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Boston Scientific (BSX) Product Launches to Drive Q3 Earnings

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Boston Scientific Corporation (BSX - Free Report) is scheduled to report third-quarter 2021 results on Oct 27, before the opening bell.

In the last reported quarter, the company’s earnings per share of 40 cents exceeded the Zacks Consensus Estimate by 8.11%. It beat estimates in three of the trailing four quarters and missed in one. The trailing four-quarter average earnings surprise was 13.41%.

Factors at Play

Top-line growth in the third quarter is likely to have improved sequentially with gradual opening up of the economy and the resumption of elective procedures in the United States and in many regions across the globe. Boston Scientific, during its July update, stated that given an improving scenario along with innovative pipeline, expansion into faster growth markets, globalization efforts and enhanced digital capabilities, it is well positioned to score strong results in the second half of 2021. The company has already seen strong procedure recovery and market share gains across many of the businesses and regions. This is likely to have continued through the Q3 months.

On a geographic basis, in Q3, every market of Boston Scientific is expected to have registered broad-based growth despite COVID-19 related uncertainties. In EMEA, PI, EP, Endo and Neuromodulation are expected to have registered strong growth on robust sales of ACURATE Neo2, TheraSphere, POLARx, AXIOS and WaveWriter Alpha. In Asia Pacific, particularly in China, Australia, and Korea product launches are expected to have contributed to the company’s top line this time. Further, Ranger DCB, Stablepoint and Watchman FLX are likely to  have contributed to growth in Japan.

Within Interventional Cardiology (IC) business, the company is expected to have registered strong growth in Structural Heart Valves, WATCHMAN and Complex PCI and Imaging franchises. The company is expected to report sequential rise in WATCHMAN franchise revenues driven by increasing hospital and physician utilization rates in the United States and Europe. In July, the company stated that nearly all the U.S. accounts had fully transitioned from WATCHMAN 2.5 and are now using FLX exclusively.

In TAVR, ACURATE neo2 launch in Europe is expected to have registered positive performance supported in part by the real-world data presented at Euro PCR. The data demonstrate that the low ACURATE neo2 PVL rate is comparable to contemporary TAVI devices, with continued low permanent pacemaker implantation rates. Further, Sentinel, the company’s cerebral embolic protection device achieved its highest quarterly sales in Q2 with strong new account openings globally. This trend is likely to have continued in Q3.

The company had initiated a global, voluntary recall of all unused inventory of the LOTUS Edge Aortic Valve System. Although there will be no material charges related to LOTUS discontinuation in 2021, there will be a loss of $62 million in LOTUS Edge sales this year. This is likely to be reflected in the third-quarter results.

Within coronary therapies, drug-eluting stents continued to be a challenge from a pricing standpoint. However, the company is expected to have seen strong growth in Complex PCI and Imaging, with particular strength in RotaPro and IVUS.

Within the Peripheral Interventions (PI) business, third-quarter sales are expected to be more resilient to the pandemic, banking on favorable mix of high acuity and outpatient site of care for procedures, as well as a category-leading portfolio and strong cadence of new product launches. Interventional Oncology is expected to have gained from strong momentum in TheraSphere. In Venous, Varithena is expected to report strong Q3 results and gain share in the varicose vein market.

Within Urology/ Pelvic Health, sales of Stone, Prostate Health and Pelvic Health franchises are expected to have recorded strong growth. The Lumenis acquisition is expected to have contributed strongly to the company’s Q3 sales. LithoVue, SpaceOAR and Rezum product lines are expected to have performed strongly. Boston Scientific continues to expect urology/ pelvic health to have one of the faster potential recovery curves, aided by a higher office ASE mix for most elective procedures.

Within Endoscopy, broad-based recovery across regions and growing strength in infection prevention are expected to have driven revenues in Q3.

Within Neuromodulation, the company is expected to have registered balanced procedure recovery across RF (radiofrequency), Vertiflex and Spinal Cord Stimulation on strong execution of category leadership strategy in pain. Further, the ongoing launch of the next-gen WaveWriter Alpha SCS system with Cognita digital solutions and continued clinical evidence generation are expected to have boosted the top line.

Q3 Estimates

The Zacks Consensus Estimate for third-quarter total revenues of $2.99 billion suggests improvement of 12.46% from the prior-year reported number. The consensus mark for adjusted earnings of 40 cents per share implies 8.11% rise from the year-ago reported figure.

What Our Quantitative Model Predicts

Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is however not the case as you can see below.

Earnings ESP: Boston Scientific has an Earnings ESP of -0.63%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Boston Scientific carries a Zacks Rank #3.

Stocks to Consider

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this time around.

Regeneron Pharmaceuticals, Inc. (REGN - Free Report) currently has an Earnings ESP of +11.43% and a Zacks Rank #1. The stock is slated to release its third-quarter 2021 results on Nov 4.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Pulmonx Corporation (LUNG - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank of 2, at present. The stock is expected to release its third-quarter 2021 results on Nov 9.  

TScan Therapeutics, Inc. (TCRX - Free Report) has an Earnings ESP of +13.66% and a Zacks Rank of 2, at present. The company is scheduled to release its third-quarter 2021 results on Nov 18.