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.
Industry Prospects Favoring BSX
Per a research report, the global sacral nerve stimulation (SNS) market was valued at $1.6 billion in 2023 and is expected to witness a compound annual rate of 11.5% by 2030. The market growth is attributed to the increasing rates of overactive bladder conditions and the incidence of urge incontinence, including UTIs. Advancements in technology and increased awareness of SNS as an effective treatment option enhance its adoption.
Other Developments in Boston Scientific
This month, Boston Scientific announced that it has entered into a definitive agreement to acquire Cortex, Inc., an Ajax Health company. Cortex has developed the OptiMap System, which uses a basket catheter and proprietary algorithm to identify potential active AF (atrial fibrillation) sources, providing physicians with precise insights to efficiently deliver an individualized ablation strategy for their patients. The company expects to complete the transaction in the first half of 2025, subject to customary closing conditions.
BSX Stock Price Performance
In the past year, Boston Scientific shares have surged 66.1% compared with the industry’s growth of 21.4%.
BSX’s Zacks Rank and Key Picks
Boston Scientific currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Penumbra PEN, Haemonetics HAE and Globus Medical GMED, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Penumbra’s shares have risen 2.1% in the past year. Estimates for the company’s 2024 earnings per share have jumped 8.1% to $2.79 in the past 30 days. PEN’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 10.54%. In the last reported quarter, it posted an earnings surprise of 23.19%.
Estimates for Haemonetics’ fiscal 2025 earnings per share have jumped 0.4% to $4.59 in the past 30 days. Shares of the company have rallied 7.6% in the past year compared with the industry’s growth of 21.5%. HAE’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.82%. In the last reported quarter, it delivered an earnings surprise of 2.75%.
Estimates for Globus Medical’s 2024 earnings per share have increased 0.4% to $2.95 in the past 30 days. Shares of the company have surged 81.1% in the past year compared to the industry’s 23.4% growth. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.65%. In the last reported quarter, it delivered an earnings surprise of 27.69%.
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