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How Is BSX Overcoming Its Urology and Pelvic Health Headwinds?

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Jun. 13 2019, Updated 10:52 a.m. ET

Urology and pelvic health business

On its first-quarter earnings conference call, Boston Scientific (BSX) said that it expected its Urology and Pelvic Health business’s revenue performance to prove accretive to its revenue in the second half and the whole of 2019. The company expects the resolution of its sterilization issues and its acquisitions of NxThera and Augmenix to drive its Urology and Pelvic Health revenue in 2019.

In the first quarter, the company reported Urology and Pelvic Health revenue of $326 million, YoY (year-over-year) rises of 11.4% on a reported basis, 13.6% on an operational basis, and 4.6% on an organic basis.

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Major headwinds

According to its first-quarter earnings conference call, Boston Scientific’s Urology and Pelvic Health revenue suffered in the first quarter partly due to the mandated shutdown of a third-party sterilization facility in Illinois for the company’s men’s health product lines. Although the company secured FDA approval to conduct in-house sterilization of its men’s health products in March 2019, it expects to return to a full supply only at the end of the second quarter.

On April 16, the FDA issued a press release asking all manufacturers to halt the sale and distribution of surgical mesh products in the US. The press release also highlighted the FDA’s rejection of Boston Scientific’s premarket approval application for its transvaginal surgical mesh products indicated for pelvic organ prolapse.

Thereafter, on its first-quarter earnings conference call, Boston Scientific guided for a revenue impact of -$30 million associated with its withdrawal from the surgical mesh business in 2019. While -$5 million worth of the impact was reported in the first quarter, the company expects the remaining -$25 million impact to be spread across the remaining quarters of 2019. The company has also guided for a -$0.02 impact to its adjusted EPS in 2019, of which it booked -$0.01 in the first quarter. The company also guided for an impact of -30 basis points on its organic revenue growth rate in the first quarter and in 2019.

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