Boston Scientific’s Strong Financial Performance in 2024

Boston Scientific, a leading global medical device company, has reported impressive financial results for the year 2024. The company’s net sales grew by 17.6% to $16.747 billion, driven by strong performance across its various business segments.

Segment Performance

The MedSurg segment, which includes the Endoscopy, Urology, and Neuromodulation businesses, saw net sales increase by 10.5% to $5.993 billion. The Endoscopy business grew by 8.3%, with strong performance in its endoluminal surgery, single-use imaging, and biliary franchises. The Urology business grew by 12.0%, led by its stone management, prosthetic urology, and prostate health franchises. The Neuromodulation business grew by 13.3%, driven by its deep brain stimulation and radiofrequency ablation portfolios.

The Cardiovascular segment, which includes the Cardiology and Peripheral Interventions businesses, saw net sales increase by 22.0% to $10.755 billion. The Cardiology business grew by 24.4%, with strong performance in its Electrophysiology, Left Atrial Appendage Closure, and percutaneous coronary intervention guidance franchises. The Peripheral Interventions business grew by 14.2%, led by its interventional oncology and drug-eluting vascular franchises.

The company’s Emerging Markets net sales grew by 16.1%, representing 16% of the company’s total net sales in 2024. This growth was primarily driven by strong performance in China, fueled by the breadth of Boston Scientific’s portfolio and focus on innovation and commercial execution.

Profitability and Margins

Boston Scientific’s gross profit margin was 68.6% in 2024, compared to 69.5% in 2023. The decrease was primarily due to inventory charges, including related to the POLARx™ cryoablation system, strategic manufacturing capacity investments, and other period expenses, partially offset by increased sales of higher margin products.

The company’s selling, general, and administrative (SG&A) expenses increased by 15% in 2024, but were 70 basis points lower as a percentage of net sales. The increase was driven by higher selling costs associated with the higher global net sales and costs to support product launches, including the Farapulse™ Pulsed Field Ablation System.

Research and development (R&D) expenses increased by 14% in 2024, but were 30 basis points lower as a percentage of net sales. The increase reflects the company’s continued commitment to advancing medical technologies and investing in its pipeline of new products.

Boston Scientific’s adjusted net income (excluding certain charges and credits) grew by 23.3% to $3.726 billion in 2024, with adjusted earnings per share increasing from $2.05 in 2023 to $2.51 in 2024.

Acquisitions and Strategic Investments

During 2024, Boston Scientific made several strategic acquisitions and investments to strengthen its product portfolio and expand its capabilities:

• Acquisition of Axonics, Inc., a leading provider of sacral neuromodulation devices for the treatment of overactive bladder, fecal incontinence, and urinary retention.
• Acquisition of Silk Road Medical, Inc., a company that develops and manufactures devices for the treatment of carotid artery disease.
• Majority stake investment in Acotec, a company that develops interventional oncology products.

These acquisitions and investments are expected to contribute to the company’s future growth and profitability.

Outlook and Challenges

Looking ahead, Boston Scientific faces both opportunities and challenges. The company continues to see strong demand for its innovative medical devices, driven by favorable demographic trends and the need for less invasive treatment options. However, the company also faces ongoing macroeconomic headwinds, including supply chain disruptions, inflationary pressures, and geopolitical uncertainties.

To address these challenges, Boston Scientific has implemented a global restructuring program, the 2023 Restructuring Plan, which is expected to result in total pre-tax charges of $450 million to $550 million and generate annual pre-tax savings of $225 million to $275 million. The company plans to reinvest a substantial portion of these savings into strategic growth initiatives.

Additionally, the company is closely monitoring the implementation of the EU Medical Device Regulation (EU MDR), which is expected to result in significant expenditures over the transition period. Boston Scientific has already incurred $408 million in EU MDR implementation costs and expects to incur a total of $450 million to $500 million.

Despite these challenges, Boston Scientific remains well-positioned for continued growth and success. The company’s diverse product portfolio, strong pipeline of innovative technologies, and strategic acquisitions and investments position it to capitalize on the growing demand for its medical devices and deliver value to its shareholders.

Conclusion

Boston Scientific’s financial performance in 2024 was impressive, with strong growth across its business segments and improved profitability. The company’s strategic investments and acquisitions, coupled with its focus on innovation and operational efficiency, have positioned it for continued success in the years ahead. While the company faces some macroeconomic and regulatory challenges, its strong financial position and commitment to advancing medical technologies make it well-equipped to navigate these obstacles and deliver long-term value to its stakeholders.