JP Morgan Healthcare Conference January 8, 2013/media/... · 3 Boston Scientific @ JP Morgan...

1 Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2012Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2013

JP Morgan Healthcare ConferenceJanuary 8, 2013

Mike MahoneyChief Executive Officer

™

2 Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2012Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2013Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2013Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2013

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 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. 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 forward-looking 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.

Safe Harbor For Forward-Looking Statements


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 www.bostonscientific.com.

4 Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2012Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2013Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2013

Boston Scientific Brand

Boston Scientific is dedicated to transforming lives through innovative medical solutions that improve the health of patients around the world.

• Caring

• Meaningful Innovation

• High Performance

• Global Collaboration

• Diversity

• Winning Spirit

Mission:

Values:

™


Tailwinds

Demographics(e.g. aging population, comorbidities)

Emerging markets growth

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

Headwinds

Significantly stronger economic buyer, increased pricing pressure

Medical device tax

Economic conditions in EMEA

Local competitors in emerging markets

Increasing scale of Accountable Care Organization model

Market Changes …

… are Driving both New Challenges and Global Opportunities


Business Results through 3Q 2012 …

… require Improved Global Execution and Leadership

Challenges

Challenging end markets: IC and CRM

Share loss in IC and Rhythm Management

Small footprint in emerging markets

Too much executive turnover

Heavy corporate infrastructure

Successes

A $7B+ global leader in our $30B+ served market

Many businesses growing above market

Gross margin improvement - execution of cost initiatives

Expansion into adjacent markets

Strong adjusted free cash flow(1)

Source: BSC FP&A

(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 www.bostonscientific.com.


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

Operational Changes being made ...

… to Drive Growth and Improve Global Execution


Established New Strategic Imperatives …

STRENGTHEN Execution to Grow Share

EXPAND into High Growth

Adjacencies

DRIVE Global

Expansion

FUNDthe Journey

to Fuel Growth

DEVELOPKey Capabilities

… to Guide the Company to a Bright Future

™


Strengthen Execution to Grow Share…CRM: ICD and CRT-D

Industry-leading battery longevity

Highest performing lead reliability

Low profile - size and shape advantage

Programmable to reduce inappropriate shocks

Tiered offering

WW Est. ICD Market: ~$7B

FDA & CE Mark approved

Full EU and US launch in H2 2012

Reliance 4-Front™ CE Mark approved

Source: BSC Estimates

…through Differentiated New ICD and CRT-D platforms

NEW Reliance 4-Front™ LEAD

ENERGENTM

INCEPTA®

4-FRONT


Innovative alternative for patients at risk of Sudden Cardiac Arrest

No leads required in the heart

+1400 units implanted globally

MADIT-RIT trial supports S-ICD

Expect to capture de novo and replacement share

Potential WW S-ICD Market: +$750M

FDA & CE Mark approved

Enhancing supply chain capabilities

…with the World’s Only Commercially Available S-ICDSource: BSC Estimates

Strengthen Execution to Grow Share…CRM: S-ICD®


RF Telemetry to simplify implant

LATITUDE® Remote Patient Management

Minute Ventilation algorithm

6Fr INGEVITY™ family of leads

Engineered to be ‘MRI Conditional’

WW Est. Pacemaker Market: +$4B

Full launch in US & EU during 2012

MRI Conditional launched in EU H2 2012

US IDE for MRI Conditional expected in 2013


…with an Innovative Pacemaker Platform

Strengthen Execution to Grow Share…CRM: Ingenio® Pacemaker


NEJM 2009;360:2601-2602

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

Potential WW LAAC Market: +$500M

CE Mark approved

FDA approval expected in Q4 2013

…Innovative Left Atrial Appendage Closure PlatformSource: BSC Estimates by 2020

Expand into High Growth Adjacencies…EP / IC: Left Atrial Appendage


Multiple electrode mapping (64-pole)

More detailed sensitivity

Designed for faster diagnostics

Open architecture for catheter selection

WW Est. EP Market: +$2.5 Billion

CE Mark expected 1H 2013 FDA approval expected in 2H 2013 Full launch expected in 2014

…with Rhythmia™ Next Generation Mapping & NavigationSource: BSC Estimates

Expand into High Growth Adjacencies…EP: Rhythmia™ Mapping and Navigation


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) Q4 2012

WW Est. DES Market: +$4 Billion

…through Synergy Next-Generation Drug Eluting Stent TechnologySource: BSC Estimates

Strengthen Execution to Grow Share…IC: Synergy™ Next Generation DES


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 2013

Potential WW TAVR market: $3B

…with Lotus™ 2nd Generation Transcatheter Aortic ValveSource: BSC Estimates by 2020

Expand into High Growth Adjacencies…IC: Lotus™ TAVR


• CE Mark approved• EU launch expected in H2 2013• US IDE trial expected to begin late

2013/early 2014

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

Potential WW Hypertension Market: ~$2.5B

…with a 2nd Generation Renal Denervation PlatformSource: BSC Estimates by 2020

Expand into High Growth Adjacencies…PI: Vessix™ Hypertension


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

Potential WW BT Market: >$500M

FDA and CE Mark approved

Launched in 18 countries and >200 sites

Cat. I CPT®(1) codes effective 2013

(1) CPT Copyright 2011 American Medical Association. All rights reserved.

…with Alair® an Innovative Treatment for Severe Asthma PatientsSource: BSC Estimates by 2020

ENDOExpand into High Growth Adjacencies…Endo: Alair® Bronchial Thermoplasty


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 2013

…with Precision SPECTRA™ a Next Generation SCS Device

WW Est. SCS Market : ~$1.4B


Precision SPECTRATM

Strengthen Execution to Grow Share…Neuromodulation: Spinal Cord Stimulation

NEXT GENERATION Precision SPECTRATM


0

2

4

6

China

BrazilIndiaRussia

2017

Est. $4.8B

2012

Est. $2.4B

BRIC Market Revenue ($B) for BSC Served Markets

BSC BRIC growing +30% in Q3 2012

Represents 4% of BSC revenues

New leadership team

Strengthening commercial presence

Building new capabilities

… by Investing and Delivering Strong Growth in Emerging Markets

15%

Source: BSC Estimates as of Q3 2012

Drive Global Expansion…


…by Executing on our Continuous Improvement Actions

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

Fund the Journey to Fuel Growth…


…with a Balanced Capital Allocation Strategy

Accomplishments:

Prepaid $4.6B of total debt

Achieved target debt level of ~$4B

Regained investment grade status

Repurchased ~11% of shares through Q3 2012

Improved growth profile assisted by acquisitions

$8.9

$6.0

$4.3

Q2 2006 Q3 2009 Q3 2012

Total Debt


(in Billions)


…with Projected Future Cash Generation

(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 www.bostonscientific.com.

Estimatethrough

2017

Adjusted Free Cash

Flow (1)

$6.8B+

Q3 2012 Cash on

Hand

$0.4B

$7.2B+



Expected Future Capacity for: Acquisitions Growth Adjacencies Near-Term Revenue

Contribution

Stock repurchases

Risk contingencies Legal & Tax


Established New Strategic Imperatives…

STRENGTHEN Execution to Grow Share

EXPAND into High Growth

Adjacencies

DRIVE Global

Expansion

FUNDthe Journey

to Fuel Growth

DEVELOPKey Capabilities

… to Guide the Company to a Bright Future

™

24 Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2012Boston Scientific @ JP Morgan Healthcare Conference, January 8, 2013

™

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