Summary

• Boston Scientific Corporation (NYSE:BSX) is a developer, manufacturer, and marketer of medical devices.
• The Company’s segments include MedSurg and Cardiovascular. The MedSurg segment includes Endoscopy and Urology and Neuromodulation.
• Its Endoscopy business develops and manufactures devices to diagnose and treat a range of gastrointestinal and pulmonary conditions.
• It’s Urology and Neuromodulation business develops and manufactures devices to treat various urological, neurological movement disorders and pelvic conditions.
• The Cardiovascular segment include Interventional Cardiology and Peripheral Interventions.
• In 2022, the company experienced growth in sales, with total sales reaching $12,682 million. This marked an increase of $794 million or 6.7% compared to the sales figure of $11,888 million in 2021.
• The company's gross profit for 2022 amounted to $8,679 million, reflecting a difference of $551 million or 6.8% from the gross profit of $8,128 million in the previous year, 2021.
• Additionally, the company's operating profit increased in 2022, totaling $2,033 million, which was higher by $191 million or 10.5% compared to the operating profit of $1,824 million in 2021.
• The net profit for the year 2022 was $642 million, representing a decrease of $343 million or 25.9% compared to the net profit of $985 million in 2021.
• Moreover, the diluted earnings per share (EPS) for 2022 were reported as $0.45, which showed a decrease of $0.24 or 34.8% compared to the diluted EPS of $0.69 in 2021.

Brief Company Overview

Boston Scientific Corporation (NYSE:BSX) is a developer, manufacturer, and marketer of medical devices. The Company’s segments include MedSurg and Cardiovascular. The MedSurg segment includes Endoscopy and Urology and Neuromodulation. Its Endoscopy business develops and manufactures devices to diagnose and treat a range of gastrointestinal and pulmonary conditions. It’s Urology and Neuromodulation business develops and manufactures devices to treat various urological, neurological movement disorders and pelvic conditions. Its Cardiac Rhythm Management develops and manufactures a variety of implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities. The Cardiovascular segment include Interventional Cardiology and Peripheral Interventions. Its Interventional Cardiology develops and manufactures technologies for diagnosing and treating coronary artery disease and structural heart conditions. Its product offerings include 360 Clips and RESONATE, among others.

The company has manufacturing facilities in the US, Ireland, Costa Rica, Brazil, Malaysia and Puerto Rico. It sells products directly and also through a network of distributors and dealers in Europe, the Middle East, Africa, Asia Pacific and the Americas. Large group purchasing organizations, hospital networks, and other buying groups have become increasingly crucial to the company's business, representing a substantial portion of its revenue. Each business within the company maintains dedicated teams, focusing on physicians specializing in the diagnosis and treatment of various medical conditions, as well as key hospital service line administrators. Additionally, a network of distributors and dealers offers its products in specific countries and markets. The company is utilizing third-party distributors in those markets where establishing or maintaining a direct presence is neither economical nor strategic.

As of January 2024, the company had a 52-week share price range of $61.46 to $45.57. The forwarding P/E ratio of the company is 27.40 times, the price-to-sales ratio (ttm) is 6.48 times, the profit margin is 8.93%, the operating margin is 17.27%, the return on assets (ttm) is 4.41%, the return on equity is 6.68%, and the diluted earnings per share (ttm) is $.82.  The aggregate market value of the registrant’s common stock held by non-affiliates was approximately $53.2 billion based on the last reported sale price of $37.27 of the registrant’s common stock on the New York Stock Exchange on June 30, 2022. The number of shares outstanding of Common Stock, $0.01 par value per share, as of January 31, 2023 was 1,434,780,104.

Recent Developments

• On September 19, 2023, Boston Scientific Corporation (NYSE: BSX) officially announced its definitive agreement to acquire Relievant Medsystems, Inc., a privately held medical technology firm specializing in the development and commercialization of the Intracept® Intraosseous Nerve Ablation System for treating vertebrogenic pain.¹
• Boston Scientific has initiated the AVANT GUARD clinical trial to evaluate the safety and effectiveness of the Farapulse pulsed field ablation (PFA) system as a first-line treatment for persistent atrial fibrillation (AF), the only trial to study the use of PFA as frontline therapy in patients with this form of AF.²

Recent Financing Activities

• In March 2022, American Medical Systems Europe B.V. (AMS Europe), an indirect, wholly owned subsidiary of Boston Scientific, completed a registered public offering (the Offering) of €3.000 billion in aggregate principal amount of euro dominated senior notes comprised of €1.000 billion of 0.750% Senior Notes due 2025, €750 million of 1.375% Senior Notes due 2028, €750 million of 1.625% Senior Notes due 2031 and €500 million of 1.875% Senior Notes due 2034 (collectively, the Eurobonds).³

Financial Performance Highlights

Q2 2023 Highlights

In the third quarter of 2023, the company reported sales of $3,527 million, reflecting an increase of $357 million or 11.3% compared to the third quarter of 2022, which had sales of $3,170 million. The net profit for the third quarter of 2023 was $505 million, showing an increase of $331 million or 190.2% when compared to the net profit of $174 million in the third quarter of 2022. Furthermore, the company's diluted earnings per share (EPS) for the third quarter of 2023 increased to $0.34, a positive change of $0.22 or 183.3% compared to the diluted EPS of $0.12 in the third quarter of 2022.

Annual Performance Highlights

In 2022, the company experienced growth in sales, with total sales reaching $12,682 million. This marked an increase of $794 million or 6.7% compared to the sales figure of $11,888 million in 2021. The company's gross profit for 2022 amounted to $8,679 million, reflecting a difference of $551 million or 6.8% from the gross profit of $8,128 million in the previous year, 2021. Additionally, the company's operating profit increased in 2022, totaling $2,033 million, which was higher by $191 million or 10.5% compared to the operating profit of $1,824 million in 2021. The net profit for the year 2022 was $642 million, representing a decrease of $343 million or 25.9% compared to the net profit of $985 million in 2021. Moreover, the diluted earnings per share (EPS) for 2022 were reported as $0.45, which showed a decrease of $0.24 or 34.8% compared to the diluted EPS of $0.69 in 2021.

Top of Form

In 2022, the company generated net sales, reflecting operational growth of 11.1 percent, alongside a negative impact of 440 basis points from foreign currency fluctuations. The operational net sales growth included a positive impact of 240 basis points from acquisitions, such as Preventice Solutions, Inc. (Preventice), Farapulse, Inc. (Farapulse), the global surgical business of Lumenis, LTD (Lumenis), and Baylis Medical Company Inc. (Baylis Medical).

Within the Endoscopy product category, net sales were influenced by a negative impact of 440 basis points from foreign currency fluctuations. These changes were primarily attributed to the biliary franchise, notably driven by the AXIOS™ Stent and Delivery System, and the single-use imaging franchise, including the EXALT™ D Single-use Duodenoscope, as well as the infection prevention and hemostasis franchises.

In the Cardiology business, there was a negative impact of 510 basis points from foreign currency fluctuations. Operational net sales growth in this segment included a positive impact of 400 basis points from the acquisitions of Preventice, Farapulse, and Baylis Medical. Organic sales growth was propelled by the ongoing market expansion of Left Atrial Appendage Closure (LAAC) procedures with the WATCHMAN™ FLX LAAC Device, along with the performance of cardiac diagnostics franchise, POLARx™, Farapulse™ ablation systems, and percutaneous coronary intervention guidance franchises.

In the Peripheral Interventions business, sales growth was primarily driven by the Ranger™ Drug-Coated Balloon and Eluvia™ Drug-Eluting Stent System, as well as the interventional oncology franchise led by the Therasphere™ Y-90 Radioactive Glass Microspheres.Top of Form

Operating Activities: In 2022, cash provided by (used for) operating activities decreased $344 million compared to 2021. This decrease was primarily due to changes in working capital, including higher levels of inventory and accounts receivable. Cash provided by (used for) operating activities included litigation-related payments of $282 million in 2022, related primarily to transvaginal mesh litigation.

Investing Activities: In 2022, cash provided by (used for) investing activities primarily included net cash payments of $1.542 billion for the acquisitions of Baylis Medical and Obsidio, Inc, as well as Purchases of property, plant and equipment and internal use software of $588 million partially offset by Proceeds from settlements of hedge contracts of $56 million and Proceeds from royalty rights of $70 million.

Financing Activities: During the second quarter of 2022, the company completed a public offering, generating €3.000 billion in euro-dominated senior notes. The Offering yielded $3.270 billion in cash proceeds, net of investor discounts and issuance costs. The net proceeds were utilized to fund a tender offer and early redemption of $3.275 billion in certain outstanding senior notes, along with payment for accrued interest, tender premiums, fees, and expenses. In 2022, cash provided by financing activities also encompassed $335 million in payments for contingent consideration established in purchase accounting and $250 million in payments on short-term borrowings.

Business Overview

The company's core businesses are organized into two reportable segments: MedSurg and Cardiovascular, each offering innovative products and new developments.

1. ^ https://www.prnewswire.com/news-releases/boston-scientific-announces-agreement-to-acquire-relievant-medsystems-inc-301931674.html
2. ^ https://cardiacrhythmnews.com/avant-guard-clinical-trial-of-farapulse-pfa-system-begins/
3. ^ https://www.prnewswire.com/news-releases/boston-scientific-announces-completion-of-3-0-billion-offering-of-senior-notes-301498276.html