Q3 2024 Earnings Summary
- FARAPULSE is exceeding expectations, with Boston Scientific now expecting PFA to likely exceed their previously communicated range of 40% to 60% of global AF ablations by 2026 due to rapid adoption and strong clinical outcomes.
- The new reimbursement for concomitant WATCHMAN and PFA ablation is anticipated to provide a long-term tailwind for the WATCHMAN franchise. If the upcoming OPTION trial shows compelling benefits, it could meaningfully alter usage patterns ahead of the CHAMPION trial results expected in the first half of 2026.
- Boston Scientific expects to maintain category leadership in pulse field ablation despite upcoming competition, owing to the compelling ease of use and extensive clinical trial data supporting their FARAPULSE system, which has treated over 125,000 patients globally.
- The AVANT GUARD clinical trial evaluating FARAPULSE in drug-naive persistent atrial fibrillation patients has been temporarily paused to assess "a few unanticipated observations," raising concerns about potential safety or efficacy issues.
- The core Cardiac Rhythm Management (CRM) business experienced "below market growth in the U.S.," despite strong international growth, indicating challenges in the domestic market.
- The global Spinal Cord Stimulation (SCS) performance was "below our expectations in a market that continues to be challenged," suggesting ongoing difficulties in this segment.
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Reported Revenue Growth | Q3 2024 | 13% to 15% year-over-year | 19.3% year-over-year (derived from 4,209Vs. 3,527) | Beat |
Operational Revenue Growth | Q3 2024 | 14% to 16% year-over-year | 19.3% year-over-year (derived from 4,209Vs. 3,527) | Beat |
Organic Revenue Growth | Q3 2024 | 13% to 15% year-over-year | 19.3% year-over-year (derived from 4,209Vs. 3,527) | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
FARAPULSE / PFA | Consistent focus in Q4 2023–Q2 2024, emphasizing market leadership and clinical advantages driving growth. | Strong adoption with over 125,000 patients treated globally, poised to capture or exceed 40%-60% share. Also mentioned AVANT GUARD pause (new population). | Continues to be a key growth driver with bullish sentiment and broad global uptake. |
Margin Expansion | Previous calls (Q4 2023–Q2 2024) showed similar steady improvement (around 26%-26.6%) and outlined a goal of 150 bps improvement by 2026. | Adjusted operating margin 27.2%, up 110 bps year-over-year, despite FX headwinds. | Ongoing progress driven by operational discipline and reinvestment. |
WATCHMAN & Reimbursement | Referenced in Q4 2023–Q2 2024 with double-digit growth and expanding global adoption, helped by reimbursement tailwinds. | WATCHMAN sales grew 18%. Introduced new DRG for concomitant LAAC + AF ablation. | Consistent upward trend, fueled by new reimbursement policies. |
ACURATE TAVR US | Q4 2023 guidance indicated delays until at least late 2024/early 2025. Q2 2024 calls also noted uncertainty. | No mention of new updates on delays or uncertainty this quarter. | No new developments, remains uncertain. |
Gross Margin Pressures | Q2 2024 call highlighted inventory charges (PolarX) that pressured margins. Q1 2024 also noted product mix concerns. | No specific mention of inventory charges or product mix issues; minor FX impact on gross margin. | Less emphasis in Q3, appears less acute now. |
China & Japan Expansion | Q2 2024 mention of double-digit APAC growth; VBP was noted as a pricing challenge but not derailing performances. | FARAPULSE launching soon in Japan, China approvals moving slower but still a focus despite VBP headwinds. | Continued global rollout with cautious optimism, especially in China. |
AVANT GUARD Trial | Not mentioned in Q4 2023–Q2 2024 transcripts. | Enrollment paused due to unexpected findings in a new patient population, but no major safety concerns. | New topic, cautious but confident stance. |
Emerging PFA Competition | Q2 2024 call expressed confidence despite new entrants, citing robust FARAPULSE data and physician adoption. | Competitors launching bundled systems with mapping; FARAPULSE remains an open system. | Still bullish on differentiation and strong real-world evidence. |
EP Portfolio Gaps | Q2 2024 noted ongoing mapping and ICE developments; Q1 2024 had minimal specifics. | Acknowledged missing instruments (e.g., ICE catheters), but plans to fill gaps over time. | Recognized need for a more comprehensive EP offering. |
Mature Markets (IC, CRM) | Prior quarters cited stable IC and CRM performance, driven by product innovation (Q2 2024: mid-single-digit growth in CRM, double-digit in IC). | IC grew 14%, CRM up 2%, with future product launches expected to support growth. | Steady demand in mature segments, moderate growth continues. |
Strategic Acquisitions | Previously underscored tuck-in M&A priority: Axonics, Relievant, etc., fueling pipeline (Q4 2023–Q2 2024). | Highlighted Silk Road Medical and upcoming Axonics deal to broaden portfolio. | Ongoing M&A strategy to enhance category leadership. |
Raised & Reaffirmed Guidance | Regular upward revisions from Q1/Q2 2024; consistently improving outlook. | Full-year 2024 organic revenue growth raised to ~15%, EPS to $2.45-$2.47. | Bullish forecast, reflecting strong execution. |
PolarX Displacement | Q2 2024 noted inventory charges tied to PolarX displacement as FARAPULSE adoption surged. | Not mentioned in Q3 2024. | No current update, overshadowed by FARAPULSE success. |
Reinvestment & Discipline | Similar strategy detailed in Q4 2023–Q2 2024, pairing top-line growth with cost controls. | Emphasized operational discipline (110 bps margin expansion) while reinvesting in R&D and manufacturing. | Continues as a core approach for margin improvement. |
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AVANT GUARD Trial Pause
Q: Is there any safety concern with FARAPULSE after pausing the AVANT GUARD trial?
A: Management reassured that they are highly confident in the safety of the FARAPULSE system . The AVANT GUARD trial was temporarily paused due to unanticipated observations in a new patient population—drug-naïve patients with persistent atrial fibrillation—not previously studied . These observations were not life-threatening, and they intend to resume enrollment in the near term . The pause does not affect their overall confidence in FARAPULSE's performance, which has been used to treat over 125,000 patients globally . -
2025 Growth Outlook
Q: What are the key growth drivers and expectations for 2025 sales?
A: Management is excited about growth prospects for 2025, anticipating continued above-market sales growth. Key drivers include the strong performance of FARAPULSE and WATCHMAN, with upcoming launches in Japan and China expected to fuel further growth. They also highlighted robust contributions from other divisions like PI, ICTX, and Neurology, which are commonly growing in double digits. -
Maintaining Leadership Amidst Competition
Q: How will FARAPULSE retain its market leadership with new competitors entering PFA ablation?
A: FARAPULSE's leadership is expected to continue due to its ease of use, extensive clinical data, and superior safety and efficacy outcomes. Physicians prefer FARAPULSE for its straightforward nature and have not switched back to thermal ablation after using it. The FARAVIEW mapping system, designed around PFA, further enhances its unique advantages. -
Manufacturing Capacity and System Constraints
Q: Are there any capacity or supply constraints for FARAPULSE given its high demand?
A: Management confirmed there are no supply issues and praised the operations team for meeting the high demand . Despite the rapid adoption, they do not anticipate any manufacturing capacity shortages next year. Hospitals are also improving workflow efficiency, performing 25–30% more procedures per day with FARAPULSE. -
Mapping System Strategy
Q: Will the FARAWAVE NAV Catheter be exclusive to Boston Scientific's mapping system?
A: While the FARAWAVE NAV Catheter integrates with their refreshed OPL HDx mapping system, Boston Scientific will not force exclusivity. Physicians can continue using FARAPULSE with competitive mapping systems if they prefer. They believe the compelling advantages of their system will naturally attract users. -
TAVR Strategy and ACURATE neo2
Q: What is the regulatory strategy for ACURATE neo2 in the U.S.?
A: The ACURATE neo2 trial data will be presented at TCT on October 30, marking an important milestone. Management plans to discuss the broader cardiology portfolio and post-data plans at an investor meeting. They have seen excellent momentum with ACURATE neo2 in Europe and aim to grow the business in the U.S.. -
Gross Margin Outlook
Q: How does management view gross margin trends and leverage in the model for 2025?
A: Gross margin in Q3 was slightly below expectations due to foreign exchange impacts. While full-year adjusted gross margin may be below the prior year, management continues to drive operating margin expansion through all P&L lines. Going into 2025, they expect product mix—including contributions from FARAPULSE and WATCHMAN—to improve gross margins and support overall profitability. -
Performance of Other Franchises
Q: How are the other business units performing amid focus on FARAPULSE and WATCHMAN?
A: Boston Scientific's decentralized structure ensures focused attention on all divisions. Leaders dedicate themselves to their specific areas, with teams that think about their markets all day. Despite resource allocation to FARAPULSE, they have maintained investments in other businesses, which are the company's foundation. They reported strong performance across divisions, with some growing in double digits. -
China Launch and VBP Impact
Q: What is the outlook for FARAPULSE in China, and how are VBPs affecting the business?
A: The China launch of FARAPULSE is expected to be slower due to approvals and launch cadence. However, they anticipate a strong launch in Japan. Despite significant VBP headwinds impacting certain franchises, the China team continues to grow at the company average, outperforming peers facing tougher results. -
Price Premium on NAV Catheter
Q: Will the FARAWAVE NAV Catheter have a price premium due to its advanced technology?
A: Management did not comment on specific pricing for the NAV Catheter. They emphasized the catheter's compelling ease of use and integrated features that provide unique advantages.