Boston Scientific Stock Set to Gain From Completion of Axonics Deal

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Boston Scientific Corporation BSX recently closed the acquisition of Axonics, Inc., a medical technology company focused on the development and commercialization of differentiated devices to treat urinary and bowel dysfunction. The deal, originally announced in January this year, enables Boston Scientific’s entry into sacral neuromodulation (SNM), a high-growth adjacency for its Urology business.

The company paid $71 cash per share to Axonics, representing an equity value of $3.7 billion and an enterprise value of $3.3 billion. The transaction is expected to be immaterial to adjusted earnings per share in 2024 and 2025 and accretive thereafter. However, on a GAAP basis, Boston Scientific anticipates the transaction to be less accretive or more dilutive due to amortization expenses and acquisition-related charges.

Predicting BSX Stock Movement Following the News

After the Nov. 15 announcement, shares of BSX jumped 3.3%, finishing at $90.45 in yesterday’s session.  Boston Scientific is consistently gaining market share within its MedSurg segment. Within Urology, the Stone Management and Prostate Health franchises are growing well owing to the strong performances of Rezum and SpaceOAR. The Endoscopy business is also gaining from strong worldwide demand for its broad range of gastrointestinal and pulmonary treatment options. We expect the market sentiment toward BSX stock to remain positive surrounding this development.

Boston Scientific currently has a market capitalization of $128.21 billion. The company has an estimated 2024 earnings growth of 20% compared to the industry’s 11.4% growth. It delivered an earnings beat of 8.29%, on average, in the trailing four quarters.

Significance of Boston Scientific’s Latest Buyout

Irvine, CA-headquartered Axonics’ products are available in more than 20 countries. The portfolio includes SNM therapy for overactive bladder (OAB) and incontinence, which is a minimally invasive procedure that works by delivering mild electrical pulses to the sacral nerve to restore communication between the brain and the bladder. The company launched its first rechargeable SNM device for OAB in November 2019 and treated nearly 100,000 incontinence patients globally in 2023. Axonics reported net revenues of approximately $366 million last year, growing 34% over 2022 with attractive gross margins.

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The latest acquisition is strategic and financially compelling for Boston Scientific, expanding its ability to offer clinically differentiated treatment options with well-established therapies in a high-growth adjacency. In the United States, the market for SNM is large and significantly underpenetrated, presenting a major opportunity for Boston Scientific to leverage its global reach and capabilities to accelerate the awareness and adoption of Axonics technologies.

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