Boston Scientific’s Q4, FY2018 results; Q1 2019 outlook

Boston Scientific’s Q4, FY2018 results; Q1 2019 outlook

Boston Scientific generated sales of $9.823 billion in 2018, thanks to its pipeline of new medical devices and therapies

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Marlborough, Massachusetts – Boston Scientific Corp. generated sales of $2.561 billion during the fourth quarter of 2018. This represents growth of 6.3% on a reported basis, 8.2% on an operational basis and 7.0% on an organic basis, all compared to the prior year period. The company reported GAAP earnings of $386 million or $0.27 per share (EPS), compared to a GAAP loss of $615 million or $(0.45) per share a year ago and achieved adjusted earnings per share of $0.39 for the period, compared to $0.34 a year ago.

For the full year 2018, the company generated sales of $9.823 billion. This represents growth of 8.6% on a reported basis, 8.0% on an operational basis and 7.2% on an organic basis, all compared to the prior year period. The company reported GAAP earnings of $1.19 per share, compared to $0.08 in the prior year period and delivered full year adjusted earnings per share of $1.47, compared to $1.26 in 2017. Full year 2018 adjusted earnings per share includes a $0.07 net tax benefit.

"Meaningful innovation and focused execution helped us deliver strong financial results in 2018," says Mike Mahoney, chairman and chief executive officer, Boston Scientific. "We remain driven by the opportunity to help more patients with our life-changing technologies, including a robust long-term pipeline of new devices and therapies."

Fourth quarter financial results and recent developments:

  • Reported fourth quarter sales of $2.561 billion, compared to the company's guidance range of $2.525 to $2.565 billion, representing an increase of 6.3% on a reported basis, 8.2% on an operational basis and 7.0% on an organic basis, all compared to the prior year period.
  • Reported fourth quarter GAAP earnings of $0.27 per share, compared to the company's guidance range of $0.15 to $0.17 per share.  Achieved adjusted earnings per share of $0.39, which compares to our guidance range of $0.30 to $0.32 per share. Fourth quarter adjusted earnings per share includes a $0.01 net tax benefit.
  • Achieved fourth quarter revenue growth in all segments, compared to the prior year period:
    • MedSurg: 7.4% reported, 8.9% operational and 6.2% organic
    • Rhythm and Neuro: 5.1% reported, 6.6% operational and organic
    • Cardiovascular: 6.3% reported, 8.6% operational and 7.7% organic
  • Delivered fourth quarter revenue growth in all regions, compared to the prior year period:
    • U.S.: 7.0% reported and operational
    • EMEA (Europe, Middle East and Africa): 5.1% reported and 9.2% operational
    • APAC (Asia-Pacific): 5.2% reported and 7.1% operational
    • Emerging Markets5: 16.8% reported and 27.2% operational
  • Reached an agreement on the terms of a recommended offer to acquire BTG plc., a company headquartered in the United Kingdom, which develops and commercializes products used in minimally-invasive procedures targeting cancer and vascular diseases, as well as acute care pharmaceuticals.
  • Closed the acquisition of Millipede Inc., a privately-held company in Santa Rosa, California. The Millipede IRIS Transcatheter Annuloplasty Ring System is in development for the treatment of patients with severe functional mitral regurgitation (FMR) who are not able to tolerate open-heart surgery.
  • Began REPRISE IV clinical trial, a prospective, multicenter, single-arm clinical study to assess the safety and effectiveness of transcatheter aortic valve replacement (TAVR) with the LOTUS Edge Aortic Valve System6 for intermediate surgical risk patients, including those with a bicuspid valve.
  • Reached an agreement with Edwards Lifesciences Corporation to settle all outstanding patent disputes between the companies in all venues around the world. Under the terms of the agreement, Edwards has made a one-time payment to Boston Scientific of $180 million and the parties will not litigate patent disputes related to current portfolios of transcatheter aortic valves (TAVR), certain mitral valve repair devices, and left atrial appendage closure (LAAC) devices.
  • Received U.S. Food and Drug Administration (FDA) approval for the 4.50 mm and 5.00 mm diameter SYNERGY Everolimus-Eluting Platinum Chromium Coronary Stent System, the first bioabsorbable polymer stent designed for early healing in large vessels.
  • The WATCHMAN Left Atrial Appendage Closure (LAAC) Device was included in the updated American Heart Association (AHA), the American College of Cardiology (ACC) and the Heart Rhythm Society (HRS) Guideline for the Management of Patients with Atrial Fibrillation (AF) as a stroke risk reduction option for non-valvular AF patients who are poor candidates for long-term oral anticoagulants.
  • Received FDA approval for and launched the Vercise Primary Cell and Vercise Gevia Deep Brain Stimulation (DBS) Systems featuring the Vercise Cartesia Directional Lead. The new DBS systems allow for control of the range, shape, position and direction of electrical stimulation to tailor the treatment of the symptoms patients suffering from Parkinson's disease.
  • Launched the SpyScope DSII Access and Delivery Catheter, an upgraded scope for cholangiopancreatoscopy, and two new SpyGlass DS System accessories, to offer physicians better visualization of the pancreatic and bile ducts, as well as additional tools to manage difficult stones and strictures.
  • Announced four-year results from a randomized clinical trial demonstrating that Rezum Water Vapor Therapy, a minimally invasive treatment for benign prostatic hyperplasia (BPH), provided durable results, demonstrated by a 4.4% surgical retreatment rate, and preserved sexual function.
  • Launched the AdVance XP Male Sling System in the U.S., a minimally invasive solution for the treatment of mild to moderate male stress urinary incontinence which will allow urologists to treat more men who are appropriate for this sling.

Guidance for full year, Q1 2019
The company estimates revenue growth for the full year 2019, versus the prior year period, to be in a range of approximately 7% to 9% on a reported basis and a growth range of approximately 7% to 8.5% on an organic basis, excluding the impact of changes in foreign currency exchange rates and contribution of approximately 110 basis points from the acquisitions of NxThera, Claret, and Augmenix, each with no prior year comparable sales. The company estimates income on a GAAP basis in a range of $1.13 to $1.18 per share and estimates adjusted earnings, excluding amortization expense, acquisition-related, restructuring- and restructuring-related and litigation-related net charges (credits) in a range of $1.53 to $1.58 per share.

The company estimates revenue growth for the first quarter of 2019, versus the prior year period, to be in a range of approximately 6% to 7% on a reported basis and a growth range of approximately 7% to 8% on an organic basis, excluding the impact of changes in foreign currency exchange rates and contribution of approximately 160 basis points from the acquisitions of NxThera, Claret, and Augmenix, each with no prior year comparable sales. The company estimates earnings on a GAAP basis in a range of $0.32 to $0.33 per share and estimates adjusted earnings, excluding amortization expense, acquisition-related, restructuring- and restructuring-related and litigation-related net charges (credits) in a range of $0.35 to $0.36 per share.