Boston Scientific’s (NYSE:BSX) top executives told analysts that the company’s cardiac rhythm management sales ticked up in September and early October, indicating that a prolonged CRM slump might have bottomed out.
But the jury’s still out until CRM market leader Medtronic (NYSE:MDT) reports its second-quarter results, the BSX executives said.
During a conference call with analysts to discuss Boston Scientific’s Q3 numbers, CFO Jeffrey Capello said the CRM slump worsened in July and August before showing signs of recovery.
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“Compared to Q2, the U.S. defib market appears to have weakened further in July and August as the summer vacation months proved to be particularly slow,” Capello said. “And from the best we can tell at this point, the combination of the vacation period, coupled with the change in employment incentives relative to the physicians, we believe had an impact on volumes.
“But as you look at September, particularly the end of September, the volumes increased. And as we look at our results for the first 10, 12 days in October, they stepped up again, which gives us some confidence that things are starting to come back a little,” he said. “But it’s too early to tell, and we need to see what Medtronic reports. We saw what St. Jude said yesterday. So we need to kind of see where that goes.”
Asked about a recent article in the Journal of the American Medical Assn. showing reduced hospitalizations for heart failure, chief medical officer Dr. Ken Stein said the reduction is likely due to a variety of factors, including earlier intervention to place CRM devices.
“First of all, I think everyone has to recognize that that’s a testament to the great success of the med-tech endeavor over the past decade in the U.S. and Europe particularly. Successes both on treatment of acute coronary syndromes, drug-eluting stents, et cetera, as well as frankly, the effect of technologies like CRT on reducing heart failure hospitalizations,” Stein said. “I think it’s probably too early to make any conclusion that that reduction in hospitalizations is at all linked to a reduction in volume of procedures. And in fact, the proof that we’ve got, for instance, some trials I’ve made at CRT, that early intervention with CRT in patients with heart failure before they reach the stage of needing a hospitalization improves outcomes and reduces hospitalizations.”
And Boston Scientific might have an edge when it comes to the longevity of its CRM devices, Capello said.
“I think people know that we have more of a headwind replacement-wise than the competition does, and that’s driven by some of the historical recall activity plus battery longevity. We feel we’ve got an advantage from a longevity standpoint,” Capello said. “The demographics and the patient pool will be there. We’re confident of that. We just have to get through the next couple of quarters and see where we bottom out here.”
