Boston Scientific Announces Agreement to Acquire Axonics, Inc.
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Insights
The acquisition of Axonics by Boston Scientific represents a strategic move to solidify its position in the urology market, particularly in the area of sacral neuromodulation (SNM) therapies. The transaction's financials suggest a significant investment, with a purchase price of $71 per share, equating to an equity value of approximately $3.7 billion. This price point must be scrutinized against Axonics' projected net revenue of $366 million for 2023, which indicates a substantial growth rate of 34% over the previous year.
From a financial perspective, the key metrics to observe include the transaction's impact on Boston Scientific's earnings. The acquisition is expected to be immaterial to adjusted earnings per share (EPS) in 2024 but accretive thereafter. This suggests that while the initial cost will not significantly affect profitability in the short term, it is expected to contribute positively in the long term. However, the GAAP EPS will likely be less favorable due to amortization expenses and acquisition-related net charges. Investors should weigh the potential for revenue growth and market expansion against these short-term financial impacts.
Sacral neuromodulation (SNM) is a growing field within medical devices, especially for treating conditions like overactive bladder and fecal incontinence. Boston Scientific's entry into this market through the acquisition of Axonics is a strategic initiative to capture a share of this high-growth adjacency. The relevance of SNM therapy is underscored by its minimally invasive nature and the demonstrated improvement in patients' quality of life, with no serious device-related adverse events reported in clinical studies.
It is important to consider the competitive landscape and the potential for market expansion. Axonics' FDA-approved fourth-generation Axonics R20 neurostimulator positions Boston Scientific favorably against competitors. The device's long battery life and rechargeable feature may offer a competitive edge. The acquisition's success will depend on effective integration and the ability to leverage Boston Scientific's existing distribution and marketing capabilities to maximize the reach of Axonics' technologies.
The prevalence of overactive bladder and fecal incontinence in the adult population represents a substantial market opportunity for Boston Scientific post-acquisition. With nearly 30 million adults in the United States affected by OAB and 19 million by fecal incontinence, the demand for effective treatments is significant. The economic implications for healthcare systems and insurance providers are considerable, given the impact of these conditions on quality of life and associated healthcare costs.
It is essential to analyze the potential cost-savings and improved patient outcomes associated with SNM therapies. By offering a minimally invasive alternative to more traditional treatments, SNM may reduce long-term healthcare costs and improve workforce productivity due to better management of symptoms. The acquisition's long-term success will be influenced by the degree to which these treatments are adopted by healthcare providers and covered by insurance plans, as well as the overall economic climate affecting healthcare spending.
Acquisition to expand urology portfolio with differentiated technologies to treat urinary and bowel dysfunction
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The Axonics product portfolio includes the Axonics R20TM and the Axonics F15TM Systems used to deliver sacral neuromodulation (SNM) therapy. SNM therapy is a minimally invasive procedure used in the treatment of OAB and fecal incontinence. It works by delivering mild electrical pulses to the sacral nerve to restore communication between the brain and the bladder. In clinical studies, Axonics Therapy has demonstrated meaningful improvement in patients' quality of life in follow-up out to two years, with no serious device-related adverse events reported.5,6
"We are excited to add Axonics technologies to the Boston Scientific portfolio, a combination that we expect will further strengthen our ability to serve urologists who are treating patients living with these often-chronic conditions," said Meghan Scanlon, senior vice president and president, Urology, Boston Scientific. "This acquisition also enables our entry into sacral neuromodulation, a high-growth adjacency with opportunities to expand access to care for patients."
In January 2023, Axonics received
Boston Scientific expects to complete the transaction in the first half of 2024, subject to customary closing conditions. Axonics expects to deliver net revenue of approximately
Additional information about this transaction is available on the Events and Presentations section of the Boston Scientific investor relations website.
About Boston Scientific
Boston Scientific transforms lives through innovative medical technologies that improve the health of patients around the world. As a global medical technology leader for more than 40 years, we advance science for life by providing a broad range of high-performance solutions that address unmet patient needs and reduce the cost of healthcare. Our portfolio of devices and therapies helps physicians diagnose and treat complex cardiovascular, respiratory, digestive, oncological, neurological and urological diseases and conditions. For more information, visit www.bostonscientific.com and connect on Twitter and LinkedIn.
Cautionary Statement Regarding Forward-Looking Statements
This press release 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 1934. 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. These forward-looking statements include, among other things, statements regarding the financial and business impact of the transaction and anticipated benefits of the transaction, the closing of the transaction and the timing thereof, business plans and strategy, product launches and product performance and impact. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future (together with other factors) could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this press release. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.
Factors that may cause such differences include, among other things: future economic, political, competitive, reimbursement and regulatory conditions; manufacturing, distribution and supply chain disruptions and cost increases; disruptions caused by cybersecurity events; disruptions caused by extreme weather or other climate change-related events; labor shortages and increases in labor costs; new product introductions; expected procedural volumes; demographic trends; the closing and integration of acquisitions, including our ability to achieve the anticipated benefits of the proposed transaction and successfully integrate Axonics' operations; business disruptions (including disruptions in relationships with employees, customers or suppliers) following the announcement and/or closing of the proposed transaction; intellectual property rights; litigation; financial market conditions; the execution and effect of our business strategy, including cost savings and growth initiatives; future business decisions made by us and our competitors; the conditions to the completion of the proposed transaction, including the receipt of the required regulatory approvals and clearances, may not be satisfied at all or in a timely manner; and the closing of the proposed transaction may not occur or may be delayed. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A – Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC"), which we may update in Part II, Item 1A – Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file hereafter. 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 those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this press release.
Preliminary Financial Information
This press release includes expected 2023 net revenue for Axonics, Inc., which is preliminary and unaudited. Axonics, Inc.'s financial closing procedures for full year 2023 are not yet complete and, as a result, actual net revenue for full year 2023 may change as a result of its financial closing procedures.
CONTACTS:
Kirsten Lesak-Greenberg
Media Relations
(763) 300-9254
kirsten.lesak-greenberg@bsci.com
Lauren Tengler
Investor Relations
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BSXInvestorRelations@bsci.com
1 | Equity value based on total fully diluted share count of approximately 51.7 million shares; Enterprise value is equal to Equity value minus net cash and short-term investments of approximately |
2 | Coyne, et al. "National community prevalence of overactive bladder in |
3 | Ditah, Ivo et al. "Prevalence, trends, and risk factors for fecal incontinence in |
4 | Reynolds, et al. "The Burden of Overactive Bladder on US Public Health." Curr Bladder Dysfunct Rep, Mar 2016. |
5 | Pezzella A, McCrery R, Lane F, Benson K, Taylor C, Padron O, Blok B, de Wachter S, Gruenenfelder J, Pakzad M, Perrouin-Verbe MA, van Kerrebroeck P, Mangel J, Peters K, Kennelly M, Shapiro A, Lee U, Comiter C, Mueller M, Goldman HB. Two-year outcomes of the ARTISAN-SNM study for the treatment of urinary urgency incontinence using the Axonics rechargeable sacral neuromodulation system. Neurourol Urodyn. 2021 Feb;40(2):714-721. doi: 10.1002/nau.24615. Epub 2021 Jan 28. PMID: 33508155; PMCID: PMC7986436. |
6 | Blok B, Van Kerrebroeck P, de Wachter S, et al. Two-year safety and efficacy outcomes for the treatment of overactive bladder using a long-lived rechargeable sacral neuromodulation system. Neurourology and Urodynamics. 2020; 39: 1108–1114. https://doi.org/10.1002/nau.24317. |
7 | Axonics, Inc. (2024). Axonics Reports Preliminary 4Q23 and Fiscal Year 2023 Revenue. https://ir.axonics.com/news-releases. |
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SOURCE Boston Scientific Corporation
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