Key Takeaways Boston Scientific is viewed as the more compelling pick in cardiovascular devices.BSX benefits from a broad EP portfolio, WATCHMAN strength and impactful acquisitions.Edwards advances structural heart innovation with its comprehensive portfolio and presence.Cardiovascular disease is the biggest driver of health care spending in most countries, creating more opportunities for future growth. According to Mordor Intelligence, the cardiovascular devices market is expected to witness a CAGR of near ...

Core Insights - Boston Scientific (BSX) shares have increased by 7% over the past 30 days, outperforming its industry and major competitors [1][8] - The company reported strong Q3 2025 performance, with operational sales and adjusted EPS each growing by 19% [3][8] - BSX has agreed to acquire Nalu Medical to enhance its chronic pain management portfolio [12][19] Performance Overview - BSX's stock performance has surpassed the industry's 0.9% gains, the Medical sector's 5.6% growth, and the S&P 500's 3% rise [1] - The stock closed at $104.98, just 4.1% below its 52-week high [3] - The company's Electrophysiology unit experienced a 63% year-over-year sales growth in Q3, driven by the Farapulse system [9] Business Segments - The Cardiovascular and MedSurg businesses contributed significantly to BSX's strong Q3 results [3][8] - The WATCHMAN business sales grew by 35% in Q3, with expectations for increased adoption of concomitant procedures [10] - Asia-Pacific sales grew by 17%, with strong performances in Japan and China [11] Strategic Initiatives - BSX is acquiring Nalu Medical for approximately $533 million to expand its neuromodulation offerings [12][13] - The company has been a strategic investor in Nalu since 2017 and expects Nalu to generate over $60 million in sales in 2025 [13] - BSX's revised 2025 outlook suggests approximately 20% net sales growth, exceeding previous guidance [16] Valuation Metrics - BSX shares are trading at a forward five-year price-to-sales (P/S) ratio of 7.08X, above the industry average [17]

Core Insights - Intuitive Surgical and Boston Scientific reported strong third-quarter results, highlighting their distinct growth strategies in the medtech sector [1][2] Financial Performance - Intuitive Surgical achieved third-quarter revenues of approximately $2.5 billion, reflecting a nearly 20% year-over-year increase, driven primarily by a 19% rise in da Vinci procedures and a 52% surge in Ion lung biopsy procedures [3][7] - Boston Scientific reported over $5 billion in revenues for the third quarter, marking around 15% organic growth, with an adjusted gross margin improvement to about 71% due to high-growth categories like electrophysiology [4][8] Growth Strategies - Intuitive Surgical focuses on deepening its surgical robotics franchise, with the da Vinci 5 system accounting for over half of its system placements, and expanding its Ion and SP platforms [10][16] - Boston Scientific adopts a diversified approach, leveraging multiple franchises such as WATCHMAN and FARAPULSE, and pursuing an active M&A strategy to enhance its product pipeline and market presence [12][17] Market Position and Valuation - Both companies hold a Zacks Rank 2 (Buy), with Boston Scientific viewed as more attractively valued compared to the industry, while Intuitive Surgical's valuation has declined but remains above the industry average [7][23][30] - Year-to-date, Intuitive Surgical shares have risen 4.5%, while Boston Scientific shares have gained 13%, reflecting the latter's stronger performance due to its diversified business model [18] Future Prospects - Intuitive Surgical's future growth will depend on the global adoption of the da Vinci 5 and the effectiveness of its new features, alongside its reliance on recurring revenues from procedures [19] - Boston Scientific's prospects hinge on its ability to scale multiple growth engines, particularly in electrophysiology and the WATCHMAN-ablation procedures, while managing the complexities of numerous product launches [20][22]

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Financial Data and Key Metrics Changes - In Q3 2025, total company operational sales grew 19%, and organic sales grew 15%, exceeding the guidance range of 12%-14% [6][22] - Q3 adjusted EPS was $0.75, reflecting a 19% increase and surpassing the guidance range of $0.70-$0.72 [6][22] - Adjusted operating margin for Q3 was 28%, with an expectation to expand full-year adjusted operating margin by approximately 100 basis points [6][23][26] Business Line Data and Key Metrics Changes - Urology sales grew 27% operationally and 5% organically, driven by international business and Global Stone Management [9] - Endoscopy grew 9%, with double-digit growth in key products [10] - Neuromodulation sales increased by 9%, supported by strong performance in the brain franchise [10] - Peripheral interventions sales grew 16% operationally and 6% organically, with low double-digit growth in the U.S. [11] - Cardiology sales grew 23%, with interventional cardiology therapy sales growing 3% [14] Market Data and Key Metrics Changes - U.S. operational sales grew 27%, while Europe, Middle East, and Africa (EMEA) declined 2% due to specific headwinds [7][8] - Asia-Pacific grew 17% operationally, led by strong growth in Japan and China [8] - WATCHMAN sales grew 35%, reflecting strong market penetration and adoption [15][16] Company Strategy and Development Direction - The company is focused on strategic tuck-in M&A in high-growth adjacencies, with the recent agreement to acquire Nalu Medical to expand into peripheral nerve pain [11][24] - The company aims for 10%+ average organic revenue growth from 2026 to 2028, with a target of 70%-80% annual free cash flow conversion [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining above-market growth, with expectations for continued strong performance in the cardiovascular and MedSurg segments [6][7] - The company anticipates improvements in backorders and operational performance in Europe in the fourth quarter [8] - Management remains optimistic about the growth potential of WATCHMAN and electrophysiology, projecting a 20% CAGR over the long-range plan [32][48] Other Important Information - The company experienced a backorder of approximately $30 million due to an ERP system upgrade, impacting various business lines [8][76] - The company expects to close the acquisition of Nalu Medical in the first half of 2026 [11][24] Q&A Session Summary Question: Is WATCHMAN a key growth driver? - Management confirmed that WATCHMAN is a significant growth driver, with expectations for continued market expansion and strong performance [32] Question: What is the outlook for the China market? - Management indicated that the China business is performing well, with expectations for double-digit growth despite price pressures [39] Question: How will the new product cycle impact CRM growth? - Management expressed confidence in the upcoming product cycle, including the Denali platform and EMPOWER leadless pacemaker, to strengthen CRM growth [86] Question: What are the dynamics outside EP and WATCHMAN? - Management highlighted strong growth in other divisions, including neuromodulation and endoscopy, and emphasized ongoing investments in these areas [58]

Financial Data and Key Metrics Changes - In Q3 2025, total company operational sales grew 19% and organic sales grew 15%, exceeding the guidance range of 12% to 14% [6][27] - Q3 adjusted EPS was $0.75, a 19% increase, surpassing the guidance range of $0.70 to $0.72 [6][27] - Adjusted operating margin for Q3 was 28%, an increase of 80 basis points year-over-year [27][28] Business Line Data and Key Metrics Changes - Urology sales grew 27% operationally and 5% organically, driven by international business and global stone management franchise [10] - Endoscopy sales increased by 9%, with double-digit growth in key products [12] - Neuromodulation sales grew 9%, supported by strong performance in the brain franchise [12] - Peripheral Interventions sales grew 16% operationally and 6% organically, with low single-digit growth in arterial business impacted by China VBP [14] Market Data and Key Metrics Changes - U.S. operational sales grew 27%, with strong performance across cardiovascular businesses, endoscopy, and neuromodulation [8] - Europe, Middle East, and Africa (EMEA) saw a decline of 2% operationally due to specific headwinds, but excluding these, growth would have been in high single digits [8] - Asia Pacific grew 17% operationally, led by strong growth in Japan and China [9] Company Strategy and Development Direction - The company is focused on expanding its innovative portfolio and maintaining above-market growth, with a full-year organic growth guidance raised to approximately 15.5% [7][30] - The acquisition of Nalu Medical is expected to enhance the company's portfolio in the pain management space [13][92] - The company aims to be market share leaders in electrophysiology (EP) and continues to invest in innovative solutions to drive growth [24][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained above-market growth, particularly in the U.S. and China, despite challenges in EMEA [8][46] - The company anticipates continued strong performance in the WATCHMAN market, projecting approximately 20% growth over the long-range plan [39][50] - Management noted that there are no signals of procedural pull-forward due to external pressures, indicating consistent demand [44] Other Important Information - The company expects full-year 2025 reported revenue growth of approximately 20%, with operational revenue growth of about 19% [30] - Adjusted gross margin for Q3 was 71%, reflecting a 60 basis point improvement year-over-year [28] - Free cash flow for Q3 was $1,163 million, with expectations of approximately $3,500 million for the full year [29] Q&A Session Summary Question: Is WATCHMAN a key growth driver? - Management confirmed that WATCHMAN is a significant growth driver, with expectations of continued market expansion and strong adoption rates [36][39] Question: What is the outlook for the China business? - Management indicated that the China business is performing well, with mid-teens growth expected to continue despite VBP pressures [42][46] Question: How will the new product cycle impact CRM growth? - Management expressed confidence in the upcoming product cycle, including the Denali platform and leadless pacemaker, which are expected to enhance growth in the CRM segment [98][100] Question: What is the impact of the $30 million back order? - The back order primarily affected the MedSurg and Peripheral Interventions businesses, but management expects it to normalize by the end of the year [85][86]

Safe Harbor for Forward-Looking Statements and Use of Document Safe Harbor for forward-looking statements: This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements may be identified by words like "anticipate," "expect," "project," "believe," "plan," "estimate," "may," "intend" and similar words. These forward-looking statements are based on our beliefs, assumptions ...

Financial Performance & Goals - The company reported strong 1H 2025 results with net sales of $97 billion and expects ~$20 billion for the full year[23] - The company aims for a 10%+ organic revenue CAGR from 2026E-2028E[26, 41] - The company targets ~+50bps annual adjusted operating margin expansion from 2026E-2028E[26, 41] - The company anticipates leveraged annual adjusted EPS growth from 2026E-2028E[26, 41] - The company projects ~70-80% free cash flow conversion from 2026E-2028E[26, 41] Business Segment Highlights - Urology's served market is ~$7 billion and is expected to grow at ~7% over the long-range plan[76] - Neuromodulation's served market is ~$4 billion and is expected to grow at ~7% over the long-range plan[57] - Endoscopy's served market is ~$8 billion and is expected to grow at ~6% over the long-range plan[97] - Cardiovascular's served market is ~$50 billion and is expected to grow at ~9% over the long-range plan[113] International Markets - International markets account for ~35% of the company's 2025E revenue in high-single-digit growth markets[45] - The company's China revenue is expected to reach ~$12 billion in 2025[48]

Core Insights - Boston Scientific (BSX) is expected to experience growth in the upcoming quarters due to strategic acquisitions, particularly in the oncology and hypertension sectors, while facing challenges from currency fluctuations and macroeconomic conditions [1][10]. Group 1: Company Performance - Boston Scientific has a market capitalization of $1543.77 billion and has consistently beaten earnings estimates over the past four quarters, achieving an average surprise of 8.11% [2]. - The company's shares have increased by 16.9% over the past year, outperforming the industry and the S&P 500, which grew by 0.3% and 18.8%, respectively [1]. Group 2: Strategic Acquisitions - Recent acquisitions, including Intera Oncology and SoniVie, have added significant potential products to Boston Scientific's portfolio, particularly in liver cancer and hypertension treatments [3][4]. - These acquisitions contributed approximately 450 basis points to the company's revenue growth in the second quarter of 2025 [4][8]. Group 3: Growth Drivers - The WATCHMAN device, a key product in Boston Scientific's structural heart programs, is gaining momentum, with a 28% growth in the WATCHMAN franchise in the second quarter of 2025, driven by increased adoption in the U.S. and the CE Mark approval of the WATCHMAN FLX Pro [5][6]. Group 4: Challenges - Boston Scientific is exposed to currency fluctuations, with 40% of its sales coming from international markets, leading to a 1.2% revenue headwind in the second quarter of 2025 due to unfavorable foreign exchange rates [7]. - The company is also facing macroeconomic pressures, including geopolitical tensions and supply chain disruptions, which have increased operating costs, with a 28.9% rise in product costs and an 18.7% increase in selling, general, and administrative expenses reported in the second quarter of 2025 [10][11].

Core Insights - Boston Scientific Corporation (NYSE:BSX) is recognized as a leading AI-powered biotech stock, integrating artificial intelligence into its medical device portfolio, particularly in cardiology [1][4] - The FDA has expanded approval for the FARAPULSE system, which treats atrial fibrillation, a condition affecting nearly 60 million people globally [2] - The company combines internal R&D with strategic acquisitions and early-stage investments to rapidly commercialize AI-enhanced technologies across various medical divisions [3] Group 1: AI Integration and Product Development - Boston Scientific's AI strategy focuses on embedding advanced algorithms into revenue-generating devices like WATCHMAN and FARAPULSE, enhancing clinical outcomes [1] - The partnership with AI platforms such as Anumana aims to leverage data from millions of patients to improve diagnostics and treatment outcomes in electrophysiology and left atrial appendage closure (LAAC) procedures [2] - The company reported a strong organic sales growth of 17% year-over-year, with a notable 28% growth in its WATCHMAN device [4] Group 2: Future Milestones and Market Position - Key upcoming milestones include the commercialization of the Cortex OptiMap system combined with FARAPULSE and further AI-driven product launches [4] - The approach of combining internal R&D with strategic acquisitions supports the scalability of AI initiatives beyond cardiology into areas such as endoscopy and urology [3] - Boston Scientific's leadership in AI-enabled medical technology is reinforced through ongoing partnerships and product innovations [4]