Boston Scientific CEO Michael Mahoney believes the company will make significant strides in the transcatheter aortic valve replacement (TAVR) market by 2020, thanks to its recent $435 million purchase of Symetis. The Swiss structural heart company makes the Accurate TA and Accurate neo/TF valve systems for patients suffering from severe and symptomatic aortic valve stenosis and those who have a high risk of undergoing open-heart surgery.
“We’re not in the surgery business,” Mahoney said at the annual Medtech Conference in Minneapolis. “We’re trying to disrupt the surgery business with our vascular franchise.”
The Marlborough, Massachusetts company has traditionally come in third in the TAVR marketplace behind Medtronic and Edwards Lifesciences, and was dealt a blow when its Lotus TAVR was pulled from the European marketplace in February due to device malfunctions.
Michael Mahoney, Boston Scientific CEO and Chairman
“We will exit the year with less than $50 million in (TAVR) sales,” Mahoney said. “ That’ll be $5 billion in 2020. That’s all open road for us.”
Boston Scientific was in trouble when Mahoney arrived six years ago to take the helm, with dispirited employees who had become accustomed to not winning, he said.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Since then, the business has shifted its focus in cardiac rhythm management to heart failure diagnostics, including its HeartLogic implantable defibrillator. HeartLogic measures respiratory rate, impedance, and heart sounds, producing a composite score that providers can use to predict heart failure.
Boston Scientific has also invested significantly in peripheral interventions, endoscopy and the neuromodulation business, Mahoney added. The company has been dedicating venture capital to the neuromodulation sector in stroke and Alzheimer’s disease.
“The biggest thing we’ve done is we’ve diversified the company over time more and more into faster growth markets,” Mahoney said. “We’ve really repositioned our portfolio into markets that I think are much more appealing.”
That diversification includes internal R&D as well as outside investments in M&A and venture capital.
“We’re not the biggest company, so we have to be category leaders,” Mahoney said. “So when hospitals are narrowing down their vendor list to two or three vendors, we need products like SICD (subcutaneous implantable defibrillator) and Watchman (the company’s FLX left atrial appendage closure device) and our Lotus program to be very unique and stand out.”
Investors are starting to focus more on the company’s medical-surgical businesses, which generate nearly one-third of the company’s revenue and 40 percent of is operating income. Boston Scientific is expanding into new markets such as pathology, infection control, and disposable scopes, and its Vercise deep-brain stimulator (DBS), which is doing well in Europe, Mahoney said. The company expects it will be approved in the U.S. this year, he added. Vercise landed the CE Mark in 2015. The company is also investing heavily in connected implantable devices, an area in which Mahoney acknowledged it is behind.
“We’re leveraging sensor data and big data to try to close the loop on stimulation platforms for DBS as well as pain,” he said. “All of our businesses are trying to up our capabilities in our digital health arena. I think as a capabilities company, we need improvement, but we’re getting better. But it’s clearly one of our biggest investment areas.”
Photo: Getty Images
