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Boston Scientific (BSX) Closes the Relievant Medsystems Buyout

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Boston Scientific, Inc. (BSX - Free Report) recently announced the closing of the privately held Relievant Medsystems Inc. acquisition deal. The company recently secured national coverage from Anthem Blue Cross Blue Shield and Humana, both currently effective, for its minimally invasive Intracept Procedure.

The recent development expands and strengthens Boston Scientific’s neuromodulation division, which develops and manufactures devices to treat various neurological movement disorders and manage chronic pain.

Financial Terms

The acquisition, originally announced in September 2023, includes an upfront cash payment of $850 million and undisclosed additional contingent payments based on sales performance over the next three years. On an adjusted basis, the transaction is expected to be immaterial to adjusted earnings per share in 2024, slightly accretive in 2025 and increasingly accretive thereafter.

On a GAAP basis, the transaction is expected to be more dilutive due to amortization expenses and acquisition-related charges.

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Significance of the News

Relievant’s Intracept Intraosseous Nerve Ablation System is the only FDA-approved therapy to treat vertebrogenic pain — a form of chronic low back pain. The same-day, outpatient procedure uses targeted radiofrequency energy to stop the basivertebral nerve from transmitting pain signals to the brain and takes approximately one hour to perform.

The favorable coverage policy from Anthem Blue Cross Blue Shield is the latest in a series of recent positive coverage determinations for the Intracept Procedure. These national payers join Cigna Healthcare and local Medicare plans, enabling more access to treatments for people living with vertebrogenic pain. Together, these policies expand access to more than 150 million lives.

Strategic Benefits

The novel, clinically backed technology will be an addition to Boston Scientific’s chronic pain portfolio, which includes spinal cord stimulation, radiofrequency ablation and an interspinous spacer procedure. Per the company’s spokesperson, the revolutionary therapy from Relievant has tremendous potential to help even more people living with chronic pain.

The completion of this acquisition further differentiates BSX’s position in advanced interventional chronic pain, offering physicians the broadest selection of evidence-based treatment options that address multiple pain targets and change patients' lives.

Industry Prospects

Per a report by Fortune Business Insights, the global chronic lower back pain treatment market was valued at $2.21 billion in 2022 and is expected to witness a CAGR of 9.5% by 2030.

Notable Highlights of the Neuromodulation Business

Last month, Boston Scientific received FDA’s approval for an expanded indication of the WaveWriter Alpha Spinal Cord Stimulator Systems for the treatment of painful diabetic peripheral neuropathy — a complication of diabetes that can affect the lower extremities of the body. The portfolio was previously approved by the FDA in December 2020 for the management of chronic intractable pain of the trunk and/or limbs, including unilateral or bilateral pain associated with the failed back surgery syndrome, complex regional pain syndrome types I and II, intractable low back pain and leg pain.

Earlier in July 2023, the company secured the FDA’s approval for the Vercise Neural Navigator 5 Software. With STIMVIEW XT Technology, the software is the latest addition to the fully integrated portfolio of image-guided programming solutions for Boston Scientific Deep Brain Stimulation Systems.

Price Performance

In the past six months, Boston Scientific shares have risen 1.5% against the industry’s fall of 14.6%.

Zacks Rank and Key Picks

Boston Scientific currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , Insulet (PODD - Free Report) and DexCom (DXCM - Free Report) . Haemonetics and DexCom each presently carry a Zacks Rank #2 (Buy), and Insulet sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics’ stock has decreased 0.3% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and $4.07 to $4.11 in 2024 in the past 30 days.

HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.

Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have dropped 6.2% in the past year compared with the industry’s decline of 37.4%.

PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.

Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.43 in the past 30 days. Shares of the company have fallen 1.9% in the past year compared with the industry’s decline of 7.5%.

DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.

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