A Quick Snapshot of Boston Scientific’s Rhythm Management & Neuro Segment

by Trefis Team
Boston Scientific
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Boston Scientific’s (NYSE:BSX) Rhythm Management & Neuro segment accounts for around 30% of the company’s value, according to our estimates. The segment primarily includes products such as pacemakers, implantable cardioverter defibrillators (ICDs), and electrophysiology products. The segment has been facing headwinds in the recent past amid growing competition from Abbott. The company restructured its segments in Q1, and Rhythm Management & Neuro segment now also includes Neuromodulation, which has seen double digit growth in the recent years. We have created an interactive dashboard highlighting the company’s Rhythm Management & Neuro segment. You can adjust revenue drivers and margins for 2018 and 2019 to see how it impacts the company’s overall revenues and income. Below we discuss our expectations and forecasts for the segment.

Expect Steady Growth In Rhythm Management & Neuro Segment

We believe that the segment’s sales will grow at an average annual rate of 4% in the coming years. This growth should be driven by Boston Scientific’s new product launches, which should allow the company to protect its market share to an extent. Within the segment, Neuromodulation is growing at a faster pace, with Q1 revenues up close to 20%, led by the U.S. launch of WaveWriter Spinal Cord Stim system, and Vercise Deep Brain Stimulation platforms. 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%. We also believe that the overall market will continue to grow driven by a growing population and other health and healthcare-related factors, especially in emerging markets. Additionally, increasing wealth and disposable income have allowed more consumers in these markets to afford healthcare. The global cardiac rhythm management (CRM) devices market is expected to grow at a CAGR of 7.80% over the next few years, according to a recent report published by Grand View Research.

It should also be noted that Boston Scientific’s Rhythm Management is facing stiff competition from other players, especially Abbott. 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. Also, regulatory investigations by the U.S. Department of Justice have laid down stricter eligibility requirements for the use of Cardiac Rhythm Management devices. These limitations are likely to negatively impact market growth. Given these factors, we forecast only a low-to-mid-single digit growth for the segment. 


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