07.20.23
Rank: #11 (Last year: #11)
$12.68 Billion
Prior Fiscal: $11.89 Billion
Percentage Change: +11.1%
R&D Expenditure: $1.32B
Best FY22 Quarter: Q2 $3.24B
Latest Quarter: Q1 $3.39B
No. of Employees: 45,000
Global Headquarters: Marlborough, Mass.
KEY EXECUTIVES:
Michael F. Mahoney, Chairman and CEO
Daniel J. Brennan, Exec. VP and CFO
Arthur C. Butcher, Exec. VP and Group President, MedSurg and Asia Pacific
Joseph M. Fitzgerald, Exec. VP and Group President, Cardiology
Lance Bates, Sr. VP and President, Interventional Cardiology Therapies
Michael Jones, Sr. VP and President, Endoscopy
Jeff Mirviss, Exec. VP and President, Peripheral Interventions
Maulik Nanavaty, Sr. VP and President, Neuromodulation
Scott Olson, Sr. VP and President,
Cardiac Rhythm Management and Diagnostics
Meghan Scanlon, Sr. VP and President, Urology
Over the course of a number of years, Boston Scientific has used an aggressive strategy for its evolution. While mixing in some degree of organic growth with a number of new product releases, the primary driver for the organization’s revenue increase has been achieved through acquisition. In 2022, with one exception that will be covered later in this report, this plan continued.
The firm started the year with the completion of the $1.75 billion Baylis Medical Company purchase, a deal announced at the start of the fourth quarter of 2021. Conclusion of this agreement saw the expansion of Boston Scientific’s electrophysiology and structural heart product portfolios to include the radiofrequency NRG and VersaCross Transseptal Platforms, as well as a family of guidewires, sheaths, and dilators used to support left heart access. At the time of the initial notice, it was expected procurement of Baylis would result in net sales of $200 million for the 2022 fiscal. In its 2022 report, however, it was stated Baylis represented less than 1% of total assets as of Dec. 31, 2022, and approximately 1% of net sales for the year then ended.
The organization then started the summer with another acquisition announcement. This time, the target involved grabbing a majority stake of M.I.Tech Co. Ltd. from Synergy Innovation Co. Ltd. M.I.Tech is the creator of the HANAROSTENT technology, a family of conformable, non-vascular, self-expanding metal stents, which have been distributed by Boston Scientific in Japan since 2015. The agreement was valued at approximately $230 million.
Unfortunately, not all transactions are meant to be. Almost a year after the announcement of the deal, Boston Scientific stated it was canceling the plan to make the majority buy. Instead, the firm explained it would purchase a minority stake in the Korean company. A Boston Scientific representative cited global regulatory approvals that would have been required to finalize the deal, which were not able to be obtained.
Federal Trade Commission Bureau of Competition Director Holly Vedova issued the following statement at the time of the abandonment of the deal. “I am pleased that Boston Scientific and M.I.Tech have abandoned their proposed transaction in response to investigations by FTC staff and our overseas enforcement partners. The FTC will not hesitate to take action in enforcing the antitrust laws to protect patients and doctors. I would like to thank the entire FTC team for their excellent work on this matter.”
Returning to the 2022 fiscal year, the transactions didn’t end with these two arrangements. Rather, three more deals would be announced in the second half of the annual period.
Obsidio was a privately-held company that developed the Gel Embolic Material technology for the embolization of blood vessels in the peripheral vasculature. While the terms of the agreement were not disclosed, it was stated the acquisition would strengthen the company’s interventional oncology and embolization portfolio with a differentiated solution to address hemorrhages, cancer, and other debilitating conditions.
Then, following on the heels of the Thanksgiving weekend, it was declared Apollo Endosurgery would be brought into the fold for approximately $615 million. The company’s product portfolio includes devices used during endoluminal surgery procedures to close gastrointestinal defects, manage gastrointestinal complications, and aid in weight loss for patients suffering from obesity. The impact to Boston Scientific’s bottom line in fiscal 2022 was expected to be approximately $76 million in net sales, as a result of the anticipated growth in its endoscopic suturing system franchise—OverStitch Endoscopic Suturing System, OverStitch Sx Endoscopic Suturing System, and X-Tack Endoscopic HeliX Tacking System.
In July 2022, Apollo received de novo clearance from the FDA for its Apollo ESG, Apollo ESG Sx, Apollo REVISE, and Apollo REVISE Sx Systems. According to the company, these represent the first devices authorized by the FDA for endoscopic sleeve gastroplasty (ESG) and endoscopic bariatric revision procedures. The company’s endobariatric portfolio also includes the Orbera Intragastric Balloon for endoscopic weight management.
The deal was completed near the close of the first quarter 2023.
Boston Scientific’s final transaction of the year involved the investment in a majority stake (up to a maximum of 65%) in Acotec, a Chinese medical technology company that offers solutions designed for a variety of interventional procedures. The approximate value of the purchase was about $523 million. Acotec’s product portfolio includes drug-coated balloons, radiofrequency ablation technologies, thrombus aspiration catheters, and more than 20 other products in various stages of development across a range of specialties. During its latest fiscal, which ended June 30, 2022, the organization reported sales of approximately $53 million.
These companies join a firm that already enjoys a healthy product catalog as well as a deep innovation pipeline. That commitment to internal development resulted in a number of noteworthy announcements during the 2022 fiscal.
FDA approval was gained for image-guided programming software—Vercise Neural Navigator with STIMVIEW XT—in April. Developed in collaboration with Brainlab AG, a software-driven medical technology company, STIMVIEW XT enables clinicians (in real-time) the ability to visualize both lead placement and stimulation modeling of the brain anatomy of their patients living with Parkinson’s disease or essential tremor. The software provides patient-specific 3D visualization of the anatomy for clinicians to better personalize therapy to meet each patient’s needs. It seamlessly integrates into the Vercise Genus programming interface, designed to help localize lead placement, reduce programming time, and enable more informed treatment decisions.
That same month, the EMBOLD Fibered Detachable Coil, which is indicated to affect blood flow in the peripheral vasculature, was granted FDA clearance. The coil was designed for use in a variety of embolization procedures, a minimally invasive treatment intended to block one or more blood vessels to obstruct or reduce blood flow. Occlusion in this manner is a technique used to stop hemorrhaging, prevent aneurysm ruptures, reduce the size of certain tumors, and treat a variety of venous abnormalities.
Another approval was achieved in September to expand the instructions-for-use labeling for the current-generation WATCHMAN FLX Left Atrial Appendage Closure Device to include a 45-day dual anti-platelet therapy (DAPT) option as an alternative to 45-day oral anticoagulation (OAC) plus aspirin for post-procedural treatment of patients with non-valvular atrial fibrillation. The labeling in Europe has included the choice of either OAC or a DAPT post-procedural drug regimen for WATCHMAN technology since 2017.
These new products, along with the portfolios of the acquired organizations, join existing Boston Scientific offerings that were responsible for producing $12.68 billion in net sales in 2022. That figure represented an 11.1% increase over the prior fiscal.
Between its two main segments, Cardiovascular reported the majority of the revenue (61.7%) with a tally of $7.83 billion (+10.1% versus 2021). Between the two businesses, that broke down to an almost three-to-one split. Cardiology posted $5.93 billion, a year-over-year gain of 10.4%, while Peripheral Interventions saw a 9.1% rise to finish with $1.9 billion.
Boston Scientific’s other segment—MedSurg—recorded a 7.7% elevation, which translated to $4.91 billion. That amount was garnered from the sales of its three businesses. Endoscopy led the group at $2.22 billion (+8.1%). Urology finished second in terms of total with $1.77 billion, a 9.7% expansion. Rounding out the trio, Neuromodulation closed with $917 million, which represented a 3.5% leap compared to the previous year.
Boston Scientific’s 2022 revenue wasn’t the only expansion for the company. It also announced plans for increasing the footprint of two facilities—one in Maple Grove, Minn., and another in Ireland.
The plan in Maple Grove involved a two-story, 74,000-square-foot expansion of the manufacturing space for the Watchman device. According to CEO Mike Mahoney, the product represents one of the firm’s most important offerings and 75% of its components are made within the state. The location would produce the nitinol wire used within the technology, as well as for two stent product lines.
On the Emerald Isle, at Ballybrit in Galway, the company committed $118 million for the expansion of its location there. According to IDA Ireland, the project was anticipated to create more than 300 jobs over the course of several years and add 40,000 square feet of medical device manufacturing space to a facility that will be powered by renewable energy.
What couldn’t be done to advance innovation in-house, Boston Scientific looked to team with an expert organization that could supply the needed component. In 2022, it sought to collaborate with Truveta, a collective of U.S. health systems with a shared vision of saving lives with data. Truveta’s data is licensed for healthcare research; in this arrangement, Boston Scientific planned to use it to improve long-term patient care and gain insights into healthcare disparities. The organization gained access to de-identified medical records from more than 65 million U.S. patients.
According to Michael R. Jaff, D.O., vascular medicine specialist and chief medical officer and vice president, Medical Affairs, Innovation and Technology, Peripheral Interventions at Boston Scientific, “The first analysis will focus on gaining a deeper understanding of the long-term patient outcomes relating to the use of our products indicated for treatment of peripheral artery disease and will enable us to further our commitment to addressing the disparities in access to healthcare that exist across various patient populations and demographics.”
Unfortunately, against the backdrop of an overall positive year, there were a couple of negative aspects to the 12-month period. The firm said farewell to its co-founder and former CEO Peter M. Nicholas. The man who led the organization from 1979 to 1999 passed on May 14 at the age of 80. Even after leaving the top spot at the organization, he remained chairman of the board until 2016. He and fellow founder, John Abele, saw their startup comprised of 50 employees, a $500,000 loan, and $300,000 in investor money turn into the organization it is today.
Of the co-founder, Mahoney said, “As a pioneer who helped shape the field of minimally invasive surgery, Pete Nicholas is remembered worldwide for his contribution to vastly improved patient outcomes and equally impressive increases in healthcare efficiency.” He added, “Within the Boston Scientific family, Pete was also a lifelong mentor, motivator, and friend to hundreds of employees.”
Boston Scientific also ended all intellectual property disputes with Nevro, but it cost the company a net payment of $85 million. As a result, Nevro granted Boston Scientific a worldwide, non-exclusive, non-transferable license to practice paresthesia-free therapy at frequencies below 1,500 Hz and a covenant not to sue for any features embodied in any current Boston Scientific products for frequencies below 1,500 Hz. Boston Scientific also granted Nevro a worldwide, non-exclusive, non-transferable license under Boston Scientific’s asserted patent families and a covenant not to sue for any features embodied in any current Nevro products.
$12.68 Billion
Prior Fiscal: $11.89 Billion
Percentage Change: +11.1%
R&D Expenditure: $1.32B
Best FY22 Quarter: Q2 $3.24B
Latest Quarter: Q1 $3.39B
No. of Employees: 45,000
Global Headquarters: Marlborough, Mass.
KEY EXECUTIVES:
Michael F. Mahoney, Chairman and CEO
Daniel J. Brennan, Exec. VP and CFO
Arthur C. Butcher, Exec. VP and Group President, MedSurg and Asia Pacific
Joseph M. Fitzgerald, Exec. VP and Group President, Cardiology
Lance Bates, Sr. VP and President, Interventional Cardiology Therapies
Michael Jones, Sr. VP and President, Endoscopy
Jeff Mirviss, Exec. VP and President, Peripheral Interventions
Maulik Nanavaty, Sr. VP and President, Neuromodulation
Scott Olson, Sr. VP and President,
Cardiac Rhythm Management and Diagnostics
Meghan Scanlon, Sr. VP and President, Urology
Over the course of a number of years, Boston Scientific has used an aggressive strategy for its evolution. While mixing in some degree of organic growth with a number of new product releases, the primary driver for the organization’s revenue increase has been achieved through acquisition. In 2022, with one exception that will be covered later in this report, this plan continued.
The firm started the year with the completion of the $1.75 billion Baylis Medical Company purchase, a deal announced at the start of the fourth quarter of 2021. Conclusion of this agreement saw the expansion of Boston Scientific’s electrophysiology and structural heart product portfolios to include the radiofrequency NRG and VersaCross Transseptal Platforms, as well as a family of guidewires, sheaths, and dilators used to support left heart access. At the time of the initial notice, it was expected procurement of Baylis would result in net sales of $200 million for the 2022 fiscal. In its 2022 report, however, it was stated Baylis represented less than 1% of total assets as of Dec. 31, 2022, and approximately 1% of net sales for the year then ended.
The organization then started the summer with another acquisition announcement. This time, the target involved grabbing a majority stake of M.I.Tech Co. Ltd. from Synergy Innovation Co. Ltd. M.I.Tech is the creator of the HANAROSTENT technology, a family of conformable, non-vascular, self-expanding metal stents, which have been distributed by Boston Scientific in Japan since 2015. The agreement was valued at approximately $230 million.
Unfortunately, not all transactions are meant to be. Almost a year after the announcement of the deal, Boston Scientific stated it was canceling the plan to make the majority buy. Instead, the firm explained it would purchase a minority stake in the Korean company. A Boston Scientific representative cited global regulatory approvals that would have been required to finalize the deal, which were not able to be obtained.
Federal Trade Commission Bureau of Competition Director Holly Vedova issued the following statement at the time of the abandonment of the deal. “I am pleased that Boston Scientific and M.I.Tech have abandoned their proposed transaction in response to investigations by FTC staff and our overseas enforcement partners. The FTC will not hesitate to take action in enforcing the antitrust laws to protect patients and doctors. I would like to thank the entire FTC team for their excellent work on this matter.”
Returning to the 2022 fiscal year, the transactions didn’t end with these two arrangements. Rather, three more deals would be announced in the second half of the annual period.
Obsidio was a privately-held company that developed the Gel Embolic Material technology for the embolization of blood vessels in the peripheral vasculature. While the terms of the agreement were not disclosed, it was stated the acquisition would strengthen the company’s interventional oncology and embolization portfolio with a differentiated solution to address hemorrhages, cancer, and other debilitating conditions.
Then, following on the heels of the Thanksgiving weekend, it was declared Apollo Endosurgery would be brought into the fold for approximately $615 million. The company’s product portfolio includes devices used during endoluminal surgery procedures to close gastrointestinal defects, manage gastrointestinal complications, and aid in weight loss for patients suffering from obesity. The impact to Boston Scientific’s bottom line in fiscal 2022 was expected to be approximately $76 million in net sales, as a result of the anticipated growth in its endoscopic suturing system franchise—OverStitch Endoscopic Suturing System, OverStitch Sx Endoscopic Suturing System, and X-Tack Endoscopic HeliX Tacking System.
In July 2022, Apollo received de novo clearance from the FDA for its Apollo ESG, Apollo ESG Sx, Apollo REVISE, and Apollo REVISE Sx Systems. According to the company, these represent the first devices authorized by the FDA for endoscopic sleeve gastroplasty (ESG) and endoscopic bariatric revision procedures. The company’s endobariatric portfolio also includes the Orbera Intragastric Balloon for endoscopic weight management.
The deal was completed near the close of the first quarter 2023.
Boston Scientific’s final transaction of the year involved the investment in a majority stake (up to a maximum of 65%) in Acotec, a Chinese medical technology company that offers solutions designed for a variety of interventional procedures. The approximate value of the purchase was about $523 million. Acotec’s product portfolio includes drug-coated balloons, radiofrequency ablation technologies, thrombus aspiration catheters, and more than 20 other products in various stages of development across a range of specialties. During its latest fiscal, which ended June 30, 2022, the organization reported sales of approximately $53 million.
These companies join a firm that already enjoys a healthy product catalog as well as a deep innovation pipeline. That commitment to internal development resulted in a number of noteworthy announcements during the 2022 fiscal.
FDA approval was gained for image-guided programming software—Vercise Neural Navigator with STIMVIEW XT—in April. Developed in collaboration with Brainlab AG, a software-driven medical technology company, STIMVIEW XT enables clinicians (in real-time) the ability to visualize both lead placement and stimulation modeling of the brain anatomy of their patients living with Parkinson’s disease or essential tremor. The software provides patient-specific 3D visualization of the anatomy for clinicians to better personalize therapy to meet each patient’s needs. It seamlessly integrates into the Vercise Genus programming interface, designed to help localize lead placement, reduce programming time, and enable more informed treatment decisions.
That same month, the EMBOLD Fibered Detachable Coil, which is indicated to affect blood flow in the peripheral vasculature, was granted FDA clearance. The coil was designed for use in a variety of embolization procedures, a minimally invasive treatment intended to block one or more blood vessels to obstruct or reduce blood flow. Occlusion in this manner is a technique used to stop hemorrhaging, prevent aneurysm ruptures, reduce the size of certain tumors, and treat a variety of venous abnormalities.
Another approval was achieved in September to expand the instructions-for-use labeling for the current-generation WATCHMAN FLX Left Atrial Appendage Closure Device to include a 45-day dual anti-platelet therapy (DAPT) option as an alternative to 45-day oral anticoagulation (OAC) plus aspirin for post-procedural treatment of patients with non-valvular atrial fibrillation. The labeling in Europe has included the choice of either OAC or a DAPT post-procedural drug regimen for WATCHMAN technology since 2017.
These new products, along with the portfolios of the acquired organizations, join existing Boston Scientific offerings that were responsible for producing $12.68 billion in net sales in 2022. That figure represented an 11.1% increase over the prior fiscal.
Between its two main segments, Cardiovascular reported the majority of the revenue (61.7%) with a tally of $7.83 billion (+10.1% versus 2021). Between the two businesses, that broke down to an almost three-to-one split. Cardiology posted $5.93 billion, a year-over-year gain of 10.4%, while Peripheral Interventions saw a 9.1% rise to finish with $1.9 billion.
Boston Scientific’s other segment—MedSurg—recorded a 7.7% elevation, which translated to $4.91 billion. That amount was garnered from the sales of its three businesses. Endoscopy led the group at $2.22 billion (+8.1%). Urology finished second in terms of total with $1.77 billion, a 9.7% expansion. Rounding out the trio, Neuromodulation closed with $917 million, which represented a 3.5% leap compared to the previous year.
Boston Scientific’s 2022 revenue wasn’t the only expansion for the company. It also announced plans for increasing the footprint of two facilities—one in Maple Grove, Minn., and another in Ireland.
The plan in Maple Grove involved a two-story, 74,000-square-foot expansion of the manufacturing space for the Watchman device. According to CEO Mike Mahoney, the product represents one of the firm’s most important offerings and 75% of its components are made within the state. The location would produce the nitinol wire used within the technology, as well as for two stent product lines.
On the Emerald Isle, at Ballybrit in Galway, the company committed $118 million for the expansion of its location there. According to IDA Ireland, the project was anticipated to create more than 300 jobs over the course of several years and add 40,000 square feet of medical device manufacturing space to a facility that will be powered by renewable energy.
What couldn’t be done to advance innovation in-house, Boston Scientific looked to team with an expert organization that could supply the needed component. In 2022, it sought to collaborate with Truveta, a collective of U.S. health systems with a shared vision of saving lives with data. Truveta’s data is licensed for healthcare research; in this arrangement, Boston Scientific planned to use it to improve long-term patient care and gain insights into healthcare disparities. The organization gained access to de-identified medical records from more than 65 million U.S. patients.
According to Michael R. Jaff, D.O., vascular medicine specialist and chief medical officer and vice president, Medical Affairs, Innovation and Technology, Peripheral Interventions at Boston Scientific, “The first analysis will focus on gaining a deeper understanding of the long-term patient outcomes relating to the use of our products indicated for treatment of peripheral artery disease and will enable us to further our commitment to addressing the disparities in access to healthcare that exist across various patient populations and demographics.”
Unfortunately, against the backdrop of an overall positive year, there were a couple of negative aspects to the 12-month period. The firm said farewell to its co-founder and former CEO Peter M. Nicholas. The man who led the organization from 1979 to 1999 passed on May 14 at the age of 80. Even after leaving the top spot at the organization, he remained chairman of the board until 2016. He and fellow founder, John Abele, saw their startup comprised of 50 employees, a $500,000 loan, and $300,000 in investor money turn into the organization it is today.
Of the co-founder, Mahoney said, “As a pioneer who helped shape the field of minimally invasive surgery, Pete Nicholas is remembered worldwide for his contribution to vastly improved patient outcomes and equally impressive increases in healthcare efficiency.” He added, “Within the Boston Scientific family, Pete was also a lifelong mentor, motivator, and friend to hundreds of employees.”
Boston Scientific also ended all intellectual property disputes with Nevro, but it cost the company a net payment of $85 million. As a result, Nevro granted Boston Scientific a worldwide, non-exclusive, non-transferable license to practice paresthesia-free therapy at frequencies below 1,500 Hz and a covenant not to sue for any features embodied in any current Boston Scientific products for frequencies below 1,500 Hz. Boston Scientific also granted Nevro a worldwide, non-exclusive, non-transferable license under Boston Scientific’s asserted patent families and a covenant not to sue for any features embodied in any current Nevro products.