New Products like Watchman and SpyGlass main driver of strong Q2 for Boston Scientific
Boston Scientific Announced its Results For Second Quarter 2015 yesterday. Boston Scientific Corporation (NYSE: BSX) generated sales of $1.843 billion during the second quarter ended June 30, 2015, compared to the company's guidance range for the quarter of $1.800 to $1.850 billion. This represents 6 percent operational revenue growth (constant currency basis, excluding divested businesses) and a decrease of 2 percent on a reported basis, all compared to the prior year period. From the reports of the company's Q2 2015 earnings it became clear that new products are substantial part of the good performance. New Boston Scientific devices on the market include the latest generation of its S-ICD subcutaneous implantable defibrillator, SpyGlass DS endoscope, NOVI spinal cord stimulation system and the Watchman to prevent stroke.Watchman is the most notable new device because it has no direct competitors and received the FDA's stringent PMA approval, overcoming a previous FDA rejection.The atrial appendage closure device is meant to provide a mechanical alternative to the blood thinner warfarin as a means of preventing stroke.Due to its challenging implantation procedure, Boston Scientific promised a slow rollout of the device in the U.S. and a strong training program. Company representatives said it's slightly ahead of schedule in terms of its year-end goal of driving 100 large account openings in the U.S.Wall Street analysts were keen to learn more about the device's reimbursement. In the coming months, Boston Scientific expects to hear word on a Centers for Medicare & Medicare Services National Coverage Decision, as well as bonus reimbursement given to new technology (known as add-on payments).Meanwhile, the SpyGlass DS fueled a 6% year-over-year increase in quarterly endoscopy sales (excluding the negative effect of foreign currency exchange rate fluctuations) to $333 million, as did the Axios Stent System from recently acquired Xlumema.Endoscopy is part of Boston Scientific's MedSurg unit, which saw quarterly sales increase 7% at constant currencies to $583 million. The company's urology business will receive an influx of new devices following the expected closure of its acquisition of several AMS men's health devices in Q3.One area of weakness was pacemakers, which contributed to flat rhythm management sales for $517 million at constant currencies. "Worldwide pacer sales totaled $125 million and declined 4%," said Boston Scientific CFO Daniel Brennan during the earnings call. "The decline was primarily U.S. driven as we experienced share loss to competitors with MRI safe capabilities. We expect to have our MRI compatible pacemaker approved in the U.S. in Q4 of this year."Cardiovascular devices was the top performing unit with a constant-currency sales increase of 10% to $743 million. Leerink analysts said the increase is supportive of their view that the next-generation, partially bioabsorbable Synergy Stent is on track for better-than-expected market share gains in Europe, where it already has a 30% share. U.S. approval is expected in the second half of the year.And just prior to the earnings call, Boston Scientific revealed plans for a fully bioresorbable stent. A leadless pacemaker is also in the works.Overall, the company reported quarterly net sales of $1.84 billion, a 6% increase at constant currencies. When exchange rate fluctuations are included, sales fell 2%, reflecting the detrimental impact of the strengthening dollar.Quarterly net income was $102 million.Leerink analysts said Boston Scientific had a solid quarter: "In 2Q15, BSX continued its sales turnaround story, delivering meaningful growth reacceleration relative to the prior-year-period constant currency growth of just 2%, as recent new product launches gain traction and end-user markets stabilize."
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