A Look at Boston Scientific’s Gross Margin in 2019



Margin guidance

On its first-quarter earnings conference call, Boston Scientific (BSX) reiterated its adjusted gross margin guidance of 72%–73% for 2019. The company expects a favorable impact of 50 basis points on its 2019 adjusted gross margin due to foreign exchange fluctuations.

In the first quarter, Boston Scientific reported an adjusted gross margin of 71.4%, lower than its guidance of 72%–73% and 90 basis points lower YoY (year-over-year). According to the company’s first-quarter earnings conference call, this decline was attributable to unfavorable changes in product mix coupled with unfavorable manufacturing variances.

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Analysts expect Boston Scientific’s adjusted gross margin to expand 19 basis points YoY to 72.46% in 2019, 31 basis points to 72.78% in 2020, and 23 basis points to 73.01% in 2021.

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Second-quarter performance

In the second quarter, Boston Scientific guided for an adjusted gross margin in the range of 72%–73% and an adjusted operating margin in the range of 25%–26%. Analysts expect Boston Scientific’s adjusted gross margin to expand 93 basis points YoY to 72.22% in the second quarter, 19 basis points to 72.90% in the third quarter, and 31 basis points to 73.09% in the fourth quarter of 2019.

Eluvia challenges

In January 2019, the FDA issued a press release to healthcare providers to point out concerns about increased mortality rates associated with the use of paclitaxel-coated balloons and paclitaxel-eluting stents for treating PAD (peripheral arterial disease) of the femoropopliteal artery. In March 2019, the FDA issued a press release highlighting the potential association of increased mortality with the use of paclitaxel-coated products for treating PAD based on a preliminary analysis of the long-term follow-up data from randomized trials.

The FDA plans to make recommendations on these observations in a meeting of the Circulatory System Devices Panel scheduled for June 19 and June 20, 2019. These regulatory concerns affected the uptake of Boston Scientific’s drug-eluting vascular stent system, Eluvia, in the second half of the first quarter of 2019.


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