Cardiovascular And MedSurg Segments Likely Drove Boston Scientific’s Growth In Q4’16

Leading medical device maker Boston Scientific (NYSE:BSX) is set to report its Q4 2016 on February 2nd. In the previous quarter, the company reported strong growth in its Cardiovascular and MedSurg segments and a decrease in its SG&A expense, which together drove its earnings growth. The company likely witnessed a similar growth trend in Q4 as well. We can expect the strong adoption of newly approved products to have driven the company’s growth in cardiovascular and interventional cardiology segments. Boston Scientific’s broad portfolio of products tend to support a stable revenue growth across other segments. The following factors have likely contributed to the company’s growth in Q4’16:

Strong product demand in the Cardiovascular and Interventional cardiology segments: The company’s growth in these segments has likely been driven by an increased acceptance of newly approved products. Boston Scientific must have witnessed an increased demand of Emblem S-ICD, especially in the U.S. Given that the company only recently got the FDA approval for Emblem S-ICD, the scope for increasing its market penetration is ample. Furthermore, the strong demand for Lotus and Watchman products has likely continued in Q4 as well. The other major product that must have added to the company’s growth is the Synergy DES, which is currently gaining market share over Abbott’s Absorb on the grounds of increased perception of safety.

Strong performance in the MedSurg Segment: In the previous quarter, Boston Scientific posted an organic growth of 10% for the segment. The growth trend in this segment likely continued in Q4 as well, led by the endoscopy segment. Boston Scientific’s growth in this segment is being driven by its recent acquisitions. In June 2016, Boston Scientific announced the acquisition of the LumenR™ Tissue Retractor System from LumenR LLC for an undisclosed amount. Further, the company recently completed the acquisition of Endochoice in a deal valued at $210 million. In addition, the company had acquired Xlumena in 2015. All these acquisitions have significantly broadened Boston Scientific’s MedSurg portfolio, resulting in incremental revenues for the company. We can expect Boston Scientific to continue with its acquisitions going into next fiscal year. This helps the company to fill-in the product gaps. Moreover, such acquisitions can be easily integrated and the revenue and cost synergies are more quickly realized.

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