Subsequent layoffs, first in Minnesota, then in Ireland, highlighted the impact of the decision to pull Lotus from the highly competitive market as a result of complexities related to the product delivery system and solely that — as the valve has achieved positive and clinically effective performance post-implant.
Speaking in a Q&A with analyst Vijay Kumar as part of the Evercore ISI 2020 HealthCONx Conference, Boston Scientific chairman & CEO Mike Mahoney explained the tough call the company had to make by taking Lotus off the market.
“We’re clearly disappointed by the news, but we make difficult choices in our portfolio to maximize shareholder value,” Mahoney said. “We wanted to be very objective about our current position with Lotus and more importantly what we saw as the future of the next two to three years.
“Essentially, the cost to invest to further advance the Lotus device and its delivery system, plus the timeline to do that and make it more of a workhorse valve, wasn’t feasible compared to other options we had.”
The company’s VP of investor relations, Susie Lisa, added that there was anxiety in approaching physicians with the Lotus news, “but while there was disappointment, there was also understanding.”
Mahoney said the company’s focus is now shifting to its Acurate neo2 transcatheter aortic valve implantation (TAVI) system, which is in the midst of a controlled launch in Europe, having received CE Mark approval in April.
Acurate neo2 has expanded indication for patients with aortic stenosis (with no specified age or risk level) who are considered appropriate candidates for the treatment by their heart team. The system restores function and normal blood flow through a severely narrowed aortic valve and includes new annular sealing technology for conforming to irregular, calcified anatomies.
The system’s annular sealing technology also minimizes paravalvular regurgitation or leaking (PVL) and offers access to smaller and more complex vessels at the entry site, allowing for accurate valve positioning while the top-down deployment mechanism further supports stable placement and release.
“We think Acurate neo2 is a different category of valve from Lotus and the customers who like Acurate are really enjoying [the next-generation] neo2,” Mahoney said. “One of the benefits [of retiring Lotus] will be that it will allow us to focus on this platform.”
Kumar questioned if the retiring of Lotus and the increased focus on Acurate neo2 could create cannibalization in the market, but Mahoney was assured that wasn’t the case.
“Both valves have different characteristics and are often used in different patients,” Mahoney said. “We don’t think the removal of Lotus will cannibalize Acurate neo2.”
Mahoney offered a positive outlook for the company’s Watchman FLX heart implant for left atrial appendage occlusion via ablation for non-valvular atrial fibrillation (Afib).
“Watchman FLX has exceeded all of our expectations with the growth and adoption of that platform,” Mahoney said. “We’ve seen quarter-over-quarter improvement in the Watchman business with very fast adoption since the launch.”
Boston Scientific’s chairman & CEO highlighted ease of use and enhanced safety profiles as reasons for quick adoption, with expansion evident in locations such as China and Japan. The company was impressed with the product’s growth despite the impact of the pandemic, too.
“We don’t see any change to the momentum that Watchman continues to generate,” Mahoney said.
While Boston Scientific, like most companies, is not going to provide 2021 guidance, with the impact of COVID-19 still looming large, Mahoney expressed optimism regarding the company’s future.
Mahoney noted that, within the culture of the company, the pandemic has changed very little in terms of focus on innovation and excitement over future progress.
“We’ve seen the business start to improve significantly, but still not at a normal basis given the impact of COVID,” Mahoney said. “It’s been a challenging year. As we look forward to 2021 and a post-COVID environment, our view as a company hasn’t changed. … We’re supported by a terrific portfolio and a strong balance sheet.”
The chairman & CEO added that the regulatory pathway has been strong during the pandemic and, despite it being something of a “lost year financially,” the company’s innovation cycle hasn’t slowed.
“We think the company post-COVID will be stronger than the company we had pre-COVID,” Mahoney said.