Though sales are up, Boston Scientific's net Q1 profit shrinks to $11M in the face of COVID-19

Though its first-quarter sales were up—due in no small part to the closure of its $4.2 billion acquisition of BTG last year—Boston Scientific’s total net income shrank down to a slim margin compared to 2019’s lead-off quarter.

As the novel coronavirus spread across the world over the past months, forcing many hospitals and patients to forgo less urgent medical procedures, Boston Scientific posted a net income of $11 million, or one penny per share, compared to the $424 million it saw last year.

Newly acquired products from BTG—which include a host of peripheral interventions—as well as those from its $465 million deal for spine-spacer developer Vertiflex had a 6.1% positive impact on Boston Scientific’s bottom line.

Reported net sales totaled $2.54 billion, up 2% compared to last year’s $2.49 billion. But without those added products, and minus the impact of foreign currency fluctuations, sales would have been down 2.9%, the company said. Meanwhile, overall operating expenses rose from $1.22 billion to $1.59 billion.

Cardiovascular sales saw 5.5% growth from $972 million to over $1.02 billion, with a boost from BTG’s portfolio of vascular filters, catheters and clot-dissolving systems aimed at treating cancers and pulmonary embolisms. Meanwhile, heart rhythm management and electrophysiology sales dropped 11% and 6.2%, respectively, as surgeries have been postponed.

"During this global pandemic, we are grounded in the urgency of providing important medical products and therapies to those who need them—in particular, many patients with acute needs," Boston Scientific Chairman and CEO Mike Mahoney said in a statement.

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To help address COVID-19, the company worked with the University of Minnesota to develop the Coventor emergency resuscitator as a ventilator alternative and received an FDA authorization in mid-April. It has also been working on reusable personal respirators and the production of face shields.

"We continue to balance short-term adjustments to our plans while strengthening our long-term strategy to serve our customers and deliver high performance,” Mahoney added. “I'm confident in our ability to bring meaningful, innovative products to market, and grateful for our team's winning spirit as we navigate the impact of these challenges."

The company’s stock was up 2% following the news. Worldwide, the devicemaker saw a 6.4% decrease in Asia-Pacific sales and a 1.6% decline across Europe, the Middle East and Africa. Sales in a group of 20 countries that Boston Scientific considers to be emerging markets saw a drop of 10.1%.

The company also said it increased its available liquidity to about $2.6 billion, with a new $1.25 billion term loan agreement to refinance its previous borrowings. 

As for the remainder of 2020, Boston Scientific said it is unable to estimate the overall impact it will see from COVID-19 and economic slowdowns. Earlier this month, the company cut wages and hours for many of its employees, according to a report from The Boston Globe.