JP Morgan Healthcare Conference January 8, 2013

Transcription

1 JP Morgan Healthcare Conference January 8, Mike Mahoney Chief Executive Officer 1 Boston JP Morgan Healthcare Conference, January 8, 2012 Boston JP Morgan Healthcare Conference, January 8,

2 Safe Harbor For Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of Forward-looking statements may be identified by words like anticipate, expect, project, believe, plan, estimate, intend and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could differ materially from the expectations and projections expressed or implied by our forward-looking statements. Factors that may cause such differences can be found in our most recent Form 10-K and Forms 10-Q filed or to be filed with the Securities and Exchange Commission under the headings Risk Factors and Safe Harbor for Forward-Looking Statements. Accordingly, you are cautioned not to place undue reliance on any of our forwardlooking statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which they may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. 2

3 Disclaimers This presentation includes products that have not been approved or cleared by the U.S. Food and Drug Administration and are not available for sale in the U.S. All future product approval and launch dates are based on estimates of completion of regulatory submissions, review and/or approval or clearance, as well as other business considerations. For reconciliations of non-gaap financial measures used in these presentations to the most directly comparable GAAP figures, please refer to the Investor Relations section of our website at 3

4 Boston Scientific Brand Mission: Boston Scientific is dedicated to transforming lives through innovative medical solutions that improve the health of patients around the world. Values: Caring Meaningful Innovation High Performance Global Collaboration Diversity Winning Spirit 4

5 Market Changes Headwinds Significantly stronger economic buyer, increased pricing pressure Tailwinds Demographics (e.g. aging population, comorbidities) Medical device tax Emerging markets growth Economic conditions in EMEA Local competitors in emerging markets New treatments for: Hypertension, Trans Aortic Valve, Left Atrial Appendage and Asthma Convergence of device and informatics; increasing patient awareness Increasing scale of Accountable Care Organization model Increasing scale of Accountable Care Organization model are Driving both New Challenges and Global Opportunities 5

6 Business Results through 3Q 2012 Successes Challenges A $7B+ global leader in our $30B+ served market Challenging end markets: IC and CRM Many businesses growing above market Share loss in IC and Rhythm Management Gross margin improvement - execution of cost initiatives Small footprint in emerging markets Expansion into adjacent markets Too much executive turnover Strong adjusted free cash flow (1) Heavy corporate infrastructure (1) Adjusted Free Cash Flow excludes any potential amounts related to acquisition-, divestiture- and litigation-related items, significant tax audit settlements and restructuring and restructuring-related items. For reconciliations of our non-gaap financial measures, please refer to the Investor Relations section of our website at require Improved Global Execution and Leadership 6 Source: BSC FP&A

7 Operational Changes being made... Creating a Global Operating Model New Asia Pacific Leadership and Emerging Markets Infrastructure Strengthening Sales Model in the US and EMEA Stronger Corporate Sales Organization R&D Alignment to Improve Productivity Leaner Organization to Improve Speed to Drive Growth and Improve Global Execution 7

8 Established New Strategic Imperatives STRENGTHEN Execution to Grow Share EXPAND into High Growth Adjacencies DRIVE Global Expansion FUND the Journey to Fuel Growth DEVELOP Key Capabilities to Guide the Company to a Bright Future 8

9 Strengthen Execution to Grow Share CRM: ICD and CRT-D ENERGEN TM WW Est. ICD Market: ~$7B INCEPTA NEW Reliance 4-Front LEAD Industry-leading battery longevity Highest performing lead reliability Low profile - size and shape advantage Programmable to reduce inappropriate shocks Tiered offering 4-FRONT FDA & CE Mark approved Full EU and US launch in H Reliance 4-Front CE Mark approved through Differentiated New ICD and CRT-D platforms 9 Source: BSC Estimates

10 Strengthen Execution to Grow Share CRM: S-ICD Potential WW S-ICD Market: +$750M Innovative alternative for patients at risk of Sudden Cardiac Arrest No leads required in the heart units implanted globally MADIT-RIT trial supports S-ICD Expect to capture de novo and replacement share FDA & CE Mark approved Enhancing supply chain capabilities with the World s Only Commercially Available S-ICD 10 Source: BSC Estimates

11 Strengthen Execution to Grow Share CRM: Ingenio Pacemaker WW Est. Pacemaker Market: +$4B RF Telemetry to simplify implant LATITUDE Remote Patient Management Minute Ventilation algorithm 6Fr INGEVITY family of leads Engineered to be MRI Conditional Full launch in US & EU during 2012 MRI Conditional launched in EU H US IDE for MRI Conditional expected in with an Innovative Pacemaker Platform 11 Source: BSC Estimates

12 Expand into High Growth Adjacencies EP / IC: Left Atrial Appendage Potential WW LAAC Market: +$500M Alternative Afib treatment to prevent stroke Strong clinical evidence PROTECT-AF demonstrated 38% relative risk reduction vs long-term warfarin therapy Launched in 20+ countries CE Mark approved FDA approval expected in Q4 NEJM 2009;360: Innovative Left Atrial Appendage Closure Platform 12 Source: BSC Estimates by 2020

13 Expand into High Growth Adjacencies EP: Rhythmia Mapping and Navigation WW Est. EP Market: +$2.5 Billion Multiple electrode mapping (64-pole) More detailed sensitivity Designed for faster diagnostics Open architecture for catheter selection CE Mark expected 1H FDA approval expected in 2H Full launch expected in 2014 with Rhythmia Next Generation Mapping & Navigation 13 Source: BSC Estimates

14 Strengthen Execution to Grow Share IC: Synergy Next Generation DES WW Est. DES Market: +$4 Billion Ultra-thin 90 day bio-absorbable polymer Enhanced platinum chromium platform Strong EVOLVE clinical data Designed to reduce late stent thrombosis Potential to reduce DAPT dependence CE Mark approved - Limited EU launch Full EU launch expected in 2014 EVOLVE II (US IDE Trial) Q through Synergy Next-Generation Drug Eluting Stent Technology 14 Source: BSC Estimates

15 Expand into High Growth Adjacencies IC: Lotus TAVR Potential WW TAVR market: $3B Pre-loaded device 23mm & 27mm diameters Repositionable and fully retrievable Adaptive seal to minimize paravalvular aortic regurgitation REPRISE I completed; 3 month data reported at TCT REPRISE II (CE Mark trial) began in Oct. 2012; currently in enrollment CE Mark expected in H2 with Lotus 2 nd Generation Transcatheter Aortic Valve 15 Source: BSC Estimates by 2020

16 Expand into High Growth Adjacencies PI: Vessix Hypertension Potential WW Hypertension Market: ~$2.5B Simple Design Over-the-wire balloon with 8 RF electrodes Short Treatment Time Only one placement required per artery Electrodes fire simultaneously in 30 sec. Smart Technology Confirmation of electrode apposition CE Mark approved EU launch expected in H2 US IDE trial expected to begin late /early 2014 with a 2 nd Generation Renal Denervation Platform 16 Source: BSC Estimates by 2020

17 Expand into High Growth Adjacencies Endo: Alair Bronchial Thermoplasty ENDO Potential WW BT Market: >$500M RF treatment for patients with severe asthma Published excellent 5-year safety data (RISA) 84% reduction in ER visits 32% reduction in asthma attacks Reduce use of oral steroids FDA and CE Mark approved Launched in 18 countries and >200 sites Cat. I CPT (1) codes effective (1) CPT Copyright 2011 American Medical Association. All rights reserved. with Alair an Innovative Treatment for Severe Asthma Patients 17 Source: BSC Estimates by 2020

18 Strengthen Execution to Grow Share Neuromodulation: Spinal Cord Stimulation NEXT GENERATION Precision SPECTRA TM Precision SPECTRA TM WW Est. SCS Market : ~$1.4B First 32-contact lead system Multiple lead configurations Independent current control Designed for maximum coverage and flexibility Designed to deliver therapy more accurately CE Mark approved FDA approval expected in with Precision SPECTRA a Next Generation SCS Device 18 Source: BSC Estimates

19 Drive Global Expansion BRIC Market Revenue ($B) for BSC Served Markets Est. $2.4B 15% Est. $4.8B Russia India Brazil China BSC BRIC growing +30% in Q Represents 4% of BSC revenues New leadership team Strengthening commercial presence Building new capabilities by Investing and Delivering Strong Growth in Emerging Markets 19 Source: BSC Estimates as of Q3 2012

20 Fund the Journey to Fuel Growth Gross Margin Expansion in 2012 Transitioned to Self Manufactured Stents Manufacturing Value Improvement Programs (VIPs) Continued Focus on Productivity Initiatives Delivering on Restructuring Programs R&D Productivity Corporate Function and SG&A Initiatives More Opportunity to Improve Productivity by Executing on our Continuous Improvement Actions 20

21 Fund the Journey to Fuel Growth $8.9 Total Debt $6.0 $4.3 Q Q Q Accomplishments: Prepaid $4.6B of total debt Achieved target debt level of ~$4B Regained investment grade status Repurchased ~11% of shares through Q Improved growth profile assisted by acquisitions (in Billions) with a Balanced Capital Allocation Strategy 21

22 Fund the Journey to Fuel Growth $7.2B+ $6.8B+ Expected Future Capacity for: Acquisitions Growth Adjacencies Near-Term Revenue Contribution Stock repurchases $0.4B Risk contingencies Legal & Tax Q Cash on Hand Adjusted Free Cash Flow (1) Estimate through 2017 (1) Adjusted Free Cash Flow excludes any potential amounts related to acquisition-, divestiture- and litigation-related items, significant tax audit settlements and restructuring and restructuring-related items. For reconciliations of our non-gaap financial measures, please refer to the Investor Relations section of our website at with Projected Future Cash Generation 22 Source: BSC Estimates

23 Established New Strategic Imperatives STRENGTHEN Execution to Grow Share EXPAND into High Growth Adjacencies DRIVE Global Expansion FUND the Journey to Fuel Growth DEVELOP Key Capabilities to Guide the Company to a Bright Future 23

24 24 Boston JP Morgan Healthcare Conference, January 8, 2012 Boston JP Morgan Healthcare Conference, January 8,