07.30.19
AT A GLANCE
Rank: #11 (Last year: #11)
$9.82 Billion
Prior Fiscal: $9.0 Billion
Percentage Change: +8%
No. of Employees: 32,000
Global Headquarters: Marlborough, Mass.
KEY EXECUTIVES
Mike Mahoney, Chairman and CEO
Daniel J. Brennan, Exec. VP and CFO
Kevin Ballinger, Exec. VP and President, Interventional Cardiology
Art Butcher, Sr. VP and President, Endoscopy
Wendy Carruthers, Sr. VP, Human Resources
Jodi Eddy, Sr. VP and Chief Information Officer
Joseph M. Fitzgerald, Exec. VP and President, Rhythm Management
Edward Mackey, Exec. VP, Global Operations
Dr. Ian Meredith, AM, Exec. VP and Global Chief Medical Officer
Jeff Mirviss, Sr. VP and President, Peripheral Interventions
Maulik Nanavaty, Sr. VP and President, Neuromodulation
David A. Pierce, Exec. VP and President, MedSurg
Desiree Ralls-Morrison, Sr. VP, General Counsel and Corporate Secretary
Brad Sorenson, Sr. VP, Manufacturing and Supply Chain
Eric Thépaut, Sr. VP and President, Europe, Middle East, and Africa
Warren Wang, Sr. VP and President, Asia Pacific
When it comes to M&A activity, Boston Scientific seemed to be well ahead of its peers in terms of number of transactions and overall value of those acquisitions in 2018, but ironically, the biggest headlines were spawned by a deal that never even took place. On June 11, 2018, The Wall Street Journal reported that Stryker made a takeover attempt of Boston Scientific. Although representatives from neither firm would comment on the report, the news sent shockwaves through Wall Street as trading in both stocks was temporarily halted that day. The deal would have birthed the third largest medical manufacturing firm in terms of annual device revenue; Wells Fargo Securities analyst Lawrence Biegelsen predicted yearly sales would be approximately $24 billion. There was discussion of complementary product lines, talk of whether antitrust concerns were valid, and explanations of how mega-deals were the ways in which device manufacturers offered value to healthcare provider customers.
Alas, the ballyhoo was all for naught.
Two days after the report broke, Stryker issued a statement via a regulatory filing with the U.S. Securities and Exchange Commission. It stated plainly that the firm was not in discussions to acquire Boston Scientific. While the company’s announcement squelched the majority of the conjecture over the deal, it didn’t completely eliminate it.
“The filing from Stryker states that the company is not in discussions with Boston Scientific. It does not deny that prior discussions took place,” explained Jason Benowitz, senior portfolio manager at Roosevelt Investment Group.
Even without the merger, Boston Scientific’s M&A activity in 2018 was quite noteworthy. Of the transactions that did actually take place during the year, the firm was on the buying side of the largest in terms of purchase price with its November offer of $4.2 billion for BTG plc. The U.K.-headquartered company developed and commercialized products used for minimally invasive procedures to address cancer and vascular diseases through its three business units. Its largest unit—Interventional Medicine—which housed its interventional oncology franchise and vascular portfolio, boasted products including the TheraSphere Y-90 radiotherapy microspheres, the GALIL cryoablation system, and EKOS Endovascular System. BTG also maintained a pharmaceutical business comprised of acute care antidotes to treat overexposure to certain medications and toxins.
“The acquisition of BTG and its rapidly growing peripheral interventional portfolio is an exciting extension of our category leadership strategy that will augment our capabilities in important areas of unmet need such as cancer and pulmonary embolism,” Mike Mahoney, chairman and CEO of Boston Scientific, said in a company statement regarding the transaction. “We are confident that the addition of these therapies to our portfolio will ultimately advance patient care in ways that could not be realized by either company alone, while also allowing us to realize substantial revenue and cost synergies and provide a strong return for investors.”
Although greatest in dollar amount, the BTG buy only served as the exclamation point to what had already been a very active year for Boston Scientific. Just two months earlier, Augmenix was targeted for acquisition. The developer of the SpaceOAR System, a therapy used to reduce common and debilitating side effects men may experience after receiving prostate cancer radiotherapy, was purchased for an upfront cash payment of $500 million, and up to $100 million for reaching sales-based milestones.
Prior to radiation therapy, the SpaceOAR hydrogel is injected to create additional space between the rectum and prostate during treatment, thereby reducing rectal radiation dose and associated side effects. At the time of the announcement, the hydrogel was CE marked, cleared by the FDA, and had already been used in more than 30,000 patients worldwide. Product sales were estimated to reach $50 million in 2018, and approach $90 million in 2019.
There were many more purchases in 2018, though. In fact, Boston Scientific had started with its M&A activity right at the start of the year. In January, it announced it was going to invest in Millipede, a privately-held company that developed the IRIS Transcatheter Annuloplasty Ring System for the treatment of severe mitral regurgitation. The agreement also included an acquisition option. For $90 million, Boston Scientific purchased a portion of the firm’s outstanding shares along with newly issued shares of Millipede.
Bookending the company’s fiscal year with the Millipede transaction, Boston Scientific announced just a few days before the close of the year that it would exercise its option to purchase the remaining shares of the Santa Rosa, Calif-based firm. The company had a successful completion of a first-in-human clinical study. The deal resulted in the additional payment of $325 million for the company’s remaining shares, along with a $125 million payment becoming available upon achievement of a commercial milestone.
Another on Boston Scientific’s shopping list for the year was EMcision, a privately held company with locations in the U.K. and Canada. Its flagship product was the Habib EndoHPB probe—a novel endoscopic bipolar radiofrequency device that coagulates tissue in the gastrointestinal (GI) tract for the treatment of pancreaticobiliary cancers. Patients with pancreaticobiliary cancers often develop jaundice as a result of tissue ingrowth that blocks ducts that enable bile to drain out of the GI tract. The Habib probe coagulates this tissue to help ensure fluids are able to drain, which can result in an improvement in a patient’s quality of life. The financial details of the deal were not disclosed.
Later that same month (March), Boston Scientific put up a cash payment of $306 million, and up to an additional $100 million in potential commercial milestone payments over the next four years for NxThera. The privately held firm located in Minnesota developed and sold a minimally invasive therapy for men with symptoms arising from benign prostatic hyperplasia. The firm’s Rezum system had FDA clearance and a CE mark, which had allowed it to be used to treat more than 20,000 patients.
Just a month later, Boston Scientific announced it was gobbling up two more entities. The first was Securus Medical Group, which Boston Scientific already had a stake in going back to 2016. The price for the remainder of the firm not already owned was $40 million in cash upfront and up to $10 million in contingent payments based on regulatory achievements and commercial milestones.
ANALYST INSIGHTS: BSC continues to be one of the most $100 million USD (Plus) acquirers of new technologies to bolster their key market segments in Cardio and Vascular. Interestingly, they also recently moved into spine with an acquisition. As most of their M&A investments have been performing well, watch for this trend to continue. Something interesting to speculate is whether or not BSC will ultimately be acquired by a larger player (MDT, J&J, Stryker, or even Apple or Google Verily).
Securus Medical Group, a privately held company headquartered in Cleveland, Ohio, developed a thermal monitoring system for the continuous measurement of esophageal temperature. Physicians monitor the temperature of the esophagus, which is located behind the area of the heart where hot or cool energy is applied to treat an arrhythmia, during an ablation procedure to avoid thermal injury. The integrated catheter-based probe and imaging system generates real-time images of the temperature of the esophagus.
The other deal involved nVision Medical Corporation for an upfront cash payment of $150 million, and up to an additional $125 million in potential clinical and commercial milestones over four years. The privately held company focused on women’s health, with the first and only device cleared by the U.S. FDA to collect cells from the fallopian tubes, offering a potential platform for earlier diagnosis of ovarian cancer.
According to a company statement regarding the transaction, Boston Scientific plans to conduct additional clinical research with the nVision device to further establish how the cells it collects from the fallopian tubes can be used to render a diagnosis prior to surgery and help in the decision-making process for women at increased risk for ovarian cancer.
The summer didn’t slow Boston Scientific’s spending spree down, as it announced three more purchases over July and August. Already an investor in the first firm since its inception in 2016, Boston Scientific paid an additional $202 million for the remaining 65 percent of Cryterion Medical’s shares it didn’t own. The firm was developing a single-shot cryoablation platform for the treatment of atrial fibrillation. Through the acquisition, Boston Scientific became the first company to have both cryothermal and radiofrequency single-shot, balloon-based ablation therapies in its portfolio. At the time of the announcement, the system was being investigated in a clinical study in Europe, the results of which would then be leveraged in a CE mark submission.
Claret Medical was next on the summer hit list and its cerebral embolic protection system (Sentinal), which gained a CE mark in 2014 and FDA clearance in 2017. For the $220 million upfront cash purchase price, as well as a potential reimbursement-based milestone payment of up to $50 million, Boston Scientific gained the firm’s Sentinal System, which is used to protect the brain during certain interventional procedures, predominately in patients undergoing transcatheter aortic valve replacement (TAVR). According to a company statement, in clinical studies, the Sentinel System captured debris flowing toward the brain in 99 percent of TAVR cases, regardless of the type of replacement valve used.
VENITI Inc. was grabbed for $108 million upfront cash (Boston Scientific already held a 25 percent stake), as well as up to $52 million in payments contingent upon U.S. FDA approval of the VICI stent system. The Fremont, Calif.-based firm’s VICI VENOUS STENT System was developed for the treatment of venous obstructive disease, a condition that affects more than 1.1 million people in the U.S. and Western Europe annually. The technology had received a CE mark in 2013 but had only submitted an application for a PMA in June. At the time of the announcement, there were no stent technologies specifically indicated for use in the peripheral venous system in the U.S.
The sheer number of new technologies being brought into the fold through the numerous acquisitions will undoubtedly add to the company’s sales revenue in 2019. In the meantime, Boston Scientific enjoyed another positive fiscal period. The year’s sales total of $9.82 billion was an 8.6 percent increase over 2017’s $9.05 billion. Further, the contributions were spread somewhat evenly across all three segments.
Top among the businesses was Cardiovascular, posting $3.78 billion to the company’s almost $10 billion in sales for the year. That represented a 7.9 percent increase over 2017. The two units that comprise the segment each enjoyed high single digit gains. Interventional Cardiology provided $2.59 billion in sales, a 7.1 percent increase, while Peripheral Interventions posted $1.19 billion, 9.8 percent higher than 2017’s figure.
Second in contributions to the overall sales total in 2018 was Rhythm and Neuro at $3.04 billion, an 8.3 percent increase over the prior fiscal. Within that segment, Cardiac Rhythm Management was clearly dominant with $1.95 billion in sales, rising just 2.9 percent, but also representing the lowest percentage increase across all units. Neuromodulation was second within the segment at $779 million, an enormous 22.7 percent increase over 2017 and the largest percentage increase for the year for the company. Rounding out the segment was Electrophysiology’s $311 million, reflecting a 12.1 percent rise.
MedSurg finished just a bit over $3 billion in 2018, which was an almost 10 percent gain over the prior year. Endoscopy provided $1.76 billion to that—an 8.8 percent increase year-over-year. Seeing 10.8 percent growth over 2017, Urology and Pelvic Health finished the year at $1.25 billion in sales.
In addition to the positive results of its financials in 2018, Boston Scientific also saw several successes in pending litigation with Edwards Lifesciences over a patent dispute involving the companies’ TAVR technologies. In a series of decisions that took place throughout the year, courts in the U.K., Germany, and the U.S. sided with Boston Scientific over Edwards in questions over infringement of patents. In the U.K., the Court of Appeal dismissed an appeal by Edwards Lifesciences, upholding a prior court’s decision that the Sapien 3 infringes Boston Scientific’s patent EP 2,926,766 and that all claims of that patent are valid. In Europe, the firm (along with several other opponents) successfully opposed Edwards’ European patent EP 2,399,550 in the European Patent Office, resulting in a revocation of the patent. In another decision, a German court found that Edwards’ Sapien 3 Ultra device infringed a Boston Scientific patent specific to the fabric used on the valve seal. Finally, a jury in Delaware determined a Boston Scientific patent to be valid and Edwards’ Sapien 3 Aortic Valve infringed the patent. Further, the jury decided Edwards owed Boston Scientific infringement damages through the end of 2016.
While the company enjoyed a fantastic year overall, it wasn’t all roses. It encountered a PR debacle due to a “60 Minutes” report, which reflected other concerns being brought to bear against the medtech community and the FDA’s oversight of it during other times in 2018. The “60 Minutes” report in question aired in May and was one of the first “hits” against the medical device industry. The report claimed Boston Scientific’s transvaginal mesh products contained counterfeited and smuggled materials.
Understandably, the firm saw the report as significant enough to warrant a response regarding the accusations made in the broadcast. In a statement issued by Boston Scientific and signed by Dave Pierce, executive VP of MedSurg, and Mahoney following the episode’s airing, the company stated “the broadcast resurfaced outdated and previously disproven allegations first made by attorneys in 2016. Our rigorous testing and investigation have shown that the resin currently used in our products matches a formulation from the original U.S. produced resin. This information was also reviewed by the U.S. Food and Drug Administration (FDA) and was part of the basis of their conclusions.”
The statement went on to accuse the story of being irresponsible and misleading. It also noted the firm’s perspective was not fully reflected in the broadcast, but instead, those from clinicians and plastic experts involved with litigious actions were. The statement accused the program of showing documents and photos taken out of context.
Unfortunately, for the medical device industry, the “60 Minutes” episode was just the start of the PR nightmare that snowballed in 2018, which picked up considerable steam with the release of “The Bleeding Edge” documentary and the published results of an international investigation into the FDA’s oversight of the medical device industry.
Rank: #11 (Last year: #11)
$9.82 Billion
Prior Fiscal: $9.0 Billion
Percentage Change: +8%
No. of Employees: 32,000
Global Headquarters: Marlborough, Mass.
KEY EXECUTIVES
Mike Mahoney, Chairman and CEO
Daniel J. Brennan, Exec. VP and CFO
Kevin Ballinger, Exec. VP and President, Interventional Cardiology
Art Butcher, Sr. VP and President, Endoscopy
Wendy Carruthers, Sr. VP, Human Resources
Jodi Eddy, Sr. VP and Chief Information Officer
Joseph M. Fitzgerald, Exec. VP and President, Rhythm Management
Edward Mackey, Exec. VP, Global Operations
Dr. Ian Meredith, AM, Exec. VP and Global Chief Medical Officer
Jeff Mirviss, Sr. VP and President, Peripheral Interventions
Maulik Nanavaty, Sr. VP and President, Neuromodulation
David A. Pierce, Exec. VP and President, MedSurg
Desiree Ralls-Morrison, Sr. VP, General Counsel and Corporate Secretary
Brad Sorenson, Sr. VP, Manufacturing and Supply Chain
Eric Thépaut, Sr. VP and President, Europe, Middle East, and Africa
Warren Wang, Sr. VP and President, Asia Pacific
When it comes to M&A activity, Boston Scientific seemed to be well ahead of its peers in terms of number of transactions and overall value of those acquisitions in 2018, but ironically, the biggest headlines were spawned by a deal that never even took place. On June 11, 2018, The Wall Street Journal reported that Stryker made a takeover attempt of Boston Scientific. Although representatives from neither firm would comment on the report, the news sent shockwaves through Wall Street as trading in both stocks was temporarily halted that day. The deal would have birthed the third largest medical manufacturing firm in terms of annual device revenue; Wells Fargo Securities analyst Lawrence Biegelsen predicted yearly sales would be approximately $24 billion. There was discussion of complementary product lines, talk of whether antitrust concerns were valid, and explanations of how mega-deals were the ways in which device manufacturers offered value to healthcare provider customers.
Alas, the ballyhoo was all for naught.
Two days after the report broke, Stryker issued a statement via a regulatory filing with the U.S. Securities and Exchange Commission. It stated plainly that the firm was not in discussions to acquire Boston Scientific. While the company’s announcement squelched the majority of the conjecture over the deal, it didn’t completely eliminate it.
“The filing from Stryker states that the company is not in discussions with Boston Scientific. It does not deny that prior discussions took place,” explained Jason Benowitz, senior portfolio manager at Roosevelt Investment Group.
Even without the merger, Boston Scientific’s M&A activity in 2018 was quite noteworthy. Of the transactions that did actually take place during the year, the firm was on the buying side of the largest in terms of purchase price with its November offer of $4.2 billion for BTG plc. The U.K.-headquartered company developed and commercialized products used for minimally invasive procedures to address cancer and vascular diseases through its three business units. Its largest unit—Interventional Medicine—which housed its interventional oncology franchise and vascular portfolio, boasted products including the TheraSphere Y-90 radiotherapy microspheres, the GALIL cryoablation system, and EKOS Endovascular System. BTG also maintained a pharmaceutical business comprised of acute care antidotes to treat overexposure to certain medications and toxins.
“The acquisition of BTG and its rapidly growing peripheral interventional portfolio is an exciting extension of our category leadership strategy that will augment our capabilities in important areas of unmet need such as cancer and pulmonary embolism,” Mike Mahoney, chairman and CEO of Boston Scientific, said in a company statement regarding the transaction. “We are confident that the addition of these therapies to our portfolio will ultimately advance patient care in ways that could not be realized by either company alone, while also allowing us to realize substantial revenue and cost synergies and provide a strong return for investors.”
Although greatest in dollar amount, the BTG buy only served as the exclamation point to what had already been a very active year for Boston Scientific. Just two months earlier, Augmenix was targeted for acquisition. The developer of the SpaceOAR System, a therapy used to reduce common and debilitating side effects men may experience after receiving prostate cancer radiotherapy, was purchased for an upfront cash payment of $500 million, and up to $100 million for reaching sales-based milestones.
Prior to radiation therapy, the SpaceOAR hydrogel is injected to create additional space between the rectum and prostate during treatment, thereby reducing rectal radiation dose and associated side effects. At the time of the announcement, the hydrogel was CE marked, cleared by the FDA, and had already been used in more than 30,000 patients worldwide. Product sales were estimated to reach $50 million in 2018, and approach $90 million in 2019.
There were many more purchases in 2018, though. In fact, Boston Scientific had started with its M&A activity right at the start of the year. In January, it announced it was going to invest in Millipede, a privately-held company that developed the IRIS Transcatheter Annuloplasty Ring System for the treatment of severe mitral regurgitation. The agreement also included an acquisition option. For $90 million, Boston Scientific purchased a portion of the firm’s outstanding shares along with newly issued shares of Millipede.
Bookending the company’s fiscal year with the Millipede transaction, Boston Scientific announced just a few days before the close of the year that it would exercise its option to purchase the remaining shares of the Santa Rosa, Calif-based firm. The company had a successful completion of a first-in-human clinical study. The deal resulted in the additional payment of $325 million for the company’s remaining shares, along with a $125 million payment becoming available upon achievement of a commercial milestone.
Another on Boston Scientific’s shopping list for the year was EMcision, a privately held company with locations in the U.K. and Canada. Its flagship product was the Habib EndoHPB probe—a novel endoscopic bipolar radiofrequency device that coagulates tissue in the gastrointestinal (GI) tract for the treatment of pancreaticobiliary cancers. Patients with pancreaticobiliary cancers often develop jaundice as a result of tissue ingrowth that blocks ducts that enable bile to drain out of the GI tract. The Habib probe coagulates this tissue to help ensure fluids are able to drain, which can result in an improvement in a patient’s quality of life. The financial details of the deal were not disclosed.
Later that same month (March), Boston Scientific put up a cash payment of $306 million, and up to an additional $100 million in potential commercial milestone payments over the next four years for NxThera. The privately held firm located in Minnesota developed and sold a minimally invasive therapy for men with symptoms arising from benign prostatic hyperplasia. The firm’s Rezum system had FDA clearance and a CE mark, which had allowed it to be used to treat more than 20,000 patients.
Just a month later, Boston Scientific announced it was gobbling up two more entities. The first was Securus Medical Group, which Boston Scientific already had a stake in going back to 2016. The price for the remainder of the firm not already owned was $40 million in cash upfront and up to $10 million in contingent payments based on regulatory achievements and commercial milestones.
ANALYST INSIGHTS: BSC continues to be one of the most $100 million USD (Plus) acquirers of new technologies to bolster their key market segments in Cardio and Vascular. Interestingly, they also recently moved into spine with an acquisition. As most of their M&A investments have been performing well, watch for this trend to continue. Something interesting to speculate is whether or not BSC will ultimately be acquired by a larger player (MDT, J&J, Stryker, or even Apple or Google Verily).
—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors
Securus Medical Group, a privately held company headquartered in Cleveland, Ohio, developed a thermal monitoring system for the continuous measurement of esophageal temperature. Physicians monitor the temperature of the esophagus, which is located behind the area of the heart where hot or cool energy is applied to treat an arrhythmia, during an ablation procedure to avoid thermal injury. The integrated catheter-based probe and imaging system generates real-time images of the temperature of the esophagus.
The other deal involved nVision Medical Corporation for an upfront cash payment of $150 million, and up to an additional $125 million in potential clinical and commercial milestones over four years. The privately held company focused on women’s health, with the first and only device cleared by the U.S. FDA to collect cells from the fallopian tubes, offering a potential platform for earlier diagnosis of ovarian cancer.
According to a company statement regarding the transaction, Boston Scientific plans to conduct additional clinical research with the nVision device to further establish how the cells it collects from the fallopian tubes can be used to render a diagnosis prior to surgery and help in the decision-making process for women at increased risk for ovarian cancer.
The summer didn’t slow Boston Scientific’s spending spree down, as it announced three more purchases over July and August. Already an investor in the first firm since its inception in 2016, Boston Scientific paid an additional $202 million for the remaining 65 percent of Cryterion Medical’s shares it didn’t own. The firm was developing a single-shot cryoablation platform for the treatment of atrial fibrillation. Through the acquisition, Boston Scientific became the first company to have both cryothermal and radiofrequency single-shot, balloon-based ablation therapies in its portfolio. At the time of the announcement, the system was being investigated in a clinical study in Europe, the results of which would then be leveraged in a CE mark submission.
Claret Medical was next on the summer hit list and its cerebral embolic protection system (Sentinal), which gained a CE mark in 2014 and FDA clearance in 2017. For the $220 million upfront cash purchase price, as well as a potential reimbursement-based milestone payment of up to $50 million, Boston Scientific gained the firm’s Sentinal System, which is used to protect the brain during certain interventional procedures, predominately in patients undergoing transcatheter aortic valve replacement (TAVR). According to a company statement, in clinical studies, the Sentinel System captured debris flowing toward the brain in 99 percent of TAVR cases, regardless of the type of replacement valve used.
VENITI Inc. was grabbed for $108 million upfront cash (Boston Scientific already held a 25 percent stake), as well as up to $52 million in payments contingent upon U.S. FDA approval of the VICI stent system. The Fremont, Calif.-based firm’s VICI VENOUS STENT System was developed for the treatment of venous obstructive disease, a condition that affects more than 1.1 million people in the U.S. and Western Europe annually. The technology had received a CE mark in 2013 but had only submitted an application for a PMA in June. At the time of the announcement, there were no stent technologies specifically indicated for use in the peripheral venous system in the U.S.
The sheer number of new technologies being brought into the fold through the numerous acquisitions will undoubtedly add to the company’s sales revenue in 2019. In the meantime, Boston Scientific enjoyed another positive fiscal period. The year’s sales total of $9.82 billion was an 8.6 percent increase over 2017’s $9.05 billion. Further, the contributions were spread somewhat evenly across all three segments.
Top among the businesses was Cardiovascular, posting $3.78 billion to the company’s almost $10 billion in sales for the year. That represented a 7.9 percent increase over 2017. The two units that comprise the segment each enjoyed high single digit gains. Interventional Cardiology provided $2.59 billion in sales, a 7.1 percent increase, while Peripheral Interventions posted $1.19 billion, 9.8 percent higher than 2017’s figure.
Second in contributions to the overall sales total in 2018 was Rhythm and Neuro at $3.04 billion, an 8.3 percent increase over the prior fiscal. Within that segment, Cardiac Rhythm Management was clearly dominant with $1.95 billion in sales, rising just 2.9 percent, but also representing the lowest percentage increase across all units. Neuromodulation was second within the segment at $779 million, an enormous 22.7 percent increase over 2017 and the largest percentage increase for the year for the company. Rounding out the segment was Electrophysiology’s $311 million, reflecting a 12.1 percent rise.
MedSurg finished just a bit over $3 billion in 2018, which was an almost 10 percent gain over the prior year. Endoscopy provided $1.76 billion to that—an 8.8 percent increase year-over-year. Seeing 10.8 percent growth over 2017, Urology and Pelvic Health finished the year at $1.25 billion in sales.
In addition to the positive results of its financials in 2018, Boston Scientific also saw several successes in pending litigation with Edwards Lifesciences over a patent dispute involving the companies’ TAVR technologies. In a series of decisions that took place throughout the year, courts in the U.K., Germany, and the U.S. sided with Boston Scientific over Edwards in questions over infringement of patents. In the U.K., the Court of Appeal dismissed an appeal by Edwards Lifesciences, upholding a prior court’s decision that the Sapien 3 infringes Boston Scientific’s patent EP 2,926,766 and that all claims of that patent are valid. In Europe, the firm (along with several other opponents) successfully opposed Edwards’ European patent EP 2,399,550 in the European Patent Office, resulting in a revocation of the patent. In another decision, a German court found that Edwards’ Sapien 3 Ultra device infringed a Boston Scientific patent specific to the fabric used on the valve seal. Finally, a jury in Delaware determined a Boston Scientific patent to be valid and Edwards’ Sapien 3 Aortic Valve infringed the patent. Further, the jury decided Edwards owed Boston Scientific infringement damages through the end of 2016.
While the company enjoyed a fantastic year overall, it wasn’t all roses. It encountered a PR debacle due to a “60 Minutes” report, which reflected other concerns being brought to bear against the medtech community and the FDA’s oversight of it during other times in 2018. The “60 Minutes” report in question aired in May and was one of the first “hits” against the medical device industry. The report claimed Boston Scientific’s transvaginal mesh products contained counterfeited and smuggled materials.
Understandably, the firm saw the report as significant enough to warrant a response regarding the accusations made in the broadcast. In a statement issued by Boston Scientific and signed by Dave Pierce, executive VP of MedSurg, and Mahoney following the episode’s airing, the company stated “the broadcast resurfaced outdated and previously disproven allegations first made by attorneys in 2016. Our rigorous testing and investigation have shown that the resin currently used in our products matches a formulation from the original U.S. produced resin. This information was also reviewed by the U.S. Food and Drug Administration (FDA) and was part of the basis of their conclusions.”
The statement went on to accuse the story of being irresponsible and misleading. It also noted the firm’s perspective was not fully reflected in the broadcast, but instead, those from clinicians and plastic experts involved with litigious actions were. The statement accused the program of showing documents and photos taken out of context.
Unfortunately, for the medical device industry, the “60 Minutes” episode was just the start of the PR nightmare that snowballed in 2018, which picked up considerable steam with the release of “The Bleeding Edge” documentary and the published results of an international investigation into the FDA’s oversight of the medical device industry.
