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How Is BSX Overcoming Its Peripheral Headwinds in 2019?

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Peripheral Interventions

On its first-quarter earnings conference call, Boston Scientific (BSX) guided for its PI (Peripheral Interventions) business to report YoY (year-over-year) organic revenue growth, which in turn will be accretive to the company’s overall revenue growth rate in 2019 despite headwinds related to paclitaxel-coated devices.

In the first quarter, the company reported revenue of $311 million for its PI business, a YoY rise of 11.2% on an organic basis and a rise of 7.9% on a reported basis. The increased regulatory scrutiny of paclitaxel-coated devices, which includes the company’s drug-eluting stent, Eluvia, affected the company’s revenue performance in the second half of the first quarter.

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Growth strategy

Boston Scientific expects the ongoing launch of Eluvia in Japan, the FDA’s approval of the Vici Venous Stent System for the treatment of iliofemoral venous obstructive disease, and the closure of the BTG acquisition to be key growth drivers for its PI business.

On May 6, 2019, Boston Scientific issued a press release announcing the FDA’s approval of the Vici Venous Stent System, which was added to its portfolio via its acquisition of Veniti, which it announced in August 2018.

On its first-quarter earnings conference call, Boston Scientific also said that it expects to bolster its PI portfolio via its acquisition of BTG, which should complete in mid-2019. The company first announced this transaction, valued at $4.2 billion, in November 2018 and secured shareholder approval for it in February 2019. In the 12 months that ended on March 31, 2019, BTG managed to grow its oncology and vascular portfolio revenue by 15%–17% YoY, in line with its guidance, while it grew its specialty pharmaceutical portfolio revenue in the double digits, which was ahead of its guidance. Boston Scientific aims to repay debt worth $1.0 billion in the first 18 months of the deal’s closure and to reach a debt-to-EBITDA ratio of 2.5x within two years of the deal’s closure.

According to its first-quarter earnings conference call, Boston Scientific hasn’t included the contribution from BTG in its 2019 guidance. The company plans to update the guidance after the closure of the deal.

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