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5 days ago
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Boston Scientific halves expected tariff hit
This story was originally published on MedTech Dive. To receive daily news and insights, subscribe to our free daily MedTech Dive newsletter. By the numbers Q2 sales: $5.06 billion 22.8% growth year over year Cardiovascular sales: $3.35 billion 26.8% growth year over year Electrophysiology: $840 million 96.1% growth year over year Boston Scientific on Wednesday halved its expected tariff charge for the year, following other medtech companies that have cut outlooks on financial impacts from the Trump administration's policies. CFO Jonathan Monson told investors during a second-quarter earnings call that the company now expects a tariff charge of approximately $100 million. Boston Scientific forecast a charge of approximately $200 million during a first-quarter call in April; however, the company signaled at an investor event in May that it would likely update its forecast. Boston Scientific is the latest medtech firm to lower expected costs related to tariffs after companies across the industry projected that they would absorb hundreds of millions of dollars in additional costs during first-quarter earnings calls. Johnson & Johnson similarly halved its expected hit to $200 million, exclusively related to the company's medtech business, and Abbott said last week that it expects a $200 million charge, compared with a charge of 'a few hundred million.' The company expects the $100 million impact to predominantly take hold in the second half of the year. Boston Scientific increased its full-year sales guidance as part of the company's earnings release. It now expects sales growth for the year in a range of 18% to 19%, compared with a prior range of 15% to 17%. PFA success continues Boston Scientific reported another strong quarter for its electrophysiology group as pulsed field ablation devices continue to boost companies' portfolios. While not the triple-digit growth Boston Scientific has reported in prior quarters, its electrophysiology group still grew by 96% year over year to $840 million. Boston Scientific is growing the use of its Farapulse PFA system in new markets like Japan and China. CEO Mike Mahoney told investors that Boston Scientific was third to market in Japan, specifically, but is now the 'clear market leader' in the country. Mahoney added that the company is also in the 'very, very early days' in China and is placing a lot of emphasis on what could be a large market opportunity. The CEO also emphasized that Boston Scientific is growing its future PFA offerings through internal investment, as well as through its venture capital portfolio and partnerships. The company also recently won an expanded indication for Farapulse in people with persistent atrial fibrillation, when an abnormal heart rhythm continues for at least seven days, widening the pool of patients who are eligible for treatment. Boston Scientific's continued success comes amid a reignited race for market share in the PFA space. The new atrial fibrillation treatment is quickly overtaking traditional treatments like cryoablation and radiofrequency ablation. Johnson & Johnson reported last week that its electrophysiology business returned to growth in the second quarter, largely due to further PFA adoption. The unit grew year over year by 11%. Tim Schmid, J&J's worldwide chairman of medtech, told investors on an earnings call that the company is not 'rolling over' when it comes to electrophysiology. 'Given that we created the [electrophysiology] category, for us, this one is very personal,' Schmid said. 'And while I know that several analysts were quick to write us off earlier this year, we continue to remain very confident in our ability to retain our global market leadership position over the long term.' Mahoney, on Wednesday's call, was similarly bullish on Boston Scientific's ambitions in electrophysiology. 'We not only want to be the clear leader [in] PFA,' Mahoney said, 'but our aim is to be the overall leader in [electrophysiology] in the future.' Recommended Reading 'We are not rolling over': J&J electrophysiology unit rebounds amid PFA rivalry
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6 days ago
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BSX Q2 Deep Dive: Cardiovascular Momentum, New Technologies, and Global Expansion Shape Outlook
Medical device company Boston Scientific (NYSE:BSX) reported Q2 CY2025 results topping the market's revenue expectations , with sales up 22.8% year on year to $5.06 billion. Guidance for next quarter's revenue was optimistic at $4.97 billion at the midpoint, 2.2% above analysts' estimates. Its non-GAAP profit of $0.75 per share was 4.1% above analysts' consensus estimates. Is now the time to buy BSX? Find out in our full research report (it's free). Boston Scientific (BSX) Q2 CY2025 Highlights: Revenue: $5.06 billion vs analyst estimates of $4.89 billion (22.8% year-on-year growth, 3.4% beat) Adjusted EPS: $0.75 vs analyst estimates of $0.73 (4.1% beat) Adjusted EBITDA: $1.51 billion vs analyst estimates of $1.43 billion (29.8% margin, 5.3% beat) Revenue Guidance for Q3 CY2025 is $4.97 billion at the midpoint, above analyst estimates of $4.86 billion Management raised its full-year Adjusted EPS guidance to $2.97 at the midpoint, a 2.2% increase Operating Margin: 16.2%, up from 12.6% in the same quarter last year Organic Revenue rose 17.4% year on year (14.7% in the same quarter last year) Market Capitalization: $159.4 billion StockStory's Take Boston Scientific's second quarter results reflected broad-based strength, with operational sales rising sharply and organic growth notably outpacing the company's underlying market rates. Management attributed the quarter's outperformance to the Cardiovascular segment, particularly the rapid adoption of FARAPULSE for atrial fibrillation and the sustained momentum of the WATCHMAN device. CEO Michael Mahoney highlighted that the 'reliability and trust that the physician community and referring physicians have in [WATCHMAN], along with our clinical and sales team, is driving that.' The company also cited double-digit growth in several international markets and ongoing commercial execution as key contributors to strong top-line and adjusted profitability. Looking ahead, Boston Scientific's updated guidance is grounded in expectations for continued expansion in core cardiovascular therapies, additional product launches, and further international market penetration. Management emphasized that ongoing investments in research and development, as well as anticipated regulatory approvals for devices such as the EMPOWER leadless pacemaker and expanded indications for FARAPULSE, are set to support the company's growth trajectory. CFO Jonathan Monson stated, 'We now expect to expand full year adjusted operating margin by 75 to 100 basis points while increasing our level of investment in R&D to fuel durable, differentiated revenue growth.' Key Insights from Management's Remarks Management pointed to product innovation and market adoption in cardiovascular therapies as the primary drivers of recent performance, while also addressing operational challenges from product discontinuations and tariffs. Cardiovascular growth surge: The Cardiovascular segment led company growth, fueled by strong demand for FARAPULSE (a pulsed field ablation system for atrial fibrillation) and robust performance of the WATCHMAN left atrial appendage closure device. New labeling and expanded indications, particularly in Japan and the U.S., supported broader adoption. WATCHMAN and concomitant procedures: WATCHMAN's uptake was enhanced by the trend toward concomitant procedures, where atrial fibrillation ablation and appendage closure are performed together. Over 60% of U.S. electrophysiologists using WATCHMAN are adopting this approach, following recent clinical data and reimbursement changes. Management expects ongoing growth as clinical evidence and payer support evolve. Impact of product discontinuation: The global discontinuation of the ACURATE valve led to inventory write-downs and pressured gross margins. However, management highlighted that strong revenue growth and 'spend control' offset these headwinds, keeping full-year margin guidance intact. Geographic diversification: The Asia Pacific region posted double-digit growth, led by Japan and China, where new product launches and expanded clinical indications contributed. The company expects mid-teens growth in China to continue, citing the diversification of its portfolio and ongoing investment in commercial capabilities. Strategic acquisitions: Recent acquisitions of SoniVie (ultrasound-based therapy for hypertension) and Intera Oncology (liver cancer therapies) are intended to strengthen the company's portfolio in targeted adjacencies. Management noted that these additions align with Boston Scientific's strategy to address large, growing end markets and complement existing franchises. Drivers of Future Performance Boston Scientific's forward outlook is anchored by continued innovation, expanded product approvals, and a focus on international growth, balanced against expected tariff and reimbursement headwinds. Expanded product indications: Management anticipates growth from regulatory approvals for new devices and expanded indications, including the expected launch of the EMPOWER leadless pacemaker and additional labeling for FARAPULSE in Japan and China. These approvals are seen as key to increasing the company's addressable market and supporting durable revenue growth. Ongoing R&D and investment: The company plans to maintain elevated investment in research and development, particularly to accelerate clinical trials and support upcoming product launches. This includes expanding clinical evidence for products such as FARAPULSE and WATCHMAN, which management believes will reinforce competitive positioning. External pressures and risk management: Tariffs and reimbursement changes—such as proposed cuts to Medicare payments for certain cardiac procedures—present headwinds. Management stated that they expect a $100 million tariff headwind for the year but intend to offset these impacts through sales mix improvements and expense discipline. They also acknowledged the need for ongoing engagement with medical societies to address reimbursement challenges. Catalysts in Upcoming Quarters Looking ahead, the StockStory team will focus on (1) the pace and commercial impact of new product launches and regulatory approvals, (2) the sustainability of double-digit growth in key international markets such as China and Japan, and (3) the company's ability to manage margin pressures from tariffs and reimbursement changes. Progress in integrating recent acquisitions and execution on clinical trial milestones will also be important indicators. Boston Scientific currently trades at $108.70, up from $103.22 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it's free). Our Favorite Stocks Right Now When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that's already erased most losses. Don't let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. 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