. on And catheter be but and increase to bit team So month it's equipment, side capital when number tougher, the to each improving quarter-over-quarter. difficult the say quarter.

Dan Brennan

International then, mid-teens. grew X, grew less U.S. numbers. X. And the than grew just the on Jason, The so EP total

Operator

time Tengler, more Ms. there's understand questioner. X for I

Lauren Tengler

right, that's Yes, Andrew.

Operator

question with Shagun next RBC. from The comes Singh

Shagun Singh

bit a little you if provide can color wondering was on XXXX. I

mean are a about year? we did will is year XX year. exposure? despite come expect durable to you call You headwinds And half this And then next potential catalysts out margin impact should out basis and but to what can some strength talked just should higher look to return Does beyond? your key points continue in economic going given XXXX Directionally, the the year. acuity expect goal into in for majority back plus that this -- the next macroeconomic operating we continuing we of slowdown, the into impact majority growth you of to XXXX, of that

Dan Brennan

me Yes, let take part first. the second

what that, P&L be commentary goes The is impact comes The not commentary sheet, $XXX just we majority The XXXX. the see half. more million P&L the will on of specifically in away just $XXX to P&L for we'll in persist obviously my a million, pre XXXX. It's of macroeconomic is that commentary macroeconomic XXXX XXXX. relative over is in We'll XXXX. on XXXX. to that the XXXX. XXXX. COVID into At We will don't our there's the bit incremental know. commenting be million think the And overall, hits commentary, I that that So early fully all $XXX it in clear to majority more be -- the versus to second the hit believe level, balance headwinds of

We from are helpful -- revenue we do see a very backdrop a perspective.

the You guidance raise durable It's see is the second strategy. this piece organic a for half. -- it that our on performance a year, revenue revenue see big first we in the our in of had consistent growth you half

bit just Those that Mike of early. talk about for all heard and 'XX, operating growing high revenue. and tenets company peer the beyond. we'll a end look specific numbers at set You are I continue it's think the 'XX long-term margin for our of to But expansion

Shagun Singh

catalyst. I’m the the key key just And catalyst the line just for ’XX? sorry, of top

Mike Mahoney

Yes. more unconstrained would is launch It's 'XX. EP, new potentially of company, a really -- follow talking a in the we'll just -- products bit And us it U.S. about the it's launch XXXX. you And in second be especially hopefully, hopefully, when think cryo about the of we'll bunch our there. in half platform I

the really year board. of the We portfolio it's diversity the have across and the each strength, many launches product

bit So more, change but we'll -- doesn't overnight. portfolio touch on it's it a our

will products top. our new on to much and current it's that of so enhancements So layer continue

Lauren Tengler

We to team. Thanks, any Investor or to to if hesitate have question unable your please get in Boston Mike. Thanks to don't Relations for today. joining interest appreciate follow-ups, us Scientific. your out the If reach we're you

Before for the the you will all disconnect, pertinent you replay. details Andrew give

Operator

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

may You disconnect. now

Boston Scientific (BSX) 27 Jul 222022 Q2 Earnings call transcript