What the FDA gives, it can also take away—and in the past week, Boston Scientific has seen both.
The agency has approved the company’s long-awaited Lotus Edge aortic valve system for high-risk patients; the transcatheter replacement system is now the only FDA-approved heart valve that allows surgeons to reposition or recapture the valve after it has been fully deployed.
But this month the FDA also ordered Boston Scientific, alongside devicemaker Coloplast, to immediately halt their sales of transvaginal mesh used to repair pelvic organ prolapse following years of safety reports, lawsuits and settlements related to the procedure.
Those highs and lows coincided with the release of the company’s first-quarter earnings report, in which Boston Scientific just missed analysts’ expectations, sending its shares down by as much as 4% in premarket trading.
The company brought in $2.493 billion in sales, a growth of 4.8% on a reported basis—or 6.3% when excluding currency fluctuations and sales from Boston Scientific’s 2018 acquisition spree of NxThera, Claret Medical and Augmenix, which had no comparable sales for the previous year.
Adjusted earnings per share for the quarter reached $0.35, up from last year’s $0.33, but below Wall Street’s expectations by one cent. In addition, Boston Scientific narrowed and lowered its guidance for the year, to 7% to 8% growth, compared to the 7% to 9% it predicted last quarter. After the markets opened, the company’s stock had climbed back to just within a percentage point of the previous close, at around $35.55.
"Our global team and differentiated portfolio enabled us to deliver good sales and earnings growth this quarter, despite some revenue softness compared to our estimates," Boston Scientific Chairman and CEO Mike Mahoney said in a statement.
"With our strong pipeline and category leadership strategy, we are confident in our top tier 2019 outlook and how we can help improve outcomes for patients around the world for years to come," Mahoney added.
With growth in all segments compared to last year’s first quarter, the company’s MedSurg division led the pack with a 7.7% increase, compared to 2.8% in rhythm and neuromodulation devices and 4.2% in cardiovascular products.
But that could change with the addition of the newly approved Lotus Edge heart valve, with its approval announced in the 24 hours before the earnings release. The device features a braided frame and an adaptive seal that aims to minimize leaks by conforming to the patient’s native valve.
"Bringing the much-anticipated Lotus Edge valve system to market allows us to provide patients who aren't good candidates for traditional surgery a safe and effective treatment alternative to restore proper function to their severely narrowed aortic valve," said Kevin Ballinger, global president of interventional cardiology. Boston Scientific began a controlled launch of the device in Europe in March, and said it plans to do the same in the U.S. in the coming weeks.
Regarding its transvaginal mesh products—including its Uphold Lite Vaginal Support System, Xenform Soft Tissue Repair Matrix, Pinnacle Lite Posterior and Polyform devices—the company said it was “deeply disappointed” by the FDA’s decision, and that it would halt not just U.S. sales, but international ones as well.
However, Boston Scientific also made it clear the agency’s order did not apply to surgical mesh used to treat stress urinary incontinence or transabdominal repair.
As a result, the company said it expects to lose about $30 million globally over the course of 2019, including about $5 million in a sales return reserve recorded in the first quarter. Its adjusted net income dropped $11 million in the first quarter, as well.