Boston Scientific Sees Strong Growth Across Segments In Q1

by Trefis Team
Boston Scientific
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Boston Scientific (NYSE:BSX) recently posted a better than expected Q1 performance with a 10% jump in sales, led by strong growth across its segments. The company now includes Neuromodulation in Rhythm Management & Neuro segment, while it was earlier part of the MedSurg segment. Our updated model reflects this change. The company raised its full year EPS guidance to the $1.37 – $1.41 range. However, we forecast the EPS to $1.36. We have created an interactive dashboard of the company’s expected performance in 2018. You can adjust the revenue and margin drivers to see the impact on the company’s performance.

Expect All Segments To See Steady Growth In 2018

We now expect Boston Scientific’s MedSurg revenue to grow by 9% in 2018, led by a continued growth in both Endoscopy, as well as Urology/Women’s Health. Both of these saw a low double digit revenue growth in Q1. We continue to believe that the segment growth will be bolstered by the introduction of new products, and a ramp up in the recently launched products, which includes spyglass, a visualization system to treat Pancreatico-biliary diseases, and Resolution 360, which helps prevent bleeding during endoscopic procedures. 

In the Cardiovascular segment, we expect revenues to grow around 7% in 2018, driven by continued growth for Synergy, and Promus stents. In addition, the peripheral interventions sales are also seeing good growth, with Q1 sales up over 10% on a reported basis. The company’s management stated that its drug-eluting technologies, including Ranger DCB, Eluvia DES, and JetStream atherectomies platform, are performing well in the European market, and the company plans to launch these products in the U.S. over the next couple of years. 

Looking at Boston Scientific’s Rhythm Management & Neuro segment, we now forecast revenues to grow in mid-single-digits in 2018, as compared to our earlier forecast of low-single-digits. This can be attributed to the change in reporting structure, as the company now includes Neuromodulation within Rhythm Management & Neuro segment. Neuromodulation is growing at a faster pace, with Q1 revenues up close to 20%, and we expect the full year revenues to grow by 12%. This can be attributed to the U.S. launch of WaveWriter Spinal Cord Stim system, and Vercise Deep Brain Stimulation platforms. Neuro performed even better outside the U.S., with 30% plus growth in Q1. We expect this trend to continue in the near term, and Neuro in particular will aid the overall growth rate for the segment, given that Cardiac Rhythm Management (CRM) revenues are estimated to grow only by 3%. It should be noted that the company’s CRM has been facing some pressure due to growing competition from Abbott in the recent past. Through the acquisition of St. Jude Medical, Abbott has significantly strengthened its cardiovascular business, and it will likely pose a major competitive threat to Boston Scientific going forward. Having said that, the company’s Resonate platform, which saw a double-digit growth in Q1, is expected to perform well in 2018, and beyond. 


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