07.20.22
Rank: #11 (Last year: #11)
$11.89 Billion
Prior Fiscal: $9.91 Billion
Percentage Change: +19.9%
R&D Expenditure: $1.2B
Best FY21 Quarter: Q4 $3.13B
Latest Quarter: Q1 $3.03B
No. of Employees: 41,000
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
Maulik Nanavaty, SVP and President, Neuromodulation
Scott Olson, SVP and President, Cardiac Rhythm Management and Diagnostics
The medical device industry has been experiencing significant consolidation of both OEMs and their supply chain partners. While not always at the top of the price list in terms of deal value, Boston Scientific has been one of the more active M&A participants among its peers in sheer number of transactions. Of particular note was its acquisition of BTG Specialty Pharmaceuticals finalized in 2019—a roughly $3.7 billion net purchase.
Following that closing, the organization moved to divest the Pharmaceutical Licensing royalties segment of BTG in the fourth quarter of 2019. Then, at the very end of 2020, Boston Scientific announced it would shed itself of another non-medical-device segment. Specialty Pharmaceuticals, which had been formed as a business unit, was on the chopping block with an $800 million price tag. The buyers were Stark International Lux S.A.R.L., and SERB SAS, affiliates of SERB, a European specialty pharmaceutical group. At the start of March 2021, the agreement was final. That transaction, however, was hardly the only one for Boston Scientific during its latest fiscal year. After a couple years of cooler than average M&A activity, it jumped right back into the scrum in 2021.
In the first month of the year, Boston Scientific declared it would purchase Preventice Solutions, a privately-held company that offers a full portfolio of mobile cardiac health solutions and services. The deal, which had a potential value as much as $1.2 billion, would bring in an array of monitoring products, ranging from ambulatory cardiac monitors (including short and long-term Holter monitors) to cardiac event monitors and mobile cardiac telemetry. Preventice’s 2020 sales totaled $158 million.
Just six weeks later, Boston Scientific announced it was involved in another deal. This time, the arrangement involved the acquisition of the global surgical business of Lumenis LTD, a developer of energy-based medical solutions. This transaction involved an upfront cash payment of just over $1 billion and included premier laser systems, fibers, and accessories used for urology and otolaryngology procedures. Lumenis’ aesthetics and ophthalmology businesses, however, remained with the original owner.
“The MOSES laser technology, paired with our LithoVue Single-Use Digital Flexible Ureteroscope and comprehensive kidney stone management portfolio, will enable execution of our strategy for our stone franchise,” said Meghan Scanlon, senior vice president and president, Urology and Pelvic Health at Boston Scientific.
The closing of the deal was announced on Sept. 1, 2021.
In June, Boston Scientific announced a move for a company it had financial interest in since 2014 and at the time, held a 27% equity stake. The firm exercised its option to acquire the remaining shares of Farapulse, supplier of the FARAPULSE Pulsed Field Ablation System—a non-thermal ablation system to treat atrial fibrillation and other cardiac arrhythmias. Boston Scientific would spend approximately $295 million for the remaining 73% of shares and pay an additional $92 million based upon achievement of specific clinical and regulatory milestones. Additional revenue-based payments were also incorporated into the deal for a three-year period.
Continuing the shopping spree in September, the organization entered an agreement to purchase Devoro Medical. Devoro is the developer of the WOLF Thrombectomy Platform, which targets and rapidly captures blood clots using finger-like prongs that retrieve and remove thrombi in the arterial and venous systems. Like Farapulse, Boston Scientific was already an investor in Devoro (since 2019) and held a 16% stake at the time of the announcement. The remaining 84% cost the firm approximately $269 million, with achievement payments for clinical and regulatory milestones tacking on an additional $67 million.
Finishing with a bang, Boston Scientific announced its largest deal in October, valued at $1.75 billion (upfront payment). Baylis Medical Company offers the radiofrequency NRG and VersaCross Transseptal Platforms, as well as a family of guidewires, sheaths, and dilators used to support left heart access. These platforms have advanced transseptal puncture and are clinically proven to enhance safety, efficacy, and efficiency when crossing the atrial septum to deliver therapies in the left side of the heart, such as atrial fibrillation ablation, left atrial appendage closure, and mitral valve interventions. Baylis is expected to generate net sales approaching $200 million in 2022, having achieved double-digit year-over-year sales growth during each of the past five years.
In addition to a flurry of M&A activity to spur growth and expand its product offerings, Boston Scientific also offered information on a number of newsworthy product developments.
Its WaveWriter Alpha portfolio of spinal cord stimulator (SCS) systems was given a limited market release in January 2021. The unified portfolio of four MRI conditional, Bluetooth-enabled rechargeable and non-rechargeable implantable pulse generators provides personalization, and for the first time in SCS, Fast Acting Sub-perception Therapy (FAST) designed to deliver paresthesia-free pain relief in minutes. The systems are supported by the Cognita Solutions’ suite of digital tools for patients and physicians.
FDA approval was gained for the fourth-generation Vercise Genus Deep Brain Stimulation System. The portfolio, approved for conditional use in an MRI environment, consists of a family of Bluetooth-enabled, rechargeable and non-rechargeable, implantable pulse generators that power Cartesia Directional Leads, designed to provide symptom relief.
In March, the firm announced another FDA approval—the TheraSphere Y-90 Glass Microspheres, developed to treat patients with hepatocellular carcinoma (HCC). The approval expands access to the life-prolonging therapy for a greater number of patients, which, at the time, had been utilized under a humanitarian device exemption. The approval made TheraSphere the only radioembolization technology indicated for the treatment of unresectable HCC in the U.S. at the time.
The organization’s EXALT Model B Single-Use Bronchoscope, designed for bedside procedures in the ICU and OR, completed its CE mark in May, then obtained FDA 510(k) clearance in August. The scope can be used for a wide range of bronchoscopy procedures such as secretion management, airway intubation, percutaneous tracheostomy, double lumen endotracheal tube placement, and biopsies. The device is offered in three sizes—slim, regular, and large—each designed to deliver suction performance and direct, precise imaging.
Also in August, CMS granted a New Technology Add-on Payment for single-use duodenoscopes, applicable to the EXALT Model D Single-Use Duodenoscope, as part of its Fiscal Year 2022 Hospital Inpatient Prospective Payment System. As of Oct. 1, 2021, CMS would provide hospitals with additional device reimbursement when Boston Scientific’s duodenoscope was used for eligible cases in the hospital inpatient setting.
In the last month of its 2021 fiscal year, the organization initiated the MODULAR ATP clinical trial to evaluate the safety, performance, and effectiveness of the mCRM Modular Therapy System. The mCRM System consists of two cardiac rhythm management devices intended to work together to coordinate therapy: the EMBLEM MRI Subcutaneous Implantable Defibrillator System and the EMPOWER Modular Pacing System, which is designed to be the first leadless pacemaker capable of delivering both bradycardia pacing support and antitachycardia pacing.
These products, whether developed in-house or acquired through an M&A transaction, will help ensure future growth. They expand an already robust product offering that resulted in substantial gains as it saw the return of elective procedures following the decreases experienced in fiscal 2020 due to the COVID-19 pandemic. In fact, every unit of Boston Scientific reported double-digit growth (with the exception of Specialty Pharmaceuticals, which only contributed $13 million before completion of its divestiture). Further, every unit finished ahead of 2019’s totals as well. As a whole, Boston Scientific finished its 2021 fiscal having gained 19.9% in revenue over 2020, translating to $11.89 billion in sales.
In its MedSurg segment, the tally was $3.72 billion, reflecting a 21.4% expansion. Within the group, Endoscopy increased by 20.3% to contribute $2.14 billion to the firm’s total. Sister unit Urology and Pelvic Health ballooned by 23.1% to end with $1.58 billion in sales.
The three units that make up the Rhythm and Neuro segment joined to post $3.29 billion in revenue. Cardiac Rhythm Management led the trio with $2.02 billion in revenue, a rebound of 18.5%. Electrophysiology offered $365 million to the company’s coffers, reflecting an impressive 27.4% growth over the prior year. The remaining division, Neuromodulation, brought in $909 million, which was 19.5 percent higher than 2020.
The pair of Cardiovascular units coupled for a company leading $4.86 billion contribution. This was an outstanding 25.3% gain. Interventional Cardiology saw an incredible 32.2% explosion in sales compared to the year prior. It posted $3.04 billion, which represented the highest total of any one single business unit. Its partner within the segment, Peripheral Interventions, grew 15.4% to finish with a revenue figure of $1.82 billion.
Unfortunately, Boston Scientific didn’t see all positives in 2021. In March, it settled pending legal claims made by most U.S. states regarding surgical mesh devices and alleged deceptive marketing. According to a Reuters article, the firm will pay $188.7 million as part of the agreement with 47 states and Washington, D.C. It also stated it would provide a more accurate description of the product to consumers, as well as share the safety and risks of using mesh.
$11.89 Billion
Prior Fiscal: $9.91 Billion
Percentage Change: +19.9%
R&D Expenditure: $1.2B
Best FY21 Quarter: Q4 $3.13B
Latest Quarter: Q1 $3.03B
No. of Employees: 41,000
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
Maulik Nanavaty, SVP and President, Neuromodulation
Scott Olson, SVP and President, Cardiac Rhythm Management and Diagnostics
The medical device industry has been experiencing significant consolidation of both OEMs and their supply chain partners. While not always at the top of the price list in terms of deal value, Boston Scientific has been one of the more active M&A participants among its peers in sheer number of transactions. Of particular note was its acquisition of BTG Specialty Pharmaceuticals finalized in 2019—a roughly $3.7 billion net purchase.
Following that closing, the organization moved to divest the Pharmaceutical Licensing royalties segment of BTG in the fourth quarter of 2019. Then, at the very end of 2020, Boston Scientific announced it would shed itself of another non-medical-device segment. Specialty Pharmaceuticals, which had been formed as a business unit, was on the chopping block with an $800 million price tag. The buyers were Stark International Lux S.A.R.L., and SERB SAS, affiliates of SERB, a European specialty pharmaceutical group. At the start of March 2021, the agreement was final. That transaction, however, was hardly the only one for Boston Scientific during its latest fiscal year. After a couple years of cooler than average M&A activity, it jumped right back into the scrum in 2021.
In the first month of the year, Boston Scientific declared it would purchase Preventice Solutions, a privately-held company that offers a full portfolio of mobile cardiac health solutions and services. The deal, which had a potential value as much as $1.2 billion, would bring in an array of monitoring products, ranging from ambulatory cardiac monitors (including short and long-term Holter monitors) to cardiac event monitors and mobile cardiac telemetry. Preventice’s 2020 sales totaled $158 million.
Just six weeks later, Boston Scientific announced it was involved in another deal. This time, the arrangement involved the acquisition of the global surgical business of Lumenis LTD, a developer of energy-based medical solutions. This transaction involved an upfront cash payment of just over $1 billion and included premier laser systems, fibers, and accessories used for urology and otolaryngology procedures. Lumenis’ aesthetics and ophthalmology businesses, however, remained with the original owner.
“The MOSES laser technology, paired with our LithoVue Single-Use Digital Flexible Ureteroscope and comprehensive kidney stone management portfolio, will enable execution of our strategy for our stone franchise,” said Meghan Scanlon, senior vice president and president, Urology and Pelvic Health at Boston Scientific.
The closing of the deal was announced on Sept. 1, 2021.
In June, Boston Scientific announced a move for a company it had financial interest in since 2014 and at the time, held a 27% equity stake. The firm exercised its option to acquire the remaining shares of Farapulse, supplier of the FARAPULSE Pulsed Field Ablation System—a non-thermal ablation system to treat atrial fibrillation and other cardiac arrhythmias. Boston Scientific would spend approximately $295 million for the remaining 73% of shares and pay an additional $92 million based upon achievement of specific clinical and regulatory milestones. Additional revenue-based payments were also incorporated into the deal for a three-year period.
Continuing the shopping spree in September, the organization entered an agreement to purchase Devoro Medical. Devoro is the developer of the WOLF Thrombectomy Platform, which targets and rapidly captures blood clots using finger-like prongs that retrieve and remove thrombi in the arterial and venous systems. Like Farapulse, Boston Scientific was already an investor in Devoro (since 2019) and held a 16% stake at the time of the announcement. The remaining 84% cost the firm approximately $269 million, with achievement payments for clinical and regulatory milestones tacking on an additional $67 million.
Finishing with a bang, Boston Scientific announced its largest deal in October, valued at $1.75 billion (upfront payment). Baylis Medical Company offers the radiofrequency NRG and VersaCross Transseptal Platforms, as well as a family of guidewires, sheaths, and dilators used to support left heart access. These platforms have advanced transseptal puncture and are clinically proven to enhance safety, efficacy, and efficiency when crossing the atrial septum to deliver therapies in the left side of the heart, such as atrial fibrillation ablation, left atrial appendage closure, and mitral valve interventions. Baylis is expected to generate net sales approaching $200 million in 2022, having achieved double-digit year-over-year sales growth during each of the past five years.
In addition to a flurry of M&A activity to spur growth and expand its product offerings, Boston Scientific also offered information on a number of newsworthy product developments.
Its WaveWriter Alpha portfolio of spinal cord stimulator (SCS) systems was given a limited market release in January 2021. The unified portfolio of four MRI conditional, Bluetooth-enabled rechargeable and non-rechargeable implantable pulse generators provides personalization, and for the first time in SCS, Fast Acting Sub-perception Therapy (FAST) designed to deliver paresthesia-free pain relief in minutes. The systems are supported by the Cognita Solutions’ suite of digital tools for patients and physicians.
FDA approval was gained for the fourth-generation Vercise Genus Deep Brain Stimulation System. The portfolio, approved for conditional use in an MRI environment, consists of a family of Bluetooth-enabled, rechargeable and non-rechargeable, implantable pulse generators that power Cartesia Directional Leads, designed to provide symptom relief.
In March, the firm announced another FDA approval—the TheraSphere Y-90 Glass Microspheres, developed to treat patients with hepatocellular carcinoma (HCC). The approval expands access to the life-prolonging therapy for a greater number of patients, which, at the time, had been utilized under a humanitarian device exemption. The approval made TheraSphere the only radioembolization technology indicated for the treatment of unresectable HCC in the U.S. at the time.
The organization’s EXALT Model B Single-Use Bronchoscope, designed for bedside procedures in the ICU and OR, completed its CE mark in May, then obtained FDA 510(k) clearance in August. The scope can be used for a wide range of bronchoscopy procedures such as secretion management, airway intubation, percutaneous tracheostomy, double lumen endotracheal tube placement, and biopsies. The device is offered in three sizes—slim, regular, and large—each designed to deliver suction performance and direct, precise imaging.
Also in August, CMS granted a New Technology Add-on Payment for single-use duodenoscopes, applicable to the EXALT Model D Single-Use Duodenoscope, as part of its Fiscal Year 2022 Hospital Inpatient Prospective Payment System. As of Oct. 1, 2021, CMS would provide hospitals with additional device reimbursement when Boston Scientific’s duodenoscope was used for eligible cases in the hospital inpatient setting.
In the last month of its 2021 fiscal year, the organization initiated the MODULAR ATP clinical trial to evaluate the safety, performance, and effectiveness of the mCRM Modular Therapy System. The mCRM System consists of two cardiac rhythm management devices intended to work together to coordinate therapy: the EMBLEM MRI Subcutaneous Implantable Defibrillator System and the EMPOWER Modular Pacing System, which is designed to be the first leadless pacemaker capable of delivering both bradycardia pacing support and antitachycardia pacing.
These products, whether developed in-house or acquired through an M&A transaction, will help ensure future growth. They expand an already robust product offering that resulted in substantial gains as it saw the return of elective procedures following the decreases experienced in fiscal 2020 due to the COVID-19 pandemic. In fact, every unit of Boston Scientific reported double-digit growth (with the exception of Specialty Pharmaceuticals, which only contributed $13 million before completion of its divestiture). Further, every unit finished ahead of 2019’s totals as well. As a whole, Boston Scientific finished its 2021 fiscal having gained 19.9% in revenue over 2020, translating to $11.89 billion in sales.
In its MedSurg segment, the tally was $3.72 billion, reflecting a 21.4% expansion. Within the group, Endoscopy increased by 20.3% to contribute $2.14 billion to the firm’s total. Sister unit Urology and Pelvic Health ballooned by 23.1% to end with $1.58 billion in sales.
The three units that make up the Rhythm and Neuro segment joined to post $3.29 billion in revenue. Cardiac Rhythm Management led the trio with $2.02 billion in revenue, a rebound of 18.5%. Electrophysiology offered $365 million to the company’s coffers, reflecting an impressive 27.4% growth over the prior year. The remaining division, Neuromodulation, brought in $909 million, which was 19.5 percent higher than 2020.
The pair of Cardiovascular units coupled for a company leading $4.86 billion contribution. This was an outstanding 25.3% gain. Interventional Cardiology saw an incredible 32.2% explosion in sales compared to the year prior. It posted $3.04 billion, which represented the highest total of any one single business unit. Its partner within the segment, Peripheral Interventions, grew 15.4% to finish with a revenue figure of $1.82 billion.
Unfortunately, Boston Scientific didn’t see all positives in 2021. In March, it settled pending legal claims made by most U.S. states regarding surgical mesh devices and alleged deceptive marketing. According to a Reuters article, the firm will pay $188.7 million as part of the agreement with 47 states and Washington, D.C. It also stated it would provide a more accurate description of the product to consumers, as well as share the safety and risks of using mesh.