Boston Scientific Corporation (BSX) Earnings Call Transcript & Summary

Okay. Thanks, everybody, for coming. I'm Lee Hambright, U.S. medtech analyst at Bernstein. We are very pleased to host Boston Scientific today. We've got Chairman and CEO, Mike Mahoney; and Chief Medical Officer, Dr. Ken Stein. Thanks so much, guys, for being here.

Pleasure.

For those of you in the audience, if you would like to ask a question, you could submit it via the pigeon hole tool, and I will try to work in as many as I can here. So Mike, kicking off here, 2024 was another incredible year for Boston Scientific with 16.5% organic growth, 22% EPS growth. You had a great start to '25 with 18% organic and 34% EPS growth in Q1, which sets you up for a strong year. Maybe you could just kick us off with a few thoughts on the state of the business at Boston Scientific.

Great. Thanks for having us and Dr. Stein. Thanks for coming as well. Just very proud of the very high execution of the company for many years in a row. And as you know, our aim is to be the highest -- we're a medtech company. I think we likely were last year. Hopefully, this year, and maybe the year before that. And our goal is to do that for the next 5 years. And we -- and that we spend time every day at hitting our near-term commitments and investing to have a differentiated future. And we can talk about that with our portfolio. But that's our 100% focus of the company, and we're off to a really good start this year. And you saw the first quarter results, and despite the tariff headwinds puts and takes in that one, we raised our full year guide to, I think, 12 to 14. Also raised our EPS and enhanced our margin profile, margin improvement for the year, despite the tariff impact. So really proud of the execution of our global team and the portfolio that we have and the momentum of the company.

Great. Maybe just broadly on macro, let's talk about the health and medtech markets. Medtech market growth has remained pretty resilient, and stocks have held up well despite a host of macro issues, policy changes, HHS appointments, cuts at FDA, potential Medicaid cuts, tariffs. Can you maybe just spend a moment talking about the health of underlying medtech markets and then just put all of those macro issues in perspective for us?

Yes. It depends really on where you are in medtech, and it's overall healthy, but the markets that we serve are extremely healthy, and that's been an intentional strategy for many years. Those who have followed us for a while, our weighted average market growth rate was 1% years ago. And now it's kind of around the 8% range. And that's because of quarter-over-quarter, year-over-year focus on innovation and putting ourselves intentionally in faster-growing markets for the future, and that's what we aim to do for the next 5 years as well. So our underlying market growth at Boston is very strong. And we happen to have a very unique position in what I think I will call the 3 largest, highest growth markets in all of medtech, in the EP category, in the LAAC category, and I would add a new, Ken, concomitant with the combination of PFA and LAAC is extremely strong. So our weighted average market growth is about 8%. We've intentionally put ourselves in faster growth markets, and that's what we will continue to do. But the overall patient volume continues to be strong due to aging demographics and so forth. There are a lot of macro headwinds. We've been able to navigate them with the tariffs, some of the cuts on the FDA and so forth. So we've been able to manage those effectively. And we have a very resilient team who finds a way to deliver differentiated results. And we don't like these macro changes, but it's a good test for our team, and we navigate it well.

Okay. Great. Maybe just hitting tariffs now that you mentioned. On your Q1 call last month, you sized tariff impact for 2025 at $200 million pretax, which is about a 4% impact to this year's EPS. Obviously, this is still a moving target. It seems like the U.S. has walked back from the ledge a little bit on tariff negotiations with China and discussions being elsewhere. Any update to how you're thinking about tariffs or maybe an update on mitigation activities?

Well, on the tariffs we gave in our 2Q guide, it assumed, I guess, the European tariffs come back and the China tariffs were higher. So we've had better news since then. That's actually a benefit for the company, our company and most others. So that's good news, and we'll update our second quarter guide in July and full year guide there. So I think the tariff is certainly a better situation than we were when we gave our first quarter report. And in terms of our global supply chain, we're all over the world, and we are also a large investor in manufacturing in the U.S. We've tripled our WATCHMAN capacity in the U.S. We just opened up a new facility in Georgia. We're also doing a lot of expansion outside the U.S. as well to meet the demand. So we have an excellent global supply chain team. And ideally, the tariffs will become less noisy over time. So we can best allocate capital the right way.

Got it. Okay. Great. Before we get into other stuff, you issued an 8-K, this morning, which we should hit quickly. You mentioned that ACURATE neo. You're discontinuing worldwide sales of ACURATE neo2. Maybe could you talk a little bit about what's behind the decision? And how does that impact?

Yes. I'll read the statement here. Obviously, a tough decision for our team. We had the ADVENT trial that read out quite a while ago. We've had a lot of discussions in the U.S. and with the regulatory agencies in the EU and basically came out with this comment this morning. And it says based on ongoing discussions with regulators regarding the ACURATE valve platform, we've recently made the decision to discontinue worldwide sales of ACURATE. We've also made the decision to not pursue U.S. FDA approval for ACURATE or approval in other unapproved geographies. While a difficult decision, we felt it was necessary based on the discussion with regulators, which resulted in increased clinical and regulatory requirements to maintain regulatory approvals in global markets and to obtain approvals in new regions. So the investments and additional resources needed to satisfy these requirements are prohibitive for the company. Importantly, given the strength of the company, despite the financial impact from the discontinuation of ACURATE, we expect to achieve our previously issued second quarter and our full year guide, both sales and adjusted EPS. So it's disappointing. We really tried, but it's the right decision based on the increased requirements that the regulatory agencies have asked us to do in EU to keep it on the market, and there wasn't a clear path that made sense in the U.S. We also have many different investment opportunities across the company, and we're best positioned from a capital allocation to move on into other focus areas.

Got it. Okay. Comment on rough sales.

We quoted full year sales about $200 million.

Got it, got it. And the point is, in addition to the discussions with the U.S. FDA, there were also discussions with European regulators, which led to the point that there'll be additional investment required to keep it on the market in Europe really what led to this.

Yes. It was the various regulatory agencies in Europe, varying degrees of opinions on it and the requirements to do extended registries that weren't feasible in some countries, the follow-up required, the cost of the investment and also the burden that would place on hospitals and consent with patients didn't make sense. And given the trial in the U.S., it's time to make that decision and put our focus elsewhere.

Okay.

But I think it's important to show the strength of the company. We're not touching our second quarter or full year guidance.

Great. Okay. Maybe come back around interventional cardiology in a minute. Okay. Let's zoom back out and talk about the LRP. Your last long-range plan from September of 2023 called for 8% to 10% organic growth from 2024 to '26. You're obviously way ahead of that. 16.5% organic last year, you're guiding to 12% to 14% this year. What's the best way to think about the next couple -- 2, 3 years at this point?

The best way is to not think about that guide anymore based on those results, really, because we're going to obviously do better than that. Things would have to fall apart for us to not beat that guide. So we'll give our 2026 guide like we always do in February of '26. We do have an Investor Day in September, which will give even more insight into our portfolio. And really, it's -- the theme hasn't changed. Our focus is to continue to enhance our weighted average market growth rate and continue to out-execute our peer group, which we've done for many years in a row and have the ability to deliver differentiated results, but invest like crazy in the future of the company to best position ourselves for the next 5, 7 years. And that's what we're doing with our portfolio. So our aim is to be highly differentiated over the next 5 years, just like we have in the past 3.

Got it. Okay. Let's touch on gross margin. 2025 gross margin is now expected to be roughly in line with '24, 70.3%. And I was just wondering, could there be any upside there if the tariff...

There's probably a little bit of puts and takes, and we'll give at 2Q more information on ACURATE. There will be some gross margin impact in the near term with the ACURATE decision. The tariffs continue to bend our way where they are currently. That would be some upside. So there'll be some puts and takes in gross margin. Obviously, our goal is to continue to enhance our goal is to get back to that 72.5% range. And we have key enablers that enable that, that others may not have as much. This -- the mix benefit and the strength of our cardiovascular portfolio is gross margin accretive. We continue to focus on the IPs and optimization in our plant network, and pricing is essentially roughly flat. So there's a path to continue to enhance it. There'll be some minor puts and takes, with tariffs maybe hopefully an upside and slight downside with ACURATE. And we'll give more guidance in the second quarter.

Yes. Got it. I mean, you mentioned that 72.4% in 2019. That doesn't have you getting back there over 5 years. I think there's a path back there potentially within that time frame. Or...

We think -- the reasons to believe is the growth rate of the company and the mix drivers within that. So if you don't have that, there's not -- it's not a clear path, but you have unusual mix drivers that are growing outsized. The markets are growing outsized. Our team is focused on productivity. There's some -- there'll always be some minor puts and takes, but our aim is to continue to enhance our gross margin over the period.

Great. Just a quick word on pricing. Pricing historically, kind of 1% or 2% headwind in medtech, but it's been a lot more favorable recently. Some, I think, companies have been pretty disciplined in the face of inflationary pressures. So I wonder how long can that last?

I think it's -- so it's -- most of its portfolio, there's always good actors and bad actors in the pricing environment, but most of it is mix and portfolio. And again, because we're positioned uniquely in very, very strong markets, we have some markets that are less advantaged in price in drug-eluting stents, in CRM, but now there's such a very small percent of our portfolio versus years ago. And so the most benefit we have is mix. We are able to take up price a little bit in some markets, and some of our businesses have positive price. Some have slightly negative. But the net-net is close to 0. And so we anticipate that price. And I don't think it'll ever move to a 2% or 3% favorable. I shouldn't say ever. But I think modeling kind of flattish price is the right place to be.

Got it. Okay. And maybe just touching on operating margin. You're on track to deliver 50 to 75 bps of operating margin expansion for this year, which should allow you to get back to 27.6% for 2025. You set expectations, I think, at the last LRP for 150 bps of operating margin expansion over the next few years to kind of 28% by 2026. Is that still kind of the right way to think about it?

Do you want to take this one?

There's a lot of damage.

Yes. So the LRP we gave, again, was 150 bps over 3 years, and it would be hard not to beat that based on what we did last year, and we guided to 50 to 75. And as you said, if tariffs helps us and so forth, maybe we can be at the higher end of that range. We'll see. And so our goal has been the same thing. Maybe it's boring is to outgrow our peer group in a significant way and drive operating income faster growth than sales. And with that, we've shown over time the ability to consistently improve margins while delivering in the short term. And I think you have to look at our track record. And now that given the favorable product portfolio we have and the favorable markets, it would be highly disappointed if we didn't find a way to continue to improve margins over the next 5 years.

Yes. Excellent Okay. Cool. Let's get into the fun stuff, so let's talk about the businesses. So no surprise that we're going to start on FARAPULSE. So FARAPULSE has been obviously a great success story, perhaps one of the best launches in medtech history. It's hard to build a product that changes the standard of care in a way that's faster and safer and more effective. And you've done that with FARAPULSE. So maybe for the generalists in the crowd, maybe you could reflect a little bit on why you've called FARAPULSE the most transformational product in your career and what...

Yes, you can do all the -- Ken will jump in after and all the other stuff. I'll just kill one end before. It's so gratifying for me because, again, our venture portfolio, we have the largest venture portfolio in medtech. And I think that's going to fuel a lot of the unusual growth drivers -- differentiated growth drivers for the future, and this came from that venture portfolio. So we stuck with this company for about 9, 10 years prior to actually getting approval through ups and downs, and we helped them. We aim to do that with other opportunities that we have. But it's just in medtech you rarely see an overnight transformation. Medtech is typically a bit more incremental. And a good friend of mine is having a PFA this morning in Cincinnati. It's -- I've never seen a product transform, and we've launched it 13, 14 months ago. A practice from electrophysiologists, and for the generalists in the room, you need AFib ablation, you're likely going to get a PFA and likely going to get FARAPULSE. And it's a safer procedure. It's extremely effective, and it's very efficient for the hospital system and the doctor. Reimbursement is also being rewarded. We expect an additional 9%, 10% increase in reimbursement for the hospital, similar to what we're seeing with WATCHMAN. So it's just a product where referring cardiologists, referring physicians know about it now. And doctors are so confident, and Ken can comment more, but of the most rewarding things I've heard from EPs, I spent a lot of time with EPs is this rejuvenated their career because not only they are more efficient, but they sleep better. They don't worry about adverse events. They don't worry about how the patient is going to do the next day because the safety profile is so strong and it's so effective. And our operations team has done an amazing job of staying ahead of the demand of this product. And we have a lot more to do in the U.S. We have a lot more to do in Europe. We're just starting. We're like in the first inning in China, and we're in the very early innings in Japan. And there's other segments within EP that we want to expand into. But I'm sure Ken will add on more with the other questions you have.

Great, great. Yes. Ken, maybe we can get into the launch a little bit. Growth has been phenomenal. It seems pretty clear that FARAPULSE is set up for very strong growth over the next few quarters. I think the biggest question that comes to mind is, how does FARAPULSE perform as comps get tougher? What are you seeing out there with the launch?

Yes. No, Lee, growth has been phenomenal. And it gets to a number of things, and it gets to your question, right? I mean, what's so transformational about FARAPULSE? And it is unique in my experience in having something that is faster, that is safer, that is, at this point, clearly more effective than traditional means of ablation. And I think as Mike said, and it's very straightforward to use, right? It reduces the cognitive burden. AF is remarkably common arhythmia. Again, just to set the stage, again, for the folks who don't do medtech all the time. There are best data, like 10 million people in the United States alone who have atrial fibrillation. Penetration of ablation treat atrial fibrillation today, probably in the low single digits for paroxysmal AFib, that's AFib that comes and goes; high single digits for persistent AFib, AFib that comes and doesn't go. So -- and I say this and our IR team hates me for saying it, right, but it's a market that's effectively infinite in size, right? So there's a huge runway for a lot of growth. And FARAPULSE came into that, right, and is such a win-win for everyone. It's better for patients, better for docs. Even at a premium price with our latest generation technology, right, the NAV-enabled FARAWAVE catheter, so our second-generation FARAPULSE catheter, linked with our mapping system, FARAVIEW on OPAL. It's actually more economically advantageous to hospitals than traditional means of ablation. And so we've very rapidly seen uptake. We've disclosed previously, more than 200,000 patients worldwide have been treated with the system. We've published clinical data in over 20,000 of those patients in Japan, where we only launched to late Q4 last year. And in spite of not having first-mover advantage in Japan, we've already treated over 10,000 patients. And I think there is a very long and very wide runway as long as we can continue to develop at that capacity that's necessary to deal with all of these patients.

Great, great. There's a nice productivity story with FARAPULSE. Maybe you can speak to that a little bit. How are you seeing that play out in the real world?

Yes. One of the advantages of the system, and it really all comes back to design, it's this decade of development that Mike referred to. It is a safer system. Because it's safer, right, you -- the workflow to do the ablation becomes a lot more simple, a lot more straightforward. So what we typically now are seeing procedures that used to take 1 to 2 hours to accomplish, right, done in a lab in, call it, 30, 40 minutes. And what that means is, right, the typical cath lab in the United States is adding on 20%, 25% folks who are really pushing workflow, maybe doing close to doubling the volume that they've been able to do previously. It also gets to the concomitant procedure that Mike mentioned. And when we're talking about concomitant procedures, we're talking about treating patients with atrial fibrillation, both with FARAPULSE to restore normal rhythm, but also WATCHMAN, the left atrial appendage closure to help prevent stroke, which is the other major risk patients with atrial fibrillation have. And when you take these 2 procedures together, which, again, you go back legacy, may have been 1 hour, 1.5 hours each, right, and now you can do them both at one sitting, patient is exposed to one set of risks in typically under an hour. And that's part of what's necessary, right, to create the capacity that we need to deal with these millions of patients.

Great. So you're driving rapid adoption. Obviously, lots of conversion from cryo and RF. You now expect PFA to likely exceed 60% of global AF ablations by 2026. What's the latest thinking on that metric? And do you see any rate limiting factors in the medium term and long term for growth?

Yes. Lee, I think, again, 60% in 2026 is what we're estimating. Say, 80% by 2028. Frankly, there ought to be a future where no one gets an AF ablation using technology other than PSA and we would say other than FARAPULSE. Again -- and the only rate-limiting factor to growth at this point is going to be lab capacity.

Yes. Got it. Okay. So at AF Symposium in January, you presented some data from the first phase of ADVANTAGE AF, which studied FARAPULSE for PVI and PWA in persistent AF. That persistent indication is on track for the second half. Maybe can you talk just a little bit about how you think about impact from that indication expansion?

Yes. And so, again, to clarify for everyone, right, currently, labeling for FARAPULSE system is for paroxysmal AFib, AFib that comes and goes, not for persistent. In spite of that, we're already seeing a very large amount of off-label use in the United States and, frankly, globally. So I don't know that getting the label is going to have a material impact on growth of FARAPULSE. I know what people are going to see just getting the data out there is going to help drive referrals, right? As I said, persistent AFib, it's still single-digit penetration because up until now, referring physicians have been concerned. Is this a safe procedure, FARAPULSE? Yes, it is. Is this an effective procedure? Because, traditionally, it's been much harder to ablate persistent AFib than paroxysmal AFib. But the data that we just presented from ADVANTAGE really shows extraordinarily good long-term success from the ablation. We're down now to single-digit redo rates in ADVANTAGE patients with persistent AFib. And that's something that no one has ever been able to show before with any kind of technology.

Great. So just thinking about upcoming approvals. FARAPOINT, FDA approval is expected in the second half of the year. If you can just talk a little bit about what that adds to the portfolio.

Yes. Let me say 2 things about just the overall catheter portfolio. So FARAPULSE is our point ablation catheter. We pay people in marketing to these names up. And it was also studied in our ADVANTAGE Phase II clinical trial as an adjunct to the FARAWAVE catheter to a very specific purpose of ablating an arrhythmia called atrial flutter as an adjunct during an AFib ablation because those 2 are just very common companions of each other. And the advantage of FARAPOINT that we showed in the data in ADVANTAGE is that, again, was very efficient and very effective at achieving something called CTI block, which is what you need to do to ablate atrial flutter. I think from a broader standpoint, I think, really important to point out -- we've said, Mike has said, right, that the FARAWAVE launch may be the single most successful new product launch in medtech. But we are really not stopping there. I think it's really important for us to continue iterating the entire catheter portfolio. So that's why we already have a second-generation FARAWAVE catheter out in the market. Third generation in development. We have different catheter form factors. FARAPOINT in development, again, expecting approval second half of this year. Catheter called FARAFLEX, which is designed to be a "map and ablate" a large focal lesion catheter that's already in its first human use clinical trials and expecting to begin pivotal trial for that later this year. So we're not just resting with FARAWAVE, right, but continuing to develop the entire catheter portfolio as well as the mapping ecosystem, the ultrasound ecosystem, right, the things behind that to support the entire product line.

One follow-up on FARAPOINT. I've heard some clinicians like to use RF for CTI lines because they worry about coronary spasm with PFA. Can you just comment on that?

Yes. So there is a phenomenon actually with any kind of energy source that's applied in close proximity to a coronary artery that the artery looks, just like any muscle, it gets irritated, it will spasm down. It's not unique to PSA, not unique to FARAPULSE. But what we did and really what was part of the point of that ADVANTAGE Phase II clinical trial data is we showed that with just simple premedication with a very common drug, nitroglycerin, which if you're not in medicine, sounds terrifying, but it's not, it's standard used for people who have coronary artery blockages that very safely, very effectively mitigated the issue of spasm. So really, from our standpoint, not a concern as long as people are premedicating with nitro.

Got it. Okay. Maybe just one point on AVANT GUARD, which you competed -- completed enrollment for in first quarter of '25. Can you just talk about the significance of that trial and what that brings to the story?

Yes. We're very excited about the AVANT GUARD trial. As you just said, completed enrollment earlier this year, expect to have the results out first half next year. AVANT GUARD is a very different kind of an ablation trial, right? It's not just to qualify and get a new catheter approved. It's actually to prove a new strategy, which is to show that ablation using FARAWAVE for persistent AFib should be the first line of defense. And so it's early intervention instead of giving patients, which is what's typically done today, a trial of an antiarrhythmic drug. So randomized AF ablation first line against antiarrhythmic drugs. And the hope is that should that trial be positive, and we're very optimistic about it, right, that, that will drive earlier referral in. And that will also help us to get away from that low single-digit penetration in the persistent AFib population.

Got it. Okay. Maybe last one on pipeline products, the FARAFLEX. So FARAFLEX is your large focal catheter, sort of a similar shape to the Sphere-9 catheter. Just what role does that play? And what are your expectations for FARAFLEX?

Yes. So we -- the goal here, right, is to give the complete toolbox. Again, I don't golf, but the people I know who golf never bought with just one club, right? And I think key to success here is providing, right, the whole suite of tools that electrophysiologists may need. Now for a first shot ablation, where typically what you're doing is one called just pulmonary vein ablation and typically for persistent AFib also, posterior wall ablation, we really think there is no tool better than FARAWAVE. But as you get into more complex arrhythmias, there can be a need for different types of catheter form factors. So that's FARAPOINT. For redo ablation, right, where you may need to just hit very targeted areas of the atrium, right, you may want something like FARAFLEX where you can map and ablate. As we get to other arrhythmias like ventricular tachycardia, again, other form factors become more important. But I think important to state, however, we still see FARAWAVE as the workhorse catheter. And again, just getting back to our more recent data, these redo ablations, which used to be a really big chunk of the ablations that electrophysiologists were doing and that require these much more sophisticated tools, were down into single-digit redo rates now when people use FARAWAVE as their first shot.

Great. So I'll try to simplify it a bit more and maybe think this is wrong. But if you look at the pie chart of types of ablation, 2/3 of them, the PVI and posterior wall, there's no better product available than FARAPULSE. The 1/3, that's where we have the additional point catheter and FARAFLEX, which is more optimized for that 1/3.

Maybe speaking to that 1/3 a little bit and talking about the competitive landscape. You have one large competitor who's struggled with some supply constraints, but it's kind of just getting off the ground in the U.S., maybe targeting some of those more complex cases to start. What are you seeing out there from that competitive launch?

I would say our competitive position is stronger now than we thought it would be 15 months ago, given some of the challenges of some competitors and the fact I mentioned earlier, we've really done a great job of rolling out FARAPULSE across the globe and open up so many centers. And it's going to be very difficult to beat that product for that 2/3 of the market I just highlighted. That 1/3 of the market, that's where we're going after with the FARAPOINT catheter that we launched this year and our FARAFLEX catheter. So we think we have such an unusual headstart. And you can't do this across every division, but we put, as you might expect, more attention and focus on dollars and investment in this category, along with WATCHMAN and concomitant than we do anywhere else. And so we have a -- we're leading the clinical trials. We've got a beautiful cadence of products. We have multiple venture bets to further augment it. We're expanding in new areas with ICE. This is the biggest market in medtech that grows the fastest. We have the lion's share of the lead. The market is underpenetrated. So there will be more competition, but we've got a terrific headstart and a great portfolio.

Great. One question about dual energy and RF and where does RF go. There's some clinicians who have expressed an interest in having that dual energy option, being able to use RF for certain parts of the procedure. Do you think that's important?

Yes. I don't think so at this point. Again, if we wanted to put RF on a catheter, I mean, it's very easy to do. There are still going to be some very isolated arrhythmias where RF is going to be the best choice. We have yet to see a use case where you need both in the same catheter, and there are inherent design trade-offs in doing it. So docs who are interested in it are interested because they think you can get a catheter that's great at both, but you can't. And our design philosophy is let's make the world's best PFA catheter, which we've done, and let's treat any arrhythmia where you need PFA with PFA, with a catheter with the right form factor. That's FARAWAVE, FARAPOINT, FARAFLEX. And if you ever, for whatever reason, need to supplement that with RF, then take an RF catheter that's designed to be one of the world's best RF catheters.

Got you. Okay. Great. Maybe wrapping up on PFA. You launched FARAPULSE with kind of agnostic strategy with respect to mapping. You've now got a mapping product that you're rolling out. Can you comment a little bit just on the importance of mapping and how the mapping launch is going?

Yes. Mapping launch is going very well so far. I still think it is important to say that we will still be agnostic. So for people who want to do cases without mapping, which is very common in Europe today and the more cost constrained environment is, the more you'll see that used, we're very happy to support those cases. If people want to do our case with a competitive mapping system, we are not locking down. We're leaving that as an ability. What we're trying to do is, again, create a mapping ecosystem, right, where we don't have to force people to use our mapping system. We want them to want to use our mapping system. And the launch to date of FARAVIEW on OPAL has really exceeded our expectations.

Great. Okay. Moving over to WATCHMAN. WATCHMAN hit $1.5 billion in revenue in 2024. Growth has been consistently strong, 24% in the first quarter, driven by the concomitant opportunity, which you mentioned. You updated on the Q1 call that over half of U.S. EP implanting customers have now performed at least 1 concomitant procedure. Can just reflect a little bit on the rapid uptake in the field? What are you seeing out there? with concomitant?

I would say it's still super early, but we've seen a very nice switch even over the last 6 months. Physicians who, prior to the concomitant approval and prior to the concomitant reimbursement, you would anticipate a very low penetration rate. But the adoption is quite strong because of the safety profile of WATCHMAN FLX Pro, the safety profile of FARAPULSE. We already have Baylis, the transseptal crossing platform. So it's a very efficient, safe procedure. And as Dr. Stein said, you ideally cure your AFib, reduce the risk of stroke and you get patients off blood thinners. So who wouldn't want that? So there -- we continue to have an opportunity to train many more EPs to do the concomitant procedure, which we're doing. It's not popular outside the U.S. yet given indication and reimbursement, which we think -- our aim is to change that over time to make it as strong in Europe and Asia Pac as in the U.S. But it's very early innings. But that's what I mentioned before. If you look at the -- I hate the word competitive moat, but I guess I'll use it. I think the 3 best markets in medtech is EP, LAAC and the emergence of concomitant. And if you look at the growth profile for many years to come, there's no better markets to be in. And fortunate we're to have earned a leadership position in both, LAAC and FARAPULSE. And then when you have the combined procedure that requires both products, we are uniquely positioned off for that. Many of our competitors don't offer one or the other. And we want to continue to invest in making that procedure more optimized, easier, train more physicians. And it has also helped solve for just the constraints the health care system has, bringing patients back twice, anesthesia twice, lab time twice. It's very inefficient. So we're really grateful that the reimbursement is now in place as it should be to have a -- both procedures done very effectively at the same time.

Right. The CHAMPION trial has become an increasingly important part of the story. Obviously, a huge potential market expansion -- indication expansion for WATCHMAN. can you just talk a little bit about the importance of CHAMPION and how to think about what that means for the business?

Yes. So CHAMPION is our first-line trial WATCHMAN FLX against the so-called NOACs, the new -- not so new anymore, oral anticoagulant medications, like ELIQUIS, XARELTO, things like that. And we expect to have those data reported out first half of next year. Goal here is to show that we've got comparable efficacy to taking pills every day for life and to be able to show there's actually less bleeding over the long term with WATCHMAN than if you're taking on those medications. And should we get those results, right, that has a number of really important impact. First of all, it can quadruple the size of the indicated population for left atrial appendage closure. And then it also would get us, we feel confident, better representation international guidelines to help unlock the international market, get it to the point where international use of WATCHMAN comes close to what we see in the United States, and also enable us to get a more favorable national coverage decision from CMS United States to cover reimbursement for the procedure as a first-line option.

Great. Maybe we can shift over to Interventional Cardiology for a moment. You've had a very successful Interventional Cardiology business for a long time. We've grown that complex PCI business really well. It's now much larger than the drug-eluting stents business. With the news this morning about TAVR, just a question, can you be the leader in interventional cardiology without a TAVR asset?

I'd say we are the leader in coronary intervention, and the team has done a remarkable job. Again, it's all about portfolio management and putting yourself purposely in the fastest-growing markets. And that team, which was overweighted to drug-eluting stents years ago, has essentially reinvigorated the whole imaging platform with our imaging platform. We've also reinvigorated, the first to market, with the agent drug-coated balloon. And now we're doing new studies to widen the indication of that to make it potentially at least $1 billion market opportunity. And that business is growing essentially at double digits. So the team has done a terrific job as the leader in coronary interventions of continuing to focus on unmet needs. We've recently acquired, as you know, Bolt to treat -- to go after a competitor there, to further round out that portfolio. We have approval for above-the-knee and peripheral inventions now and below-the-knee next year. We just started our clinical trial. We also acquired an early-stage company called SoniVie for hypertension, which potentially could be a nice market depending on what happens with the reimbursements, private pay market and so forth. So that's a differentiated hypertension. That business goes there. So the area that we're less good at, for sure, is aortic valve replacement, TAVI and mitral and so forth. That's the gap. We have a number of really compelling venture plays in those areas. Then we'll see over time whether that makes sense based on the progress that they make. So our focus continues to be on category leadership and putting ourselves on faster growth markets. And I think our interventional cardiology story taking it from a very low single-digit growth to a close to double-digit most quarters is a great example of our portfolio management execution in the company and leveraging our internal R&D and our VC portfolio. The largest investment we have in the company is in interventional cardiology called VITALYST, which is our circulatory support system, where we've done, I think, about 30 patients successfully in VFS. We'll start the U.S. clinical trial for complex PCI and then for shock. So that's a longer-term investment, but we're very bullish on that market. And again, some players have point solutions in these markets. We have a very comprehensive portfolio. So when it comes to contracting and partnering, you want to have a complex -- you want to have a comprehensive portfolio to leverage and partner with hospitals, and that's what we offer.

Got it. One more on TAVR. With LOTUS and now neo2, is this the end of the road in TAVR? Is it possible that you kind of go back and take another shot there?

We'll see. 4 years ago, you would have said you should shut down your EP business because it was $400 million and not growing and not making any money hardly. Then we had -- we invested smartly in Baylis and FARAPULSE and have worked out. So we never say never. For us to get back in the TAVR market one day, it would have to be a compelling platform that we think would be differentiated. But at this point, we'll continue to scan, but I would never say never. But we'd only do it if we felt like it could make a meaningful impact. Given the -- and the reason I say that is we have so many other investment areas across the company, it would have to be one that would be compelling.

Yes. Got it. Structural heart, more broadly, where does that rank in your priorities? It's obviously a big growing market, a place where you have less exposure. Is that an area where you want to take more shots on goal?

Well, we consider LAAC as kind of in the structural areas. So we're kind of all in on that, as you know. And as you may know, we have multiple VC investments, a few of them with fixed options to buy if we want to and if they make progress across tricuspid and mitral. And as you said with TAVI, the TAVI market is still healthy. It's not -- doesn't grow as fast as it used to. It grows a little bit below our weighted average market growth rate as a company. So the only way we would enter that is if we thought there was something disruptive.

Got it. You mentioned the venture capital portfolio. You've got a growing VC portfolio. Many of your most successful acquisitions have come out of that portfolio, including Cameron Health years ago, Preventice, FARAPULSE, of course, Bolt more recently. Can you just comment on that portfolio? How important is that to your future? And how hard is it to be good at investing in this?

I think we're not perfect. I think we're better than many, but you're going to have some setbacks because by nature, they're early stage. They're typically more disruptive. And so there's going to be some that work out and some that don't work out. But we've gotten pretty good at it over the years. Our portfolio now is larger and more exciting than it's ever been and primarily weighted across the cardiovascular landscape, but we have some very exciting VC bets in urology as well as endoscopy. So I think as the company continues to get bigger and bigger, we can walk and chew gum at the same time. We can deliver high-performing results and invest in the long term while improving margins. And the VC portfolio allows us to have a good look at these companies. When they don't work out, we're able to manage the dilution, if we have some equity accounting in there, but the payoff is quite large, and it frees up our team to continue to enhance our core portfolio. We do traditional tuck-in M&A. And then for our R&D teams, they don't look at it as we're losing now, we're doing a VC deal. If we buy the company, that product will come internal to our R&D teams. So our R&D teams are very much in sync. That -- our best thing we can do is create more shots on goal, treat more patients. And so oftentimes, we'll have an internal technology that we like a lot, but it won't get the investment required to bring it forward at a proper time frame. So we'll spin that company -- not company, we'll spin that technology out to a third party, invest in it, see how it goes and bring it back in. So we have a lot of motivation across the team not to be protective, but what can we effectively fund efficiently. And if we can't, let's spin it out or let's do a VC opportunity.

Got it. You touched on Bolt Medical. You announced that deal back in January. It gives you exposure to the exciting intravascular lithotripsy, IVL space, which was, of course, pioneered by ShockWave. Maybe could you touch on that a little bit and talk about where Bolt is in its development journey?

Yes. We're very excited about that. We initially started that company. That was the story I just said, initially, with some IP moved along a little bit, realized we couldn't fund it given other priorities, spun it out. Keegan Harper did a fantastic job with it. It's a terrific platform. It has approval for above-the-knee. So we'll start launching in probably late fourth quarter for peripheral vascular above the knee. But it has some differentiated features in cardiovascular, where the largest part of the market is. In terms of its number of admitters, it's ease of use. And also the ecosystem that we're able to place with it. So with Boston Scientific, you can see the issue with our IVUS imaging. You can prep the vessel with our various products or with Bolt and you can treat the vessel. So beyond it being a differentiated product for IVL as a standalone, doctors look at it as treating a patient. And the portfolio that we have will be very difficult to compete if you have just a standalone IVL product.

One question from the audience. What changes are you seeing in your engagement with the FDA on the back of some of the recent cuts and things?

Yes. Frankly, in terms of our review cycles and products that are under review right now, not much of a change. The things that were covered under MDUFA with user fees, they fired a whole bunch of people, but then they rehired all of them. So I'd say not too much of a change there. Longer range, so a little bit of a wait and see as we look at what some of the impact is maybe at some of the offices of innovation within FDA. But today, review teams are largely intact. And we really haven't had any particular difficulties with any of our submissions that are under review right now.

Great. Quick one on M&A. Lots of activity recently, Silk Road, Axonics, Cortex, Bolt Medical, Intera Oncology, SoniVie. Can you just talk a little bit about the path going forward? Do you need to take a pause here after all those or you're good to go in acquiring all of them?

We're good -- we're fine and good to go. It's -- we've -- it's just been our recipe for many, many years. With our VC portfolio and M&A, it's all about putting ourselves in faster-growth markets and expanding our category leadership, so we can partner with customers better. And that's -- all of those fit into that category. And so we think that playbook is smart. We're effective at it. We are very good at doing integrations. We know when to stop programs, as you know. Maybe that took us a little while longer. But that's the playbook that works really well for the company. And there's -- we're in enough businesses with so much unmet need that there's plenty of things to look at.

Let's talk about size of the company first. You're in a really nice kind of size right now, about $17 billion revenue. You've got a bunch of growth drivers that can move -- really move the needle for you. Sometimes, when companies get too big, they get a little cumbersome and harder to manage. How do you think about the path forward? I mean, would you ever consider divesting some things that don't make sense or don't grow as fast?

We always look at it. There's nothing top of mind that we want to do at this point. But we were $5 billion. Now we're $17 billion and will be quite a bit bigger than $17 billion at the end of this year. So the company has gotten larger, but I think we've proven that as we continue to get larger, we can walk and chew gum at the same time. We can still be very agile. You have to focus every day on how to get better, how to reduce bureaucracy, how to make the company more agile and have that very intentional part of your DNA. If you don't do that, then you become a bigger, slower company. But we are not going to be that. And we have the innovation cadence and the mindset to -- despite getting larger, to continue to grow at a highly differentiated rate and improve margins. And we have the portfolio and the people to do it.

Okay. Maybe just wrapping up. Mike, over your time at Boston Scientific, you've really transformed the company. The stock has performed exceedingly well. What's left to accomplish? How do you think about the next 5 years -- next 5, 10 years?

It's easy. It's an awesome company. It's a great industry. And our goal is -- my goal is to have the most differentiated company for the next 5 years, the next 7 years. And there's so much patient unmet need. It's a great business. It's competitive. We have a phenomenal team. And we don't look at -- we don't look back last quarter. We were -- are focused on how do we get better today.and how do we become -- how do we differentiate in 2030. And we're able to do that, and our team is very committed to that. And it's very inspiring that's what we want to continue to do.

Thank you, guys. All right.

Good seeing you.