04.08.14
Boston Scientific Corp. reported that sales of its medical devices and supplies fell 1 percent to $7.14 billion last year due to declining revenue in its cardiovascular and cardiac rhythm management units.
The Natick, Mass.-based manufacturer reported a net loss of $121 million in 2013. The net loss for 2012 was $4.06 billion. Net income was $108 million in the fourth quarter of 2013 (ended Dec. 31), up from $60 million in the same quarter of 2012.
Boston Scientific saw sales improve in the fourth quarter of 2013, with revenues rising 1 percent to about $1.83 billion, compared with $1.82 billion in the same quarter last year. The company expects revenues to grow between 2 percent and 5 percent in 2014.
Both the neuromodulation and medical surgical divisions reported stronger growth in the fourth quarter, and sales of rhythm management devices rose 5 percent to $518 million. However, cardiovascular revenues declined by 4 percent to $705 million, compared with $733 million in the same quarter in 2012.
Sales of cardiovascular devices, the company’s largest business segment, fell 6 percent to $2.79 billion in 2013, compared with $2.95 billion in 2012, while revenues for cardiac rhythm management products slipped 1 percent to $2.04 billion in 2013, compared with $2.05 billion in 2012.
“I am pleased with our results for the quarter and our return to operational revenue growth for the full year 2013,” President/CEO Mike Mahoney said. “This marks our third consecutive quarter of accelerated operational revenue growth and we look forward to continued improvement of our annual sales and earnings performance in 2014.”
Domestic sales of pacemakers, drug-eluting stents, and defibrillator systems declined in 2013.
A number of shifts in the U.S. market in recent years have affected sales of these kinds of devices. Hospitals are increasingly seeking to reduce the costs of such products as part of broader cost-cutting strategies; some patients have put off procedures because of economic reasons; and studies have questioned the utilization of some procedures.
When asked about pricing during a call with analysts, Mahoney said that nothing changed significantly in 2013.
“We believe that we’ll be able to hopefully improve the pricing impact that we’ve observed over the past few years,” he said.
The company has several new products in the market or expected to be approved for sale in the U.S. Its S-ICD system was approved in 2012, and Boston Scientific continues to train and educate physicians about the device. It has not released the number of physicians who have been trained or the number of designated S-ICD centers, but some hospitals such as Henry Ford Hospital in Detroit, Mich., the Florida Hospital Pepin Heart Institute in Tampa Bay, Fla., and North Shore University Hospital in Manhasset, N.Y., have promoted recent S-ICD implantations at their facilities.
“Now it’s really a matter of getting physicians through the training, both in terms of how to select patients and how to screen patients, as well as the implant technique,” Kenneth Stein, M.D., Boston Scientific’s senior vice president and chief medical officer for cardiac rhythm management, said during the call.
Reimbursement is another challenge. The company said it is prepared for another cycle of talks with insurers about reimbursing its Alair Bronchial Thermoplasty System, which was approved by the U.S. Food and Drug Administration in 2010 to manage severe asthma in some adult patients. Regional health plans such as HealthPartners in Minnesota and Priority Health in Michigan have said they will reimburse patients who undergo the procedure, but Mahoney noted until a large insurer begins to cover the system, it won’t generate major sales.
“We continue to expect strong growth, although it won’t be breakthrough growth until we can knock down one of these payers,” Stein added.
The Natick, Mass.-based manufacturer reported a net loss of $121 million in 2013. The net loss for 2012 was $4.06 billion. Net income was $108 million in the fourth quarter of 2013 (ended Dec. 31), up from $60 million in the same quarter of 2012.
Boston Scientific saw sales improve in the fourth quarter of 2013, with revenues rising 1 percent to about $1.83 billion, compared with $1.82 billion in the same quarter last year. The company expects revenues to grow between 2 percent and 5 percent in 2014.
Both the neuromodulation and medical surgical divisions reported stronger growth in the fourth quarter, and sales of rhythm management devices rose 5 percent to $518 million. However, cardiovascular revenues declined by 4 percent to $705 million, compared with $733 million in the same quarter in 2012.
Sales of cardiovascular devices, the company’s largest business segment, fell 6 percent to $2.79 billion in 2013, compared with $2.95 billion in 2012, while revenues for cardiac rhythm management products slipped 1 percent to $2.04 billion in 2013, compared with $2.05 billion in 2012.
“I am pleased with our results for the quarter and our return to operational revenue growth for the full year 2013,” President/CEO Mike Mahoney said. “This marks our third consecutive quarter of accelerated operational revenue growth and we look forward to continued improvement of our annual sales and earnings performance in 2014.”
Domestic sales of pacemakers, drug-eluting stents, and defibrillator systems declined in 2013.
A number of shifts in the U.S. market in recent years have affected sales of these kinds of devices. Hospitals are increasingly seeking to reduce the costs of such products as part of broader cost-cutting strategies; some patients have put off procedures because of economic reasons; and studies have questioned the utilization of some procedures.
When asked about pricing during a call with analysts, Mahoney said that nothing changed significantly in 2013.
“We believe that we’ll be able to hopefully improve the pricing impact that we’ve observed over the past few years,” he said.
The company has several new products in the market or expected to be approved for sale in the U.S. Its S-ICD system was approved in 2012, and Boston Scientific continues to train and educate physicians about the device. It has not released the number of physicians who have been trained or the number of designated S-ICD centers, but some hospitals such as Henry Ford Hospital in Detroit, Mich., the Florida Hospital Pepin Heart Institute in Tampa Bay, Fla., and North Shore University Hospital in Manhasset, N.Y., have promoted recent S-ICD implantations at their facilities.
“Now it’s really a matter of getting physicians through the training, both in terms of how to select patients and how to screen patients, as well as the implant technique,” Kenneth Stein, M.D., Boston Scientific’s senior vice president and chief medical officer for cardiac rhythm management, said during the call.
Reimbursement is another challenge. The company said it is prepared for another cycle of talks with insurers about reimbursing its Alair Bronchial Thermoplasty System, which was approved by the U.S. Food and Drug Administration in 2010 to manage severe asthma in some adult patients. Regional health plans such as HealthPartners in Minnesota and Priority Health in Michigan have said they will reimburse patients who undergo the procedure, but Mahoney noted until a large insurer begins to cover the system, it won’t generate major sales.
“We continue to expect strong growth, although it won’t be breakthrough growth until we can knock down one of these payers,” Stein added.