Boston Scientific halves expected tariff hit
By the numbers
Q2 sales: $5.06 billion
22.8% growth year over year
Cardiovascular sales: $3.35 billion
26.8% growth year over year
Electrophysiology: $840 million
96.1% growth year over year
Boston Scientific on Wednesday halved its expected tariff charge for the year, following other medtech companies that have cut outlooks on financial impacts from the Trump administration's policies.
CFO Jonathan Monson told investors during a second-quarter earnings call that the company now expects a tariff charge of approximately $100 million. Boston Scientific forecast a charge of approximately $200 million during a first-quarter call in April; however, the company signaled at an investor event in May that it would likely update its forecast.
Boston Scientific is the latest medtech firm to lower expected costs related to tariffs after companies across the industry projected that they would absorb hundreds of millions of dollars in additional costs during first-quarter earnings calls. Johnson & Johnson similarly halved its expected hit to $200 million, exclusively related to the company's medtech business, and Abbott said last week that it expects a $200 million charge, compared with a charge of 'a few hundred million.'
The company expects the $100 million impact to predominantly take hold in the second half of the year.
Boston Scientific increased its full-year sales guidance as part of the company's earnings release. It now expects sales growth for the year in a range of 18% to 19%, compared with a prior range of 15% to 17%.
PFA success continues
Boston Scientific reported another strong quarter for its electrophysiology group as pulsed field ablation devices continue to boost companies' portfolios.
While not the triple-digit growth Boston Scientific has reported in prior quarters, its electrophysiology group still grew by 96% year over year to $840 million. Boston Scientific is growing the use of its Farapulse PFA system in new markets like Japan and China.
CEO Mike Mahoney told investors that Boston Scientific was third to market in Japan, specifically, but is now the 'clear market leader' in the country. Mahoney added that the company is also in the 'very, very early days' in China and is placing a lot of emphasis on what could be a large market opportunity.
The CEO also emphasized that Boston Scientific is growing its future PFA offerings through internal investment, as well as through its venture capital portfolio and partnerships. The company also recently won an expanded indication for Farapulse in people with persistent atrial fibrillation, when an abnormal heart rhythm continues for at least seven days, widening the pool of patients who are eligible for treatment.
Boston Scientific's continued success comes amid a reignited race for market share in the PFA space. The new atrial fibrillation treatment is quickly overtaking traditional treatments like cryoablation and radiofrequency ablation.
Johnson & Johnson reported last week that its electrophysiology business returned to growth in the second quarter, largely due to further PFA adoption. The unit grew year over year by 11%.
Tim Schmid, J&J's worldwide chairman of medtech, told investors on an earnings call that the company is not 'rolling over' when it comes to electrophysiology.
'Given that we created the [electrophysiology] category, for us, this one is very personal,' Schmid said. 'And while I know that several analysts were quick to write us off earlier this year, we continue to remain very confident in our ability to retain our global market leadership position over the long term.'
Mahoney, on Wednesday's call, was similarly bullish on Boston Scientific's ambitions in electrophysiology.
'We not only want to be the clear leader [in] PFA,' Mahoney said, 'but our aim is to be the overall leader in [electrophysiology] in the future.'
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'We are not rolling over': J&J electrophysiology unit rebounds amid PFA rivalry
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