Boston Scientific at Bernstein Conference: Strategic Growth and Innovation

On Wednesday, May 28, 2025, Boston Scientific (NYSE:BSX) took center stage at the Bernstein 41st Annual Strategic Decisions Conference. The company showcased its robust performance and ambitious future plans, balancing strong growth metrics with challenges like tariff impacts. CEO Mike Mahoney emphasized the goal of being the top-performing med tech company, focusing on innovation and strategic expansion.

Key Takeaways

• Boston Scientific reported a strong 18% organic growth in Q1 2025.
• The company raised its full-year organic growth guidance to 12-14%.
• The FerriPulse launch is expected to revolutionize AFib ablation, with PFA projected to dominate the market by 2028.
• Discontinuation of the ACURATE valve platform is estimated to impact sales by $200 million, yet the overall guidance remains strong.
• WATCHMAN device growth is driven by new market opportunities and clinical trials.

Financial Results

• 2024 saw a 16.5% organic growth, with Q1 2025 continuing the momentum at 18%.
• EPS growth for Q1 2025 was 34%.
• The full-year organic growth guidance was increased to 12-14%, reflecting confidence despite a $200 million tariff impact.
• Gross margin is targeted to return to the 72.5% range, with operating margin expansion expected to be 50-75 basis points.

Operational Updates

• The FerriPulse system, launched recently, is gaining traction globally, expected to cover over 60% of AF ablations by 2026.
• The WATCHMAN device saw a 24% growth in Q1 2025, with revenue reaching $1.5 billion in 2024.
• Strategic discontinuation of the ACURATE neo two valve due to regulatory hurdles, with a projected $200 million sales impact.
• New product launches, including the SpyroView on the Opel mapping system, have exceeded expectations.

Future Outlook

• Boston Scientific is no longer targeting 8-10% growth but aims for higher market growth rates.
• The company is investing in future growth, focusing on expanding its interventional cardiology and venture capital portfolios.
• PFA is anticipated to reach 80% of global AF ablations by 2028.
• WATCHMAN’s market could expand significantly through the CHAMPION trial, potentially increasing the indicated population fourfold.

Q&A Highlights

• Tariff situations are improving, providing a positive outlook.
• The company is confident in its global supply chain capabilities.
• Development continues on advanced catheter technologies like FerroWave and Faraflex.
• Boston Scientific remains open to divesting non-performing segments and is not actively pursuing re-entry into the TAVR market without disruptive innovations.

Readers are encouraged to refer to the full transcript for more detailed insights into Boston Scientific’s strategic plans and financial performance.

Full transcript - Bernstein 41st Annual Strategic Decisions Conference 2025:

Lee Hambrite, US med tech analyst, Bernstein: Thanks everybody for coming. I’m Lee Hambrite, US med tech analyst at Bernstein. We are very pleased to host Boston Scientific today. We’ve got chairman and CEO Mike Mahoney

Lee Hambrite, US med tech analyst, Bernstein: and chief medical officer doctor Ken Stein. Thanks so much guys for being here. Pleasure. For those of you in the audience, if you would like to ask a question, you could submit it via the pigeonhole tool, and I will try to work in as many as I can here. So, Mike, twenty kicking off here, 2024 was another incredible year for Boston Scientific with 16 and a half percent organic growth, 22% EPS growth.

You had a great start to ’25 with 18 organic and 34 EPS growth in q one, which sets you up for a strong year. Maybe you can just kick us off with a few thoughts on the state of the business at Boston Scientific.

Mike Mahoney, chairman and CEO, Boston Scientific: Great. Thanks for having us. And doctor Stein, thanks for coming as well. Just very proud of the high very high execution of the company for for many years in a row. And as you know, our aim is to be the highest performing med tech company.

We I think we likely were last year, hopefully, this year and maybe the year before that, and our goal is to do that for the next five years. And we invest we spend time every day on hitting our near term commitments and investing to have a differentiated future. And you we can talk about that with our portfolio, but that’s our % focus of the company. And we’re off to a really good start this year. And this you saw the first quarter results, and despite the tariff headwinds, puts and takes in that one, we raised our full year guide to, I think, 12 to 14, also raised our EPS and enhanced our margin profile margin improvement for the year despite the tariff impact.

So really proud of the execution of our global team and the portfolio that we have and the the momentum of the company.

Lee Hambrite, US med tech analyst, Bernstein: Great. Maybe maybe just broadly on macro. Let’s talk about the health of med tech markets. Med tech market growth has remained pretty resilient, and stocks have held up well despite a host of macro issues, you know, policy changes, HHS appointments, cuts at FDA, potential Medicaid cuts, tariffs. Can you maybe just, spend a moment talking about the health of underlying med tech markets and then just put all of those macro issues in perspective for us?

Mike Mahoney, chairman and CEO, Boston Scientific: Yeah. It depends really on where you are in med tech, and it’s overall healthy. But the markets that we serve are extremely healthy, and that’s been an intentional strategy for many years. For those who followed us for a while, our weighted average market growth rate was 1% years ago, and now it’s kind of around the eight percent range. And that’s because of quarter over quarter, year over year focus on innovation and putting ourselves intentionally in faster growing markets for the future, and that’s what we aim to do for the next five years as well.

So our underlying market growth at Boston is very strong, and we happen to have a very unique position in what I think I will call the three largest highest growth markets in all of med tech, in the EP category, in the LAC category. And I would add a new one, Ken, concomitant with the combination of PFA and LAC is is extremely strong. So our weighted average market growth is about 8%. We’ve intentionally put ourselves in faster growth markets, and that’s what we will continue to do. But the overall, you know, patient volume continues to be strong due to aging demographics and so forth.

There are a lot of macro headwinds. We’ve been able to navigate them with the tariffs, some of the cuts on the FDA and so forth. So we’ve been able to manage those effectively, and we have a very resilient team who finds a way to deliver differentiated results. And we don’t like these macro changes, but it’s a good test for our team, and we navigate it well.

Lee Hambrite, US med tech analyst, Bernstein: Yeah. Great. And maybe just hitting tariffs, now that you mentioned it. On your q one call last month, you sized tariff impact for 2025 at $200,000,000 pretax, which is about 4% impact to to this year’s EPS. Obviously, this is still a moving target.

It seems like The US has walked back from the ledge a little bit on on tariff negotiations with China and discussions being elsewhere. Any any update to how you’re thinking about tariffs or or maybe an update on mitigation activities?

Mike Mahoney, chairman and CEO, Boston Scientific: Well, on the tariffs we gave in our two q guide, it assumed, I guess, the the European tariffs come back and the China tariffs were higher, so we’ve had better news since then. That’s actually a benefit for the company, our company, and most others. So but so that’s good news, and we’ll we’ll update our second quarter guide in July and full year guide there. So I think the tariff is certainly a better situation than we were, you know, when we gave our first quarter report. And in terms of our global supply chain, you know, we’re we’re we’re all over the world, and we are also a large investor in manufacturing in The US.

We tripled our watchman capacity in The US. We just opened up a new facility in Georgia. We’re also doing a lot of expansion outside The US as well to meet the demand. So we have an excellent global supply chain team, and, ideally, the tariffs will become less noisy over time so we can best allocate capital the right way.

Lee Hambrite, US med tech analyst, Bernstein: Got it. K. Great. Before we get into other stuff, you issued an eight k this morning, which we should hit quickly. You mentioned that Accurate neo two you’re discontinuing worldwide sales of Accurate neo two.

Maybe could you talk a little bit about what’s behind the decision, and how does that impact

Mike Mahoney, chairman and CEO, Boston Scientific: Yeah. I’ll I’ll read a statement here. Obviously, a tough decision for our team. We we had the ADVENT trial that read out quite a while ago. We’ve had a lot of discussions, in The US and with the regulatory, agencies, in The EU and basically came out with this comment this morning.

And it says that based on ongoing discussions with regulators regarding the ACURATE valve platform, we’ve recently made the decision to discontinue worldwide worldwide sales of ACURATE. We’ve also made the decision to not pursue US FDA approval for ACURATE or approval in other unapproved geographies. While a difficult decision, we felt it was necessary based on the discussion with regulators, which resulted in increased clinical and regulatory requirements to maintain regulatory approvals in global markets and to obtain approvals in new regions. The investments and additional resources needed to satisfy these requirements are prohibitive for the company. Importantly, given the strength of the company, despite the financial impact from the discontinuation of Accurate, we expect to achieve our previously issued second quarter and our full year guide, both sales and adjusted EPS.

So it’s, that’s it’s it’s disappointing. We really tried, but it’s the right decision based on the increased requirements that the regulatory agencies, have have asked us to do, in EU to keep it on the market, and there wasn’t a clear path that made sense in The US. We also have many different investment opportunities across the company, and we we we’re best positioned from a capital allocation to move on into other focus areas.

Lee Hambrite, US med tech analyst, Bernstein: Got it. Okay. Comment on rough sales

Mike Mahoney, chairman and CEO, Boston Scientific: in quoted full year sales about $200,000,000. Got it. K.

Lee Hambrite, US med tech analyst, Bernstein: K. And the point is, in addition to the discussions with US FDA, there were also discussions with European regulators, led to the point that there’d be additional investment required to keep it on the market in Europe. Really, what led to the

Ken Stein, chief medical officer, Boston Scientific: Yeah. It

Mike Mahoney, chairman and CEO, Boston Scientific: wasn’t it was the various regulatory agencies in Europe, varying degrees of opinions on it, and the requirements to do extended registries that weren’t feasible in some countries, the follow-up required, the the cost and the investment, and also the burden that that would place on hospitals and consent with patients didn’t make sense. And given the the trial in The US, it’s it’s time to make that decision and put our focus elsewhere. Okay. But I think it’s important to show the strength of the company. We’re not touching our second quarter

Lee Hambrite, US med tech analyst, Bernstein: or full year guide. Great. K. Come back maybe come back around it into interventional cardiology then if but great. Okay.

Let’s let’s zoom back out and talk about the LRP. You know, your your last long range plan from September of twenty twenty three called for eight to 10% organic growth from 2024 to ’26. You’re obviously way ahead of that ’16 and a half organic last year. You’re guiding to 12 to 14 this year. And what’s the best way to think about the next couple of two, three years at this point?

Mike Mahoney, chairman and CEO, Boston Scientific: The best way is to not think about that guide anymore based on those results, really, because we’re gonna obviously do better than that. Things would have to just fall apart for us to not beat that guide. So we’ll we’ll give our 02/2006 guide like we always do in February of twenty six. We do have an investor day in September, which will give even more insight into our portfolio. And, really, it’s the theme hasn’t changed.

Our our focus is to continue to enhance our weighted average market growth rate and continue to out execute our peer group, which we’ve done for many years in a row, and have the ability to deliver differentiated results but invest like crazy in the future of the company to best position ourselves for the next five, seven years, and that’s what we’re doing with our portfolio. So we’re we our aim is to be, you know, highly differentiated over the next five years just like we have in the past three.

Lee Hambrite, US med tech analyst, Bernstein: Got it. K. Let’s touch on gross margin. 2025 gross margin is now expected to be roughly in line with 24, 70 point three percent. And, you know, I was wondering, could there be any upside there if the tariff

Mike Mahoney, chairman and CEO, Boston Scientific: There’s probably a little bit of puts and takes, and and we’ll give it 2Q more information on Accurate. There will be some gross margin impact in the near term with Accurate decision. If the tariffs continue to to bend our way where they are currently, that would be some upside. So there’ll be some puts and takes in gross margin. Obviously, our goal is to continue to enhance it.

Our goal is to get back to that 72 and a half range. And we have key enablers that enable that that others may not have as much. This the the mix benefit and the strength of our cardiovascular portfolio is gross margin accretive. We continue to focus on VIPs and optimization. Our plant network and pricing’s essentially roughly flat.

So there’s a path to continue to enhance it. There’ll be some minor puts and takes with tariffs, maybe hopefully an upside and and slight downside with Accurate, and we’ll give the the more guidance in second quarter. Yeah.

Lee Hambrite, US med tech analyst, Bernstein: Got it. I mean, you mentioned that 72.4% in 2019. You know, as it doesn’t have you getting back there over the next five years. Do you think there’s a path back there, you know, potentially within that time frame? Or

Mike Mahoney, chairman and CEO, Boston Scientific: We we think the the right the reasons to believe is the the growth rate of the company and the mix drivers within that. So if you don’t have that, there’s not a there’s not a clear path. But you have unusual mix drivers that are growing outsized. The markets are growing outsized. Our team’s focused on productivity.

There’s some there’ll always be some minor puts and takes, but our aim is to continue to enhance our gross margin over the period. Great. Just a quick

Lee Hambrite, US med tech analyst, Bernstein: word on pricing. You know, pricing historically kinda one or 2% headwind in med tech, but it’s been a lot more favorable recent. You know, some I think companies have been pretty disciplined in the in the face of inflationary pressures. So Wonder how long can that last?

Mike Mahoney, chairman and CEO, Boston Scientific: I I think it’s so it’s it’s most of it’s portfolio. There’s always good actors and bad actors in the pricing environment, but most of it’s mix and portfolio. And, again, because we’re positioned uniquely in very, very strong markets, we have some some markets that are less advantaged in price and and struggling these stents in CRM, but now there’s such a very small percent of our portfolio versus years ago. And so the most benefit we have is mix. We are able to take up price a little bit in some markets, and some of our business is at positive price, some at slightly negative, but the net net is close to zero.

And so we anticipate that price. And I don’t think it’ll ever move to a two or 3% favorable. Well, I shouldn’t say ever. But I think modeling is kind of flattish price at the right place to be. Got it.

Okay.

Lee Hambrite, US med tech analyst, Bernstein: And maybe just touching on operating margin. You know, you’re on track to deliver 50 to 75 bps of operating margin expansion for this year, which should allow you to get back to twenty seven six for for 2025. You know, you set expectations, I think, at the last LRP for a 50 bps of operating margin expansion over the next few years or kinda 28 by 2026, that’s still kind of the right way to think about it?

Mike Mahoney, chairman and CEO, Boston Scientific: I’m gonna take this one.

Lee Hambrite, US med tech analyst, Bernstein: It’s a lot of numbers.

Mike Mahoney, chairman and CEO, Boston Scientific: But The Yeah. So the LRP we gave, again, was a 50 bps over three years, and it’d be hard not to beat Based on what we did last year, and we’re guiding to 50 to 75. And and as you said, tariffs helps us and so forth. Maybe that maybe we can be at the higher end of that range.

We’ll see. And so our our goal has been the same thing. Maybe it’s boring. It’s to outgrow our peer group in a significant way and drive operating income faster faster growth in sales. And with that, we’ve we’ve shown over time the ability to consistently improve margins while delivering in the short term.

And I think you have to look at our track record. And now that given the favorable product portfolio we have and the favorable markets, it would be highly disappointing if we didn’t find a way to continue to improve margins over the next five years.

Lee Hambrite, US med tech analyst, Bernstein: Yeah. Excellent. Okay. Cool. Let’s get into the fun stuff so and talk about the businesses.

So no no surprise where we’re gonna start on FerriPulse. So FerriPulse has been obviously a a great success story, perhaps one of the best launches in med tech history. It’s it’s hard to build a product that changes the standard of care in a way that’s faster and safer and more effective, and and you’ve done that with Verapulse. So maybe, you know, for the generalists in the crowd, maybe you could reflect a little bit on why you’ve called Verapulse the most transformational product in your career and what makes Yeah.

Mike Mahoney, chairman and CEO, Boston Scientific: You can do all the Ken will jump in after and all the other stuff. I’ll just get one in before it’s so gratifying for me because we again, our venture portfolio we’re the largest venture portfolio in medtech, And I think that’s gonna fuel fuel a lot of the unusual growth drivers differentiated growth drivers for the future, and this came from that venture portfolio. So we stuck with this company for about nine, ten years prior to actually getting approval through ups and downs, and we help them. And we can we we aim to do that with other opportunities that we have. But it’s just in in med tech, you rarely see an overnight transformation.

Med tech’s typically a bit more incremental. And a good friend of mine’s having a PFA this morning in Cincinnati. It’s it’s I’ve never seen a product transform, and we’ve launched it thirteen, fourteen months ago, a practice from electrophysiologist. And the for the generals in the room, you need an AFib ablation, you’re you’re likely gonna get a PFA and likely gonna get Ferrapulse. And it’s a safer procedure.

It’s extremely effective, and it’s very efficient for the hospital system and the doctor. Reimbursement’s also being rewarded. We expect a, additional 10% increase, in reimbursement for the hospital, similar to what we’re seeing with WATCHMAN. So it’s a, just a a product where referring cardiologists, referring physicians know about it now, and doctors are so confident. And Ken can comment more, but one of the most rewarding things I’ve I’ve heard from EPs, I spend a lot of time with EPs, is this rejuvenated their career because not only they’re more efficient, but they sleep better.

They don’t worry about adverse events. They don’t worry about how the patient’s gonna do the next day because the safety profile is so strong and it’s so effective. And our operations team has done an amazing job of staying ahead of the demand of this product. And we have a lot more to do in The US. We have a lot more to do in Europe.

We’re just starting. We’re, like, in the first inning in China, and we’re the very early innings in Japan, and there’s other segments within EP that we want to expand into. But I’m sure Ken will add on more with the other questions you have.

Lee Hambrite, US med tech analyst, Bernstein: Great. Great. Yeah. Ken, maybe we can get into the launch a little bit. You know, growth has been phenomenal.

It seems pretty clear that Verapulse is set up for very strong growth over the next few quarters. I think the biggest question that comes to mind is how does Verapulse perform as comps get tougher? You know, what are you seeing out there, with the launch?

Ken Stein, chief medical officer, Boston Scientific: Yeah. No. Lee, growth has been phenomenal, and it it it gets to a number of things. And it gets to your question. Right?

I mean, what’s so transformational about FerriPulse? And it it is unique in my experience in having something that is faster, that is safer, that is at this point clearly more effective than traditional means of ablation. And I think as Mike said, and and it’s very straightforward to use. Right? Reduces the cognitive burden.

You know, AF is remarkably common arrhythmia. Again, just to set the stage, again, for the folks who who don’t do med tech all the time, there are best data. Ten million people in The United States alone who have atrial fibrillation. Penetration of ablation pre atrial fibrillation today probably in the low single digits for paroxysmal A fib, that’s A fib that comes and goes. High single digits for persistent A fib.

A fib that comes and and and and and doesn’t go. So I mean, I I say this and I our our our IR team hates me for saying it. Right? But but it’s a market that that’s effectively infinite inside. Right?

So there there’s a huge runway for a lot of growth. And and Ferrapulse came into that. Right? And and and is such a win win for everyone. Better for patients, better for docs.

Even at a premium price with our latest generation technology, right, the the nav enabled Farrowave catheter. So our second generation Farrow Pulse catheter linked with our mapping system, Faravu on OPAL, it’s actually more economically advantageous to hospitals than traditional means of ablation. And so we’ve very rapidly seen uptake. We’ve disclosed previously more than two hundred thousand patients worldwide have been treated with the system. We’ve published clinical data in over 20,000 of those patients.

In Japan, where we only launched late Q4 last year, and in spite of not having first mover advantage in Japan, we’ve already treated over 10,000 patients. And I I think, you know, there there is a very long and very wide runway as long as we can continue to develop the lab capacity that’s necessary to deal with all these patients.

Lee Hambrite, US med tech analyst, Bernstein: Great. Great. There’s a nice productivity story with Verapulse. Maybe you can speak to that a little bit. How how are you seeing that play out in the in the real world?

Ken Stein, chief medical officer, Boston Scientific: Yeah. You know, one one of the advantages of the system, and and it really all comes back to design. It’s it’s this decade of development that Mike referred to, is it it it is a safer system. Because it’s safer, right, you the workflow to do the ablation becomes a lot more simple, a lot more straightforward. So what we typically now are seeing procedures that used to take one to two hours to accomplish, right, done in a lab in, you know, call it thirty, forty minutes.

And and what that means is, right, the typical cath lab in The United States is adding on 25% folks who are really pushing workflow, maybe doing close to doubling the volume that they’ve been able to do previously. It also gets to the the concomitant procedure that that Mike mentioned. And when we’re talking about concomitant procedures, we’re talking about treating patients with atrial fibrillation both with TheraPulse to restore normal rhythm, but also WATCHMAN left atrial appendage closure to help prevent stroke, is the other, you know, major risk patients have atrial fibrillation have. And when you take these two procedures together, which again, you go back legacy, you know, may have been an hour, hour and a half each. Right?

And and now you can do them both at one sitting. Patient is exposed to one set of risks in in in in typically under an hour. And and that’s part of what’s necessary, right, to create the capacity that we need to deal with these millions of patients.

Lee Hambrite, US med tech analyst, Bernstein: Right. So, you know, you’re you’re driving rapid rapid adoption, obviously, lots of conversion from cryo and RF. You now expect PFA to likely exceed, sixty percent of global AF ablations by 2026. What’s the latest thinking on on that metric? And do you see any rate limiting factors in the in the medium term and long term for growth?

Ken Stein, chief medical officer, Boston Scientific: Yeah, Lee. I I think, again, 60%, in 2026 is what we’re estimating to 80% by 2028. Frankly, you know, there there ought to be a future where no one gets an AF ablation using a technology other than PSA and and and and we would say other than Faribault. Again and and the only rate limiting factor to growth at this point is going to be lab capacity.

Lee Hambrite, US med tech analyst, Bernstein: Yeah. Got it. Okay. So at AF Symposium in January, you presented some data from the first phase of ADDvantage AF, which studied FerriPulse for PVI and PWA in persistent AF. That persistent indication is on track for the second half.

Maybe can you talk just a little bit about how you think about impact from that indication expansion?

Ken Stein, chief medical officer, Boston Scientific: Yeah. And so, again, to clarify for everyone, right, currently labeling for the FerroPulse system is for paroxysmal A fib, A fib that comes and goes, not for persistent. In spite of that, we’re already seeing a very large amount of off label use in The United States and frankly globally. So I don’t know that getting the label is gonna have a material impact on on on growth of Farapulse. And what people are gonna see is just getting the data out there is gonna help drive referrals.

Right? As I said, persistent A fib, it’s still single digit penetration. Because up until now, referring physicians have been concerned. Is this a safe procedure? Ferrapulse?

Yes. It is. Is this an effective procedure? Because traditionally, it’s been much harder to ablate persistent A fib than paroxysmal A fib. But the data that we just presented from ADVANTAGE really shows extraordinarily good long term success from the ablation.

We’re down now to single digit redo rates in ADVANTAGE patients with persistent A fib, and that’s something that no one has ever been able to show before with any any kind of technology.

Lee Hambrite, US med tech analyst, Bernstein: Great. So just thinking about up upcoming approvals, Farapoint FDA approval is expected in the second half of the year. We can just talk a little bit about what that adds to the portfolio.

Ken Stein, chief medical officer, Boston Scientific: Yeah. Let me say two things about just the the overall catheter portfolio. So so Faroe Point is our point ablation catheter. We we pay people in marketing

Lee Hambrite, US med tech analyst, Bernstein: to

Ken Stein, chief medical officer, Boston Scientific: get these names And it it was also studied in our advantage phase two clinical trial as an adjunct to the Faroe Wave catheter to a very specific purpose of ablating an arrhythmia called atrial flutter as an adjunct during an A fib ablation because those two are just just very common companions of each other. And, you know, the advantage of Farapoint that we showed in the data in ADDvantage is that it, again, was very efficient and very effective at achieving something called DTI block, is what you need to do to ablate atrial flutter. I think from a broader standpoint, I think really important to point out, you know, we we’ve said, Mike has said, right, that that the Faroe Wave launch may be the single most successful new product launch in med med tech. But we are really not stopping there. I think it’s really important for us to continue iterating the entire catheter portfolio.

So it’s why we already have a second generation FerroWave catheter out in the market, third generation in development. We have different catheter form factors, but Farapoint in development, again expecting approval second half of this year. Catheter called Faraflex, which is designed to be a, quote, unquote, map and ablate or a large focal lesion catheter. That’s already in its first human use clinical trials and expecting to begin pivotal trial for that later this year. So we’re we’re not just resting with FerroWave, right, but continuing to develop the entire catheter portfolio as well as the mapping ecosystem, the ultrasound ecosystem, right, the things behind that to support the entire product line.

Lee Hambrite, US med tech analyst, Bernstein: One follow-up on FairPoint. You know, I’ve heard some clinicians like to use RF for CTI lines because they worry about coronary spasm with PFA. Can you just comment on on that?

Ken Stein, chief medical officer, Boston Scientific: Yeah. So there is a phenomenon actually, with any kind of energy source that’s apply applied in close proximity to a coronary artery, that the artery just like any muscle, it gets irritated or spasm down. It’s not unique to PFA, not unique to Ferrapulse. But what we did and and really what was part of the point of that advantage phase two clinical trial data is we showed that with just simple premedication with a very common drug, nitroglycerin, which if you’re not in medicine sounds terrifying, but it’s not. It’s it’s standard use for people with coronary artery blockages.

That that that very safely, very effectively mitigated the issue of spasms. So really, from our standpoint, not a concern as long as people are premedicating with nitro.

Lee Hambrite, US med tech analyst, Bernstein: Got it. Okay. Maybe just one, the point on AvantGarde, which you competed completed enrollment for in first quarter of twenty five. Can you just talk about the significance of that trial and what that brings to the story?

Ken Stein, chief medical officer, Boston Scientific: Yes. Very excited about the AvantGUARD trial. You just heard, completed enrollment earlier this year, expect to have the results out first half next year. AVANCAR is a very different kind of an ablation trial. It’s not just to qualify and get a new catheter approved.

It’s actually to prove a new strategy, which is to show that ablation using FerroWave for persistent A fib should be the first line of defense. And so it’s early intervention instead of giving patients, which is what’s typically done today, a trial of an antiarrhythmic drug. So randomized AF ablation first line against antiarrhythmic drugs. And the hope is that should that trial be positive, we’re very optimistic about it, that that will drive earlier referral and and that will also help us to get away from that low single digit penetration in the persistent A fib population.

Lee Hambrite, US med tech analyst, Bernstein: Got it. Okay. Maybe last one on pipeline products, FerriFlex. So FerriFlex is your large focal catheter, sort of a similar shape to the sphere nine catheter. Just wonder what role does that play, and and what are your expectations for Feriflex?

Ken Stein, chief medical officer, Boston Scientific: Yeah. So we the the goal here, right, is to give the complete toolbox. Again, I I don’t golf, but the people I know who golf never go out with just one club. Right? And and I think, you know, key to success here is providing, right, the whole suite of tools that an electrophysiologist may need.

Now, you know, for a first shot ablation, where typically what you’re doing is, like, called just pulmonary vein ablation and typically for persistent A fib, also posterior wall ablation, we we really think there is no tool better than Farrowwave. But as you get into more complex arrhythmias, there can be a need for different types of catheter form factors. That’s Farah Point. For redo ablation, right, where you may need to just hit very targeted areas of the atrium, right, you may want something like Farah Flex where you can map and ablate. As we get to other arrhythmias like ventricular tachycardia, again, other form factors become more important.

But I think important to state, however, that we still see FerraWave as the workhorse catheter. And, again, just getting back to our more recent data, you know, these redo ablations, which used to be a a really big chunk of the ablations that electrophysiologists were doing and that require these much more sophisticated tools, you were down into single digit redo rates now when people use Farrow Wave as their first shot.

Mike Mahoney, chairman and CEO, Boston Scientific: Right. So I try to simplify it a bit more, and he maybe thinks it’s wrong. But if you look at the pie chart of types of ablation, two thirds of them, the PVI and posterior wall, there’s no better product available than Ferrapulse. But the one third, that’s where we have the additional point catheter and and Ferraflex, which is more more optimized for that one third.

Lee Hambrite, US med tech analyst, Bernstein: Maybe speaking to that one third a little bit and talking about the competitive landscape. You know, you have one large competitor who’s, struggled with some supply constraints, but it’s kinda just getting off the ground in The US, maybe targeting some of those more complex cases to start. What are you seeing out there from from that competitive launch?

Lee Hambrite, US med tech analyst, Bernstein: You know, I would

Mike Mahoney, chairman and CEO, Boston Scientific: say our our competitive position is stronger now than we thought it would be fifteen months ago given some of the challenges of some competitors. And the the fact that I mentioned earlier, we’ve really done a great job of rolling out FerroPulse across the globe and open up so many centers. And it’s gonna be very difficult to beat that product for that two thirds of the market I just highlighted. The that one third of the market, that’s where we’re going after the with the FairPoint catheters we launched this year and our FerriFlex catheter. So we think we have such an unusual head start.

And you can’t do this across every division, but we put, as you might expect, more attention and focus and dollars and investment in this category along with WATCHMAN and concomitant than we do anywhere else. And so we have a we’re leading the clinical trials. We’ve got a beautiful cadence of products. We have multiple venture bets to further augment it. We’re expanding in new areas with ICE.

This is the biggest market in med tech that grows the fastest. We have the the lion’s share, the lead. The market’s underpenetrated, so there will be more competition. But we’ve got a terrific head start and a and a great portfolio. Great.

Lee Hambrite, US med tech analyst, Bernstein: Maybe one question about dual energy and RF and where does RF go. You know, there’s some clinicians have expressed, an interest in in having that dual energy option, being able to use RF for for certain parts of the procedure. Do you think that’s important?

Ken Stein, chief medical officer, Boston Scientific: Yeah. I don’t think so at this point. I I again, you you know, if if we wanted to put RF on a catheter, I mean, it’s it’s it’s very easy to do. There are still gonna be some very, you know, isolated arrhythmias where RF is gonna be the best choice. We have yet to see a use case where you need both in the same catheter, and there are inherent design trade offs in doing it.

So, you know, docs who are interested in it are interested because they think you can get a catheter that’s great at both, but you can’t. And, you know, our design philosophy is, you know, let’s make the world’s best PFA catheter, which we’ve done, and let’s treat any arrhythmia where you need PFA with PFA with a catheter with the right form factor. That’s Fairwave, FairPoint, Ferraflex. And if you ever, for whatever reason, need to supplement that with RF, then take an RF catheter that’s designed to be one of the world’s best RF catheters.

Lee Hambrite, US med tech analyst, Bernstein: Gotcha. Okay. Great. Maybe wrapping up on you you launched TheraPulse with kind of agnostic strategy with respect to mapping. You’ve now got a mapping product that that you’re rolling out.

Can you comment a little bit just on the importance of mapping and how the the mapping launch is going?

Ken Stein, chief medical officer, Boston Scientific: Yep. Mapping launch is is going very well so far. I still think it is important to say that we will still be agnostic. So for people who wanna do cases without mapping, which is very common in Europe today, and, you know, the the more cost constrained your environment is, the the the more you’ll see that used, we’re very happy to support those cases. If people want to do our case with a competitive mapping system, you know, we we we are not locking down.

We’re leaving that as an ability. What we’re trying to do is, again, create a mapping ecosystem, right, where we don’t have to force people to use our mapping system. We want them to want to use our mapping system. And and the launch to date of, SpyroView on Opel, has has really exceeded our expectations.

Lee Hambrite, US med tech analyst, Bernstein: Great. Okay. Moving over to WATCHMAN. WATCHMAN hit a billion and a half in revenue in 2024. Our growth spend consistently strong 24% in the first quarter driven by the concomitant opportunity, which which you mentioned.

You updated on the Q1 call that over half of U. S. EP Implanting customers have now performed at least one concomitant procedure. If you can just reflect a little bit on the rapid uptake in the field, what are you seeing out there with concomitant?

Mike Mahoney, chairman and CEO, Boston Scientific: I would just say it’s still super early, but we’ve seen a very nice switch even over the last six months of physicians who, you know, prior to the concomitant approval and prior to the concomitant reimbursement, you would anticipate a very low penetration rate. But the adoption is is is quite strong because of the safety profile of WATCHMAN FLEXPRO, the safety profile of Ferrapulse. We already have Baylis, the the transseptal crossing platform. So it’s a very efficient, safe procedure. And as doctor Stein said, you you ideally cure your A fib, you reduce the risk of stroke, and you get patients on blood thinners.

So who who wouldn’t want that? So there we continue to have an opportunity to train many more EPs to do the concomitant procedure, which we’re doing. It it’s not popular outside The US yet given indication and reimbursement, which we think our aim is to change that over time to make it as strong in Europe and Asia Pac as in The US. But it’s very early innings, but I that’s what I mentioned before. If you look at the, I hate the word competitive moat, but I guess I’ll use it.

You have the I think the three best best markets in med tech is EP, LAEC, and the emergence of concomitant. And if you look at the growth profile for for many years to come, there’s no better markets to be in, and we we’re fortunate to have earned a leadership position in both LAEC and FerriPulse. And then when you have the combined procedure that requires both products, we are uniquely positioned to offer that. Many of our competitors don’t offer one or the other. And we’re we wanna continue to invest in making that procedure more optimized, easier, train more physicians.

And it’s also a help solve for just the constraints the health care system has. You know, bringing a patient back twice, anesthesia twice, lab time twice, it’s very inefficient. So we’re really grateful that the reimbursement is now in place as it should be to have it a procedure both procedures done very effectively at the same time. Great.

Lee Hambrite, US med tech analyst, Bernstein: The champion trial has become an increasingly important part of the story. Obviously, a huge potential market expansion, indication expansion for WATCHMAN. Can you just talk a little bit about the importance of CHAMPION and and how to think about what that means for the business?

Ken Stein, chief medical officer, Boston Scientific: Yeah. So so CHAMPION is our first line trial WATCHMAN FLEX against the, you know, so called NOACs, the the the new not so new anymore, oral anticoagulant medications, you know, like Eliquis, Xarelto, things like that. And we expect to have those data reported out first half of next year. Goal here is to show that we’ve got comparable efficacy to taking pills every day for life and to be able to show that there’s actually less bleeding over the long term with WATCHMAN than if you’re taking on those medications. You know?

And and should we get those results, right, that that has a number of really important impacts. Like, first of all, it can quadruple the size of the indicated population for left atrial appendage closure. And then it also, you know, would get us, we feel confident, better representation, international guidelines, help unlock the international market, get it get it to the point where international use of WATCHMAN comes close to what we see in The United States, and also enable us to get a more favorable national coverage decision from CMS in The United States, you know, to cover reimbursement for the procedure as a first line option.

Lee Hambrite, US med tech analyst, Bernstein: Great. Maybe maybe we can shift over to interventional cardiology for a moment. You know, you’ve had a very successful interventional cardio cardiology business for a long time. You’ve grown that complex PCI business really well. It’s now much larger than the drug eluting stents business.

With the news this morning about TAVR, just a question, can can you be the leader in interventional cardiology without a TAVR asset?

Mike Mahoney, chairman and CEO, Boston Scientific: I would say I we we are the leader in coronary intervention, and the team has done a remarkable job. It’s, again, it’s all about portfolio management and putting yourself purposely in the fastest growing markets. And that team, which was overweighted the drug eluting stents years ago, has essentially reinvigorated the whole imaging platform with our imaging platform. We’ve also reinvigorated the first market with the agent drug coated balloon, and now we’re doing new studies to widen indication of that to make it, you know, potentially at least a billion dollar market opportunity. And that business is growing essentially at double digits.

So the team has done a terrific job as the leader in coronary interventions of continuing to focus on unmet needs. We’ve recently acquired, as you know, Bolt, to treat, to go after a competitor there to to further round out that portfolio. Do we have approval for above the knee and peripheral interventions now and below the knee next year. We just start our our clinical trial. We also acquired a early stage company called SonyV for hypertension, which potentially could be a nice market depending on what happens with the reimbursements, private pay market, and so forth.

That’s a differentiated hypertension. That business goes there. So the area that we’re less good at, for sure, is is aortic valve replacement TAVI and mitral and so forth. That’s a gap. We have a number of really compelling venture plays in those areas, and we’ll see over time whether that makes sense based on the progress that they make.

So our our our focus continues to be on category leadership and putting ourselves in faster growth markets. And I think our interventional cardiology story, taking it from a very low single digit growth to a close to double digit most quarters, is a great example of our portfolio management execution of the company and leveraging our internal r and d and our VC portfolio. The largest investment we have in the company is in interventional cardiology called Vitalist, which is our circulatory support system. We’ve done, I think, about 30 patients successfully in VFS. We’ll start The US clinical trial for a complex PCI and then for shock.

So that’s a longer term investment, but we’re very bullish on that market. And, again, some players have point solutions in these markets. We have a very comprehensive portfolio. So when it comes to contracting and partnering, you wanna have a complex you wanna have a comprehensive portfolio, to leverage and partner with hospitals, and that’s what we offer. Got it.

Lee Hambrite, US med tech analyst, Bernstein: One more on TAVR. You know, with with LOTUS and now NEO two, you know, is this this end of the road in TAVR? You know, is is it is it possible that you kinda go back and take another shot there?

Mike Mahoney, chairman and CEO, Boston Scientific: You know, we’ll see. Four years ago, you would have said you should shut down your EP business because it was $400,000,000 and not growing and not making any money, hardly. Then we had we invested smartly in Baylis and Ferro Pulse, and it worked out. So we never say never. For us to get back in the TAVR market one day, it would have to be a compelling platform that we think would be differentiated.

But at this point, you know, we we’ll continue to scan, but I would never say never. But we’d only do it if we felt like it could make a meaningful impact. Given the and the reason I say that, we we have so many other investment areas across the company. It would have to be one that would be compelling. Yeah.

Got it.

Lee Hambrite, US med tech analyst, Bernstein: Structural heart more broadly, you know, where does that rank in your priorities? I mean, it’s obviously a big growing market, a place where you have less exposure. Is that an area where you wanna take more shots on goal?

Mike Mahoney, chairman and CEO, Boston Scientific: Well, we we we consider LACs kind of in the structural heart area, so we’re we’re kind of all in on that as you know. And as you as you may you know, we have we have multiple VC investments, a few of them with fixed options to buy if we want to if and if they make progress across tricuspid and mitral. And as you said with TAVI, the TAVI market is still healthy. It’s not doesn’t grow as fast as it used to. It grows a little bit below our weighted average market growth rate as a company.

It’s the only way we would enter that if we felt there was something disruptive. Got it.

Lee Hambrite, US med tech analyst, Bernstein: You mentioned the venture capital portfolio. You’ve got a growing VC portfolio. Many of your most successful acquisitions have come out of that portfolio, including Cameron Health years ago, Preventus, Verapulse, of course, Bolt more recently. Can you just comment on that portfolio? How how important is that to your future?

And how hard is it to be good at investing in this?

Mike Mahoney, chairman and CEO, Boston Scientific: I I think we’re we’re not perfect. We’re I think we’re better than many. But you’re you’re gonna have some setbacks because they’re by nature, they’re early stage. They’re typically more disruptive. And so so there’s gonna be, you know, some that work out and some that don’t work out.

But we’ve gotten pretty good at over the years. Our portfolio now is larger and more exciting than it’s ever been and primarily weighted across the cardiovascular landscape, but we have some very exciting VC bets in urology as well as endoscopy. So I think as the company continues to get bigger and bigger, we can walk and shoot them at the same time. We can deliver high performing results and invest in the long term while improving margins. And the VC portfolio allows us to have a good look at these companies.

When they don’t work out, we’re able to manage the dilution if we’re have some equity accounting in there. But the the payoff is quite large, and it frees up our team to continue to enhance our core portfolio. We do traditional tech and m and a. And then for our r and d teams, they don’t look at it as we’re losing out. We’re doing a VC deal.

If we buy the company, that product will come internal to our r and d teams. So our r and d teams are very much in sync, that our best thing we can do is create more shots on goal, treat more patients. And so oftentimes, we’ll have an internal technology that we like a lot, but it won’t get the investment required to bring it forward at a proper time frame. So we’ll spin that company that not company. We’ll spin that technology out to a third party, invest in it, see how it goes, and bring it back in.

So we have a lot

Lee Hambrite, US med tech analyst, Bernstein: of motivation across the team not to be protective, but what can we effectively fund efficiently? And if we can’t, let’s spin it out, or let’s do a VC opportunity. Got it. You touched on Bolt Medical. You you announced that deal back in January.

It gives you exposure to the exciting intravascular lithotripsy IVL space, which was, of course, pioneered by Shockwave. Maybe can you touch on that a little bit and talk about where Bolt is in its development journey?

Mike Mahoney, chairman and CEO, Boston Scientific: Yeah. We’re very excited about that. We we initially started that company. That was the story I just said initially with some IP, moved it along a little bit, realized we couldn’t fund it, given other priorities, spun it out. Keegan Harper did a fantastic job with it.

It’s a terrific platform. It has approval for above the knee. So we’ll start launching in probably late fourth quarter for peripheral vascular above the knee, but it has some differentiated features, in cardiovascular where the largest part of the market is in terms of its number of emitters, its ease of use, and also the ecosystem that we’re able to place with it. So you with Boston Scientific, you can see the issue with our IVUS imaging. You can prep the vessel with our and with our various products or with Bolt, and you can treat the vessel.

So beyond it being a differentiated product for IVL as a stand alone, doctors look at it as treating a patient. And the portfolio that we have will be very difficult to compete if you have just a stand alone IVL product.

Lee Hambrite, US med tech analyst, Bernstein: One question from the audience. What changes are you seeing in your engagement with the FDA on the back of some of the Yeah.

Ken Stein, chief medical officer, Boston Scientific: You know, frankly, in terms of our review cycles and and, products that are under review right now, not not not much of a change. You know, the the things that were covered under MedUFA with with user fees, they fired a whole bunch of people, but then they rehired all of them. So I I’d say not not too much of a change there. Longer range, still a little bit of a wait and see as we look at what some of the impact is maybe at some of the offices of innovation within FDA. But today, review teams are largely intact and, you know, we we really haven’t had any particular difficulties with any of our submissions that are under review right now.

Lee Hambrite, US med tech analyst, Bernstein: Great. Quick one on M and A. Lots of activity recently, Silk Road, Axonics, Cortex, Bold Medical, Oncology, Sanofi. Can can you just talk a little bit about the path going forward? You know, do you need to take a pause here after all those, or you’re good to go?

Keep firing on.

Mike Mahoney, chairman and CEO, Boston Scientific: We’re good. We’re fine and good to go. It’s we we’ve this has been our recipe for for many, many years. With our VC portfolio and m and a, it’s all about putting ourselves in faster growth markets and expanding our category leadership so we can partner with customers better. And that’s exact all of those fit into that category.

And so we think that playbook’s smart. We’re we’re effective at it. We’re very good at doing integrations. We know when to stop programs, as you know. Maybe that’s what took us a while longer.

But that’s the playbook that works really well for the company, and there’s we’re in enough businesses with so much unmet need that there’s plenty of things to look at.

Lee Hambrite, US med tech analyst, Bernstein: Let’s talk about size of the company for a sec. So you’re in a really nice kind of size right now, about 17,000,000,000 revenue. You got a bunch of growth drivers that can move really move the needle for you. Sometimes when companies get too big, they get a little cumbersome and harder to manage. How how do you think about the path forward?

I mean, would you ever consider divesting some things that don’t make sense or don’t grow as fast?

Mike Mahoney, chairman and CEO, Boston Scientific: We always look at it. There’s nothing top of mind that we want to do at this point. But, you know, we were 5,000,000,000. Now we’re 17, and we’ll be quite a bit bigger than 17 at the end of this year. So the company has gotten larger, but I think we’ve proven that as we continue to get larger, we can walk and chew gum at the same time.

We can still be very agile. You have to focus every day in how to get better, how to reduce bureaucracy, how to make the company more agile, and have that very intentional part of your DNA. If you don’t do that, then you become a bigger, slower company. But we are not gonna be that. And we have the innovation cadence and the mindset to, despite getting larger, to continue to grow at a highly differentiated rate and improve margins.

And we have the portfolio and the people to do it.

Lee Hambrite, US med tech analyst, Bernstein: Okay. Maybe just wrapping up, Mike. You know, over over your time at Boston Scientific, you really transformed the company. The stock performed exceedingly well. What’s left to accomplish?

You know, how do you think about the next five years, next five, ten years?

Mike Mahoney, chairman and CEO, Boston Scientific: It’s easy. It’s a it’s a awesome company. It’s a great industry, and our goal is my goal is to have the most differentiated company for the next five years, the next seven years. And there’s so much patient unmet need. It’s a great business.

It’s competitive. We have a phenomenal team. And we don’t look at we don’t look back at last quarter. We were focused on how do we get better today, and how do we become how do we differentiate in 2030. And we’re able to do that, and our team is very committed to that.

And it’s very inspiring. That’s what we wanna continue to do.

Lee Hambrite, US med tech analyst, Bernstein: Sure. Thanks, guys. Alright. Good seeing you. Thanks.

Thanks. Great.

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