Boston Scientific Corporation ($BSX)

Hi, everybody. I'm Lee Hambright, U.S. medtech analyst at Bernstein. We're very pleased to kick off the strategic decision conference again with Boston Scientific. We've got Mike Mahoney, Chairman and CEO; and Ken Stein, Chief Medical Officer. Thanks so much guys for being here.

Thank you for having us.

For those of you in the audience, if you have questions, we can -- you can enter them in the pigeon hole tool. I will try to work in as many as I can. Mike, kicking off your 15th year at Boston Scientific and you've transformed the company from flattish growth when you joined to 16% organic growth over the past couple of years. 2026 is a little bit of a transition year. Maybe you could kick us off with a few thoughts on the state of the business.

Sure. Good morning. Thanks for coming, everybody. As you said, we're very proud of the company and what we've built over the years. The markets that we're competing in. We think we still compete in markets that grow at least 8% as we said at our Investor Day last year. So we've really positioned ourselves in the right growth markets. You've seen some recent announcements with the Penumbra shareholder vote investment in MiRus and other investments. So we really invest for the company to be differentiated for the long term. Proud of the results the last couple of years, this year has been a bit more of a challenge than we anticipated. As you know, unfortunately, we did take our guide down earlier in the year to 6% for full year. And so at those levels, and 5% to 7% for second quarter, 6.8% for the full year. So we're comfortable within those guidance ranges for the second quarter and for the full year, and we continue to invest for the future across our businesses. And our goal always is to grow faster than our WAMGR, to drive double-digit EPS growth to improve margins every year, which we've done every year and with that guide that we said, we're still comfortable that we can deliver the margin improvement and the EPS goals that investors expect as we invest for the future and to get back to a differentiated growth profile.

Great. Great. Okay. Maybe you could just comment a little bit on the health of underlying markets. There's been some questions about utilization trends and potential headwinds from Medicaid cuts or expiration of the ACA exchange subsidies. What are you seeing in terms of just general market trends?

In the markets that we're in, we don't see any slowdowns or a significant impact by those events. We have actually seen a bit of an increase in backlog with WATCHMAN, which we'll talk further on we see healthy volumes in EP, healthy volumes across inventional cardiology. So we haven't seen a slowdown in the overall procedure mix and rate globally for Boston.

Yes. Great. Okay. As you mentioned, you're guiding to 5% to 7% organic growth for Q2, 6.5% to 8% for the fiscal year. What -- you took the guidance down, as you said, and I know you don't take that lightly. What changed from early Feb late April? And what's your level of confidence in those growth ranges today?

Yes. As I said, we're comfortable within the guidance range for 2Q and full year. The 3 impacts that we saw that -- we're a bit unanticipated. The first one that was the largest unanticipated one, really is WATCHMAN. We are the 91% share leader in WATCHMAN. We do have another competitor, but we're primarily the market at this point in time. And we're coming off multiple years 2025 of, I think it's about 30% growth or so and tremendous growth in Concomitant. And so what we saw what we've seen with the -- post the earnings call is a decline in stand-alone WATCHMAN growth and increasing concomitant growth. So we've taken our number down in WATCHMAN internally to match that guide. And we obviously aim to cure that over time. And we'll talk more about that. The second area is EP, our EP business, really proud of what we've done. We went from a distant fourth place, really nonplayer NEP to a strong #2 globally. We expect to continue to be the PFA market share leader. And we have some really robust launches, I'm sure we'll get into coming up here. But essentially, we provided more space for some additional market share reduction as competitors continue to launch. And we're seeing that now. So we took our guide down a bit in EP. And the third primary one is urology. We're the #1 global share leader in urology, but we saw some softness in our performance in that area. So really a combination of those 3 things we felt it was prudent to take the guide down.

Got you. Okay. Great. We'll dig into all this. Consensus growth forecasts have reset to around 8.5% for fiscal '27 and '28. I don't know if you're ready to comment on those at this point. But I wonder if you could just help us think about the key drivers across the company that are rating or decelerating into 2027?

Yes. We'll provide an update on our 3-year LRP likely after the third quarter earnings call. So we're not going to give any numbers on '27 or '28. But if you just look at the -- our business is all about our people and our portfolio. And we have a lot of super exciting portfolio initiatives happening in those time periods. We'll talk about EP quite a bit. Remember, our next-gen FARAWAVE Ultra product coming out. We have a FARAPOINT product now. We'll enter the ICE market. And we'll start our IDE with FARAFLEX. So we really expect to expand the scope of procedures we are in EP. That market is growing very healthy. And we expect to maintain PFA leadership and get back to share taking over that time period. So a lot of key launches there. We'll also launch the next-generation WATCHMAN platform in that area. But I think the biggest business impact you'll see besides ongoing discussion on EP and WATCHMAN, as you look to the future, it really is across our interventional cardiology, vascular and assuming Penumbra closes, the combination of those businesses. will be very powerful for the individual cardiologists factor the surgeon, interventional radiologist. And we have a lot of launches to compete in the IBL offering which will start in 2027 at coronary. You saw the PCR, the FRACTURE results, which is really encouraging. So we expect to have the big years with FRACTURE. We've got a differentiated hypertension device that we expect to be launching in '28, invest a lot in circuitory support for high risk PCI and shock. We have the Penumbra acquisition in the future. And you saw a recent investment that we've made in MiRus to enter the TAVR space. So there's a lot of significant growth drivers in that time period.

Excellent. Okay. One last 1 before we get into the businesses, Boston Scientific can be a little bit intimidating for generalist investors. You've got a lot of products -- so maybe for the generalists in the audience, how do you simplify Boston side, simplify the story, explain what's different about you versus your medtech peers?

Sure. I think it's a great company. biased. We're primarily interventional medicine company. So the vast high majority of our products are procedures that are done where patients in and out of the hospital or the surgery center same day. And we really disrupt a lot of the former surgical procedures. And so the makeup of the company is 8 business units. Think of 5 of them cardiology, including oncology and then 3 of them. MedSurg. And what we try to do for many, many years is a combination of our internal organic R&D, which we invest about a little over 9% in -- we've got the largest venture fund in medtech. We leverage that capability, and we acquire companies and invest in companies from the venture portfolio, and we are pretty active in M&A. So the combination of those 3 things, we use to fill in any product gaps. And to move into higher growth markets, but all within a common call point. So we call that category leadership. So if you're a urologist, we want to have the widest portfolio covering urology groups and differentiated technology. And that's the same thing whether you're in endoscopy, neuromodulation or our cardiology divisions. So we really try to provide a suite of products across that call point with differentiation in there. And we continue to find faster growth markets that leverage those call points. And that's why our WAMGR consistently grows over many, many years.

Great Okay. Excellent. So let's get into WATCHMAN. Mike, on the Q1 call, you touched on several factors that might be contributing to the decelerating growth for stand-alone WATCHMAN. Are you still seeing that deceleration? And can you share your latest thinking on what's driving that trend to.

Yes. It's a bit -- it's been a challenge for us because I said we're really about the 90%, 91% market share leader in that area. We're coming off about 30% growth rate, and we're very excited Ken can talk about our Champion results, which was a significant trial, which we think over time will give us a label change and hopefully, over time, reimbursement and also triple the size of the market. So it's a very important trial that we're very pleased with the results there. What's happened in 2026 as we've seen a declining usage of WATCHMAN stand-alone procedures. And we've seen an increase in concomitant procedures. So the good news is the concomitant continues to grow, and that's where we have our FARAPULSE and our WATCHMAN combination and based on option and Champion continues to go up. But the issue we're seeing where we're seeing a continued declining trend as a stand-alone WATCHMAN and across the interventional cardiologists and EP. And part of it is workflow-oriented where EPs are very, very busy with ablation. Now they're doing more and more concomitant. And as a result, so far, they're doing less stand-alone procedures in a week. So we need to get back to stand-alone WATCHMAN days for EPs and we've seen a decrease in stand-alone procedures for the interventional cardiologists. They may not be seen as many referrals, there's some other structural options out there. And so we are reengaging the interventional cardiologists with more dedicated focused specialists in the field, more medidevents. But as a result, with the declining stand-alone WATCHMAN and growing concomitant -- we basically want to set an expectation of flat dollar growth from first quarter to second quarter and likely in the third quarter given the dollar sequential comps in those quarters. So we're comfortable with our second quarter guidance within that range and for the full year guidance within the range with that WATCHMAN slowdown in stand-alone.

Got it. Okay. So I know you've cranked up commercial intensity, as you said, on interventional cardiologists to get the focus back to stand-alone WATCHMAN procedures. What are the key messages you're working to get across at this point? And what kind of reception are you getting there?

Do you want to highlight Champion there.

Yes, why don't I take that. I think we are still very [Technical Difficulty] Again, it's issues to date in terms of operational issues and operationalizing concomitant pre -- we do believe that there are fixes to that. We do need to get more folks trained in doing WATCHMAN. We see a lot of demand for training at this point from folks who have them doing procedures previously. And the thing that drives that strength and that demand, and we still really do see very robust demand from patients for this procedure is data from trials like option like Champion. And these trials do prove, I think, to everyone's satisfaction in the implanting community and in the referring community, that Watchman is a reasonable alternative to lifelong blood thinners for patients who are at high risk of stroke, that it provides equivalent or near equivalent protections for stroke with a much lower risk of clinically important bleeding. And the one headline number from Champion that I don't think people have given enough attention yet. Actually, it doesn't come from the WATCHMAN results. It's the blood in our results. So this is a group of patients who are picked because they believed to be low risk of bleeding, great candidates for being on blood thinning medications, all right? And 1 in 5 of those patients have a clinically significant bleeding event within 3 years, right? We talk a lot about the opportunity for indication expansion. But even if we look within the existing indication, this therapy is still underpenetrated. And there's still a lot of patients out there who just can't tolerate these medications over the long run.

Yes. Got it. Excellent. Ken, I know you talked about hospital capacity is one of the headwinds that you mentioned related to slower stand-alone WATCHMAN. Edwards ran into a capacity issue a while back, and it took them 3 quarters or so to bounce back -- is that the right expectation here? Can you just talk a little bit more about the capacity issues?

Yes. I don't know that I'd compare one versus the other. It's a bit of apples and orange. It's a very different kind of set of procedures. I think what is fair to say are -- again, first of all, doing concomitant procedures does raise a host of operational challenges that, frankly, hospitals cathlab hadn't had a confront before. So people are just still thinking through how do we do these procedures together. We love concomitant FARAWATCH procedures because both FARAWAVE and WATCHMAN together give us a fantastic protection around that procedure. If you're going to do that procedure, you want to do it with the fastest, safest, most reliable technique, and that's both FARAPULSE for the ablation part of the procedure and WATCHMAN for the appendage closure part of the procedure, but it does complicate scheduling, right? And so we are now working with hospitals, how do we unlock that, right? What can we do to improve the operational efficiency of the concomitant procedure. The other thing that we are dealing with right now is there's competition for space, not just doing WATCHMAN, but the other kinds of procedures that are done in those labs. And so for electrophysiologists, that's ablation. We are still seeing robust growth in the AF ablation market. One of the safety valves for that is the move for the more simple ablation procedures into the ASC, ambulatory surgical center. But that will take time to play out. And so I think the key message here, right, is that's not going to be an overnight solution to any of this. This does take years to play through as well as right, taking years to play through getting better presentation the guidelines based on Champion results and option, getting better or revision of the national coverage decision in the United States for payment for procedures. And I think that's why what Mike says is it's -- again, it's going to have that deceleration over the short term. But that's why we're still confident over the long run in this return to a very fast-growing market.

Yes. Excellent. Okay. how much pushback are you getting regarding closure data? And do you think your key messages on Champion are kind of fully offsetting that pressure?

Yes. I think the closure is a difficult study. It did get published in a journal medicine a week ahead of Champion, and that did have some impact. And frankly, more impact than I had expected based on the quality of that data and based on what's actually in that data. And the other thing that hit us is WATCHMAN has always been polarizing. And there's a very small but very vocal group of people out there who are Watchman haters. And they were out trashing Champion even before the data were out. whereas we had our hands tied behind our back. We couldn't prepromote the data. We couldn't talk about the results until the data were out there, all right? But now we are out educating people. And when you educate people about closure, right? Again, closure, fewer than half of the devices in that trial were WATCHMAN FLX. It was mostly done with legacy devices and with competitive devices. In spite of that, it actually showed equivalent protection from stroke in a very high-risk group of patients. Trial failed because they had bleeding events and procedural complication rates that are a literal log order of magnitude higher than what we see with WATCHMAN FLX. What we actually saw and published in Champion. So again, I think we have confidence that we can get out there now and through our professional education events through our marketing, get out there and combat this narrative around closure and get people to focus on what's really important, which is right, there are patients out there who are at high risk of stroke who have a very high rate of clinically important bleeding when they're treated with blood thinners. And they can be managed very safely, very effectively with WATCHMAN.

Got it. Can you just talk about the time lines? Have you submitted Champion to the FDA? Can you give your just latest thoughts on timing for label expansion and guideline updates changes to NCD?

Yes. We have submitted to the FDA. If you figure call it, 9 to 12 months when you have a PMA supplement to get approval, that's a reasonable time line to expect again, based on the strength of the data, we are confident that we will get that label update. Guidelines probably work out in parallel, the guideline process is a very slow bureaucratic encumbersome one, but we have been talking to the societies. The last step in that unlock is getting CMS to revise the national coverage determination. And we won't approach them about that formally until we have the label update.

Yes. Got it. Okay. Maybe wrapping up on WATCHMAN. You've got over 90% share, as you mentioned, in left atrial appendage closure, but you do have a competitor coming with a next-gen product next year. Also, some investors worry about next-gen anticoagulants. What's your level of confidence in the market kind of getting back to 20%-plus growth?

Yes. We -- again, based on the strength of data from trials like Champion, we do believe that in the long run, we can get back to that kind of hyper growth, if you will. Having a competitor, it raises challenges, but frankly, it also helps sometimes in terms of getting the messaging out there about the utility of this kind of therapy. Likewise, I know there are folks out there concerned about the next generation of blood thinning medications is the so-called Factor XII inhibitors. There's 1 -- there have been 2 oral agents that have been studied. One was studied for this indication, stroke reduction in atrial fibrillation and failed. So I don't think there's any guarantee that the other agent is actually going to pass its trial. Even if it does, I think, a, it raises the awareness around the importance of bleeding reduction in terms of addressing patients with Afib or at high risk of stroke. Depending on where those things get priced, are those just going to be used as second-line agents in patients who fail oral anticoagulants. If so, there are still a lot of patients out there who would prefer a one-and-done approach as opposed to taking a lifelong of drugs that still have a risk of bleeding that are still expensive. And if you're a 60-year-old with atrial fibrillation, you're talking about taking these kinds of pills for 20, 30, 40 years. Do you really want that?

Yes. Got you. Okay. Great. Okay. Let's move to EP. Maybe starting with Mike, you've got a vision of the world where PFA becomes the dominant energy source. Yes, there's been some pretty strong interest in dual energy catheters in the early days. How do you compete with dual energy catheters? Does FARAPOINT fill that gap?

Yes. We think PFA clearly has become the market-leading therapeutic catheter. We estimate utilization in the U.S. went probably like close to 70% last year, probably approaching 80% this year. So I think that rate has kind of been won by PFA. -- outside the U.S., it's not quite as high as that, maybe 50% and very low penetration so far in China, which we're working on as well as other companies are. In Japan, similar, a little bit less in the U.S. but high numbers. So we think PFA will continue to expand. And our key for Boston is to expand our portfolio to really to be the PFA choice for across all the different clinical needs based on the FARAPOINT product that we have. We have a next-gen FARAPULSE ultra coming. And then we have a FARAFLEX, which we expect to be an ID this year. So our goal is to continue to broaden the portfolio and I think you'll continue to see a PFA usage continue to increase that utilization. We'll get over to 90%. I'm not sure. But at least 80% likely by the end of this year or in 2027.

Yes. Okay. Got it.

And maybe just to add to, again, when Mike ran through that was to catheters. So our focus is on continuing to have the world's best portfolio of PFA catheters. And we're starting to see now with some of our competitors as they're getting more clinical use. There are issues that can arise with trying to push RF onto a catheter that's designed to be a PFA catheter. Likewise, we've seen with competitors issues when they take a catheter that was designed to be an RF catheter and try to push PF through it. And so we -- just remind everyone, all PF is not created equal. And getting safe and durably effective results require a combination of optimizing the waveform optimizing catheter design and optimizing the recipe, just the actual where do you deliver lesions and how many do you deliver? And we are laser-focused on all 3 of those in terms of evolving our PFA catheter portfolio.

Excellent. Okay. You've got a competitor who's in the early days of a single-shot balloon catheter launch in the U.S. There's also some upstart nanosecond PFA technologies we hear about sometimes. How do you think about the competitive environment and how it evolves in the PFA space?

I mean it's certainly a challenging competitive environment. I think everyone here who's following this space, recognizes that. In terms of the balloon catheter, one of the things that's been one of the big advantages of the FARAPULSE platform has been its versatility. And the ability to use FARAPULSE not just for pulmonary vein isolation, but for doing other lesions, particularly putting lesions in on the backlog post your wall, the left atrium. And balloon catheters just intrinsically don't have that degree of flexibility. So in Europe, where that catheter has been available for some time now, we really still do see continued robust usage of FARAPULSE. In terms of some of the other novel technologies out there, a, you can imagine, we remain very engaged as we look at our business development opportunities. Mike mentioned, RVC portfolio, but we also have a lot of internal expertise at this point in how do you optimize wave forms forgetting the best possible results with any individual catheter form factor. It's an advantage that we have that sort of that first-mover advantage, the huge number of patients who've already been treated with FARAPULSE system. We've got a lot of internal knowledge now that we think puts us in pretty good shape versus some of these start-ups.

Great. Okay. How important is integrated imaging and mapping? And can you just remind us where you are with new launches on that front?

It's very important. So we've said for a number of years. So we've really built up a significant presence around the world with our mapping capability with OPAL. Every quarter, we're placing more and more OPAL units. Every quarter, we're having higher certification levels of our mappers. And so that momentum continues to build and continues to be our focus. So as we continue to broaden the portfolio, as Ken talked about, with our FARAPOINT launch we have now with integrated ICE with FARAPULSE Ultra and with FLX, you broaden the portfolio mix of procedures you can do in that lab. -- beyond PVI and posterior wall, which is a great place to start from, with a market share leader. So as you continue to broaden the portfolio, you continue to enhance the mapping capabilities. You can continue to extend the type of procedures you can do and you develop strong relationships in the lab. So we've put significant investment in the U.S., Japan, China, all over Europe. And every quarter, we would launch more OPAL mapping systems a quarter. We advanced our software. Every quarter, we advanced our pipeline. And so we're really proud of our market share position today. and feel like the mapping component is as important as our therapeutic catheter cadence that we have.

Great. When does ASC start to move the needle?

It's going to be small numbers. What I would say, 10% to 15%, Lauren, over maybe 2 years of the AF ablation. So you're seeing some activity now for sure. Obviously, in the U.S. in certain states that allow for cert need or reimbursement. So you're seeing some activity now, contracts being written, and that will help some of the workflow issues or items or opportunities, I should say, that Ken outlined that we discussed earlier. So you'll see more and more of that in '26, '27, '28. We estimate maybe 10%, 15% of the market.

Yes. Got it. Okay. Mike, what's your -- maybe punchline on EP, what's your level of confidence that this is a low year for Boston Scientific EP growth and can you get back to a share-taking position in 2027.

That's obviously our goal. This year, as the PFA leader, we have lost some market share as competitors are launching and the whole key there is the cadence of portfolio that we have that we've outlined. And so as you continue to extend out in '27, '28, '29, that portfolio comes through and you have increased scale of mapping. So we're quite comfortable that we'll continue to be the play market share leader as we continue to -- I think the R&D teams have done an excellent job in that area. We know all the start-ups you're talking about. We have a lot of confidence in our pipeline and the momentum that we have.

Great. SP1 Okay. Let me just touch on urology. Urology organic growth has decelerated for 3 quarters in a row. I know you've got a lot going on there. What gives you confidence that Q1 was kind of the trough there and that things are looking up from here?

Yes. Urology is a really nice business for us. It's traditionally been a 7% to 8% grower. We think the market grows 7%. We're not used to growing below market in that category, we will this year. We're fixing a couple of specific areas. One in our core stone portfolio, where we've seen some niche competitors come in and sometimes the price competitors. And we aim to fill some product apps with pressure sensing in suction and other improvements to our core stone portfolio. One has been launched recently and you'll see a cadence of launches over the next 9 months to really improve our performance in core stone. And the second big area has been Axonics, a really nice technology to treat overactive bladder for women. We had a lot of commercial disruption in that category. You need highly trained clinical reps and sales reps to implement that strategy. So we've hired about 100 of them. And they continue to be comfortable impact improve the performance of Axonics as we go throughout the year. So we're comfortable that urology won't be back to market growth this year but should improve from the first quarter performance.

Okay. Great. Let's touch on TAVR. So you've had a couple of high-profile disappointments in the TAVR space strategically. Why do you need to be in the TAVR market? And what did you learn from LOTUS and ACURATE.

Well, we've learned a lot from LOTUS and ACURATE. But we also learned a lot from our EP days. They weren't maybe as big, but we had 2 big failures in EP before we found FARAPULSE. And FARAPULSE really changed the game for EP. And with TAVR, it's a fantastic market with mitral and tricuspid as well. That is one large competitor and we see -- and we've stated all along that we wouldn't want to enter the TAVR market unless it was a bloom expandable unless we had the potential to disrupt similar to how FARAPULSE has disrupted a very big mature where there was a clear dominant market leader in EP. So we see similar traits to what's happened with FARAPULSE and EP with TAVR. But that product -- to find that product that's differentiated is hard to do. And so we've had 2 ifs at it with LOTUS and ACURATE. We've been following MiRus for many, many years. It's a very unique company that started off. It's got a special alloy called Rhenium and he is very smart and playing for the long term and created the spine company, leveraging this material to prove to the FDA the capabilities of this new metal alloy all with the goal of creating a disruptive TAVR company. And so we've known the company for quite a while. Our competitors have known the company. There's really outstanding clinical results early on, and then now they're approved for all 3 sizes in all 3 risk indications and roll in the clinical trial now. So we see MiRus with the potential to really disrupt what is a very large fast-growing market that's right in our wheelhouse and cardiology.

Great. Ken, maybe one that Siegel valve does come to the market in late '28, early '29, it will have been over 20 years since TAVR was first approved in Europe. Clinicians are obviously increasingly focused on durability. How can you compete on durability with limited data at launch?

Yes. Well, I think we just come back to what the advantages are of the Siegel valve, and that's the valve that MiRus is developing. And of course, this all does need to get proven in the technical trial that is currently enrolling. But using that Rhenium alloy, this is not just evolutionary. This is a truly revolutionary step change in these valves. The alloy gives you a huge number of advantages based on its durability as a metal and its strength. And so to begin with, this valve is dramatically smaller profile than the conventional valves, whether it's Edwards, whether it's Medtronic. This has delivered an 8 French system, whereas today's conventional valves are the 14 French or higher. And with the huge issues you have today with TAVR vascular complications, you can anticipate that with smaller size, you have to end up with a lower rate of vascular complications, better ability to deliver the valve through Tortuous anatomy. In addition, the valve doesn't force shorten when you expand. And so what happens in today's valves is they shrink down a little bit when you expand the valve, makes placement a lot more difficult as an operator, it can be much more precise with the implantation of this valve because of the strength of the uranium alloy, you have much better concentricity and cylindricity of the valve. We do believe that the valve as a result, we'll have much clinically importantly, lower valve gradient so as obstruction to flow through the valve. We believe because of all of these is that there'll be a lower rate of permanent pacemaker implantation. So we're talking about a valve that based on its design, we anticipate will be easier to implant, will be associated with a lower risk of operative complications and will be associated with better hemodynamic results over the long term. And it gets back to what Mike was saying, right? This is, again, not just a small evolutionary change or me-too valve. This is something that's just dramatically different and tangible differences that will be obvious to operators and have been obvious operators who've participated in the clinical trials from day 1. Again, established competitors, it takes time to displace them. But with that long laundry list of advantages, we're extremely optimistic about this valve.

Okay. Great. Maybe just 1 quick word on the clinical trial. The STAR pivotal trial, 1,000 patients head-to-head powered for noninferiority. It's got secondary endpoints on vascular complications and hemodynamics, as you mentioned. What data do you need to see from that trial to give you confidence that the valve can compete?

So I think, again, the key is being able to show the noninferiority and being able to get labeling approval. And with that, again, the folks who've handled this valve the advantages are just so -- I mean, I'm trying to think of a nice way of saying this, but they are just blindingly obvious, right? It's -- there are very few things that substitute for operator experience, putting in something or using something. And the operator experience using the Siegel valve is a step change versus using today's incumbent technologies.

SP1 Okay. Excellent. Okay. Let's talk about some other drivers across the business. Mike, the ICBT business was very strong in Q1. Can you just talk a little bit about the outlook for that business?

It's very strong. really impressed with what that team has done. They continue to really enhance that portfolio globally. It's one of our second largest business behind EP and growing at a very high growth rate now really being led by the whole strategy is see, prep and treat. So our see piece of this is our IVUS imaging. So you've seen imaging, which is very strong in Japan and Asia, really becoming dominant modality and or up in the U.S. now and continuing to grow. So we're the market leader in IVUS. We continue to roll out new capabilities with IVUS leveraging AI capabilities to improve the efficiency of the lab and the precision and the physician. And then the treat components, we have multiple products in that area. And then we're excited about the recent FRACTURE news and the launch of our seismic platform for IVL in 2027. And then the treat piece of it, we have obviously a number of stents and various products, but our agent drug-coated balloon is performing extremely well. We're the market share leader there, and we have what's called the STANCE Trial. The STANCE Trial to widen the indication for the balloon capabilities. Then we have so many, many products further out in that pipeline, as we mentioned before, with hypertension. The Penumbra post-closing will fall under that business. Our Silk Road acquisition has done extremely well within our vascular business. We've got a number of pipeline products in that area. So I really think beyond the ongoing EP, which is a great market, and we tend to continue to be the market share leader with cadence. We'll work through the workflow issues with WATCHMAN and expand that market indication, get the labeling done and get back that to growth. But that whole combination of IC VT, not a great name. Really will be, I think, a unique growth driver for the company across that comprehensive portfolio for many years to come.

Great. Great. Let's just touch on CRM for [indiscernible].

And the Siegel valve will also fall under that over time, of course.

Got you. CRM growth was negative in Q1. How do you get back to growth in CRM?

Yes. CRM has been a tough one for us. Our challenge has been we've been -- we've got a strong core DFib pacemaker portfolio. We've got an important launch called Denali, which is a whole new platform for core defib, CRT-D pacing that would be coming out in kind of '27, '28 time period along with S-ICD. So that should revitalize that group better than it has performed better than it has been historically. Our gap continues to be in leadless, which is the higher growth area. And so we do have our payer leadless program with S-ICD, which have launched in 2027. So that should improve it. So we're not going to likely grow faster than our peer group in the short term. But as that Denali platform gets launched in our emblem with S-ICD leadless pacemaker, that will help our growth in our CRM business.

Okay. Great. Ken, anything else in that area.

No.

Got it. Great. Let's touch on Penumbra. So what do you like about neurovascular and peripheral vascular spaces and how are Penumbra's platforms differentiated versus key competitors?

Little vascular space, we're the #1 -- likely the #1 player in that business now. We just don't have a mechanical thrombectomy solution. And years ago, we got rid of our neurovascular business, which is crazy. And so we've always liked neurovascular. So those are the 2 areas that were really big growth markets that are WAMGR that are accretive, at least on the thrombectomy side, to Boston Scientific, which is hard to do at that at least 8% growth. And Penumbra is a gem of a company. They're really very high strong share position in thrombectomy, high strong share position in neurovascular, very exciting pipeline of products that you're aware of that are coming through, hopefully, by the end of this year in -- and so really fills 2 gaps in our portfolio in peripheral vascular that we didn't have. We have still grow a nice acquisition for vascular surgeons. But it's 2 big categories that have great wagers that we did not have a presence. So it fills that strategic niche very, very well. And it's an excellent company, a very strong scaled commercial force. We'll run it as a stand-alone business within Boston under Lance Bates who runs that ICBT area. And so our aim is to retain that commercial team, we retain that R&D team and let them continue to run but drive appropriate commercial capabilities across that wide portfolio of products.

Great. How are you feeling about the regulatory process and kind of just confidence in closing of everything on track?

We just had the shareholder vote that went well, and we said second half 2026, and we're kind of proceeding that as planned.

Great. Okay. So at $15 billion was obviously a larger deal than the tuck-ins that we're used to seeing from Boston side, skeptics have keyed in on the timing as EP and WATCHMAN are decelerating, what do you say to investors who worry that the deal was maybe defensive or too big? How do you think about.

We've liked Penumbra for years. And the timing worked out with Adam and the team when we announced this year. So that would have been an acquisition we would have done 3 years ago where we would do 2 years from now if we could do it. So it made a lot of sense for the reasons I said earlier. On the strategic side on the portfolio. It's an increased growth rate for the company. We'll be able to drive capabilities around the globe that they lack in Europe and Asia Pac. And we'll be able to drive some better operational synergies in the supply chain and manufacturing. So that deal just made a lot of sense for us. The financial returns are healthy, and the timing worked out when it did.

Great. Okay. Before we zoom out a little bit, just a question from the audience, just a clarification. I think you mentioned earlier expectations for WATCHMAN around Q2, Q3 just clarify a little bit what you meant there flat dollar?

Yes. But we -- what I mentioned is we expect -- we've seen the declining stand-alone WATCHMAN, and we're being as forthcoming as we can, sharing what we're seeing. We're learning a little bit from what happened in January in EP. So we've seen a declining stand-alone growth rate, increasing concomitant. And so what I mentioned is we expect to see second quarter dollars in WATCHMAN similar to first quarter dollars. We had very, very strong sequential growth in 2025 in 2Q and third quarter. So we expect to essentially see a flat dollar growth in 2Q and 3Q with WATCHMAN. With that guide, with that information, we're comfortable within our second quarter guidance range and our full year guide range.

Yes. Got it. Okay.

So if it gets better than that, there's more upside. But what we want to do is say, based on the downward trend we're seeing in stand-alone, and we have all these initiatives with label changing, all the med-ed events, all the educational events to improve stand-alone. But assuming stand-alone doesn't get better and the sequential growth, dollar growth stays the same. That's what we're mentioning here in second quarter and third quarter. With that framework, we're comfortable within the guidelines of our second quarter or full year guide.

I mean global WATCHMAN revenue in Q2, Q3 kind of flat to where it was in Q1.

Correct. On a dollar basis.

U.S.

U.S. is 90% of it.

U.S. flat Q1, Q2 Okay, got Q1 to Q2, Q3. Okay. Zooming out, you announced a $2 billion ASR last week. You've got $3 billion left on authorization? How are you thinking about additional buyback opportunities? What's the max leverage you'd be willing to take on?

Yes, we're happy we're doing the $2 billion ASR given where our share price is trading based on the strength of the growth profile of the company as you look to the future for Boston Scientific as we outlined before, with our portfolio. So we think at this valuation, the -- which we haven't done a share repo in a while, we think it makes a lot of sense. And so we think $2 billion is the right number. When we close Penumbra, we'll stretch to a little -- our goal is to stay at that A- level. We'll stretch to a little bit above 3x on our debt ratio. And then we'll continue to delever from there and kind of get back to that 2.5, 2.25 to 2.5 range -- 2.25 to 2.5 range.

Got it. Okay. So as we all turn our attention to Q2 and the organic growth range of 5% to 7%, can you talk just a little bit about the key swing factors that could take you to the high end or the low end of that Q2 range?

Well, it's 40%, not too far away. So as I said, we're comfortable within the guidance range there. And so we've assumed in that range, as I mentioned, the sequential dollar dollar growth -- same dollars from first quarter, second quarter in WATCHMAN, which is a change, but it was contemplated in our guide just to be appropriately safe. And so as you look at that full year guide, -- it's the same big levers we see for is continuing with our EP momentum primarily on the pipeline initiatives we have and the mapping. I give you the WATCHMAN comments. And as we expect, we continue to see strength in Interventional Cardiology and Vascular. And so as we -- those are really the upsides, downsides of it, but in essence, we're comfortable within those ranges.

Got it. Okay. Can you talk a little bit about M&A. You did Penumbra was a little bit bigger deal. Axonics was a bigger deal -- should we expect that to be more of the trend going forward? Do we -- should we expect you to get back to sort of...

No, I don't think that will be the trend going forward. I think there's very few Penumbras out there with companies that have that strong market share position, high growth rate, high WAMGRs and they had that really beautiful strategic fit with Boston Scientific. There's very few assets out there. And so we like Penumbra a lot. We made a big bet with MiRus because we -- it's transformational, and we think it could be the FARAPULSE of TAVR in terms of its potential capabilities. But you won't see bets as big as Penumbra in the near future, one, because of the ratings that we want to have and so forth, but also a scarcity of assets. So I would say traditional more traditional Boston Scientific tuck-in M&A.

Yes. Great. And as you think about focus areas for those types of deals, focus areas for venture investments...

Well, there's a lot of them. We have about almost 50 companies in our venture portfolio. We've been very active off of those. And they're across maybe weighted about 80% to cardiovascular broadly and 20% in MedSurg. So we have a number of assets in that area that we like a lot.

Okay. There was a question from the crowd on mitral and tricuspid, maybe related to MiRus. Can you just talk a little bit about what you've got in the hopper there?

Yes. We are excited about our bets in that area. We think it's important that you have to have a foundational potentially meaningfully disruptive TAVR valve as the anchor product. And we think we have that with MiRus. Have to prove it through the clinical, but we're incredibly bullish on the potential with that. So with that as the likely foundation, it wouldn't make sense to add mitral and tricuspid. We have a number of venture bets in that area. And also the team at MiRus is also creating the tricuspid and mitral platforms, leveraging that same outlay.

Great. Okay. Maybe thinking longer term, you've repositioned that 10% plus organic growth as kind of an upside case over the '26 to '28 time frame, but you're sticking to those op margin expansion goals. What's the right way to think about Boston Scientific over the next few years?

Well, I would say short term, kind of that 6.5% to 8% is our full year guide. We've improved margins every year for 14 years in a row. I think we've delivered double-digit EPS almost every single year. And so that will be our continued goal this year to hit that double-digit EPS growth, improve margins with that full year guide. And as you look at the future of the company, it's all on this innovation pipeline, improving share in EP, addressing this WATCHMAN, call it, workflow issues as we widen the patient indication for that and continue to have clear market leadership in WATCHMAN and really building off that ICBT portfolio we talked about and then strengthening our businesses in MedSurg. Neuromod is doing very well this year. We continue to expect them to grow nicely above market. Endoscopy will have a solid year this year and improve our urology business. So I think strengthening of the overall MedSurg business, but very unique growth drivers across cardiology that position the company for unique growth in the long run. And we always continue to improve margins and drive double-digit EPS based on our track record.

Great. Okay. Maybe wrapping up, Med tech stocks have pulled back. Boston is trading at a significant discount to historical multiples. What final thought do you want to leave investors with here?

Well, that's why we did the share repo. I just -- I think if you look at med tech, you ask about procedure volume. It's basic stuff. It's an aging population. These are less invasive procedures that have a massive impact on sustaining lives or improving lives, whether across our businesses. And so the volume is there. And the innovation cycle that we have for the future is very, very robust. And we have a very disciplined company when it comes to improving margins and driving EPS growth. And so like any cycles, med tech as a sector is below the S&P quite a bit this year, where it hasn't been for many years prior. So our job at Boston is to continue to drive performance this year and to invest for the future to deliver long term. And over time, the sector performance should improve.

Great. All right. We're out of time. Thank you, [indiscernible] for being here.