Financial and Operational Highlights: Acquisition of AMS Men's Health and Prostate Health - March 2, 2015
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Financial and
Operational Highlights:
Acquisition of AMS Men’s Health
and Prostate Health
March 2, 2015
Safe Harbor for Forward-looking Statements 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. 2 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015
AMS Men’s Health and Prostate Health
Transaction Overview
• BSX to acquire AMS Men’s Health and Prostate Health businesses
– Therapies for erectile dysfunction, male urinary incontinence, BPH
– Not acquiring AMS Women’s Health assets/liabilities
• AMS MH and PH 2014 sales ~$400M; 2014 adjusted Op. Inc. ~$130M
• $1.6B cash purchase price; transaction expected to close by end Q3:15
– ~4x Sales, ~12x adjusted Operating Income
– ROIC expected to exceed cost of capital by 2017
– Estimated synergies: $50M+ by year end 2018
• Estimated EPS impact:
− Adjusted: break-even in 2015; accretive by at least $0.03 in 2016 and ~$0.07 in 2017
− GAAP: TBD post close; expected to be less accretive or dilutive 2015-2017
• Committed financing in place; balance sheet remains strong
3 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015
Strengthens Urology Leadership
Attractive Market
• $4B market growing mid-single digits
• Large unmet patient needs, particularly internationally
Leadership Position
• Creates nearly $1B market leader Men’s & Prostate Health
• Leadership positions across 5 major segments
• Drives innovation for patients and our customers
• Largest commercial footprint in our served markets
Strong Financial Returns
• ROIC expected to exceed cost of capital by 2017
• Estimated EPS accretion: at least 3 cents in 2016 and ~7 cents in 2017*
• Estimated immediately accretive to BSC adjusted operating margins
• $50M+ in expected synergies by end of 2018
Strategically compelling for overall BSC
• Drives portfolio diversification
• Furthers goal of category leadership in each of our businesses
*On an adjusted EPS basis; the transaction is expected to be less accretive or more dilutive on a GAAP basis due to amortization expense and transaction and
integration costs.
4 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015
Expands Market Opportunity
Source: Boston Scientific and AMS estimates
5 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015
Deep Portfolio in Urology Devices
Erectile Male BPH Stone
Restoration Continence Treatment Management
2014 Revenue: $147M $127M $122M $401M
Segment Position: #1 #1 #1 #1
Patient Population: Severe or Incontinence BPH affects 10% of
complete ED affects 12M – 90M men over population
affects ~10% of men WW; 70-80% age 504 experience
men over age 40, cases secondary – 25M with kidney stones in
or over 120M to prostate moderate to lifetime; 50%
men WW1,2 cancer3-8 severe recur within 5-10
symptoms9-12 years13
AMS 800™
Artificial Urinary Sphincter
AMS 700™ Zero Tip™
Inflatable Penile AdVance™ GreenLight™ Nitinol Stone
Prosthesis Male Sling System Laser Therapy Retrieval Basket
Notes 1-13: Please see sources on Slide 11.
6 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015
Diversifies Revenue Mix; Strengthens MedSurg
Pro forma 2014 Revenue: $7.8B1
Neuromodulation
Interventional
Cardiology
Cardiovascular Rhythm
Management
Electrophysiology
Cardiac
Cardiac Rhythm Management Interventional Rhythm
Cardiology Management
$2.1 $1.9
Urology & Women’s Health
Peripheral $0.2
Interventions
Endoscopy $0.9
Endoscopy
Peripheral Intervention $0.5 $1.3
$0.4
$0.5 Electrophysiology
Neuromodulation
Urology &
AMS Women’s
Men’s Health
Health &
Prostate
Health MedSurg
1 includes pro forma 2014 AMS Men’s Health & Prostate Health
7 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015Advancing Science for Life™
Delivering on our goals; innovating & leading in large markets
• exceeding expectations and 2013 investor day goals
Executing a compelling strategic plan
• strong sales and margin expansion, differentiated EPS growth
Allocating capital effectively and consistently with strategy
• attractive markets; strong risk-adjusted returns; revenue and cost synergies
Leading globally
• fostering a “WINNING SPIRIT” and building category leaders
8 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015Use of Non-GAAP Measures
To supplement Boston Scientific’s consolidated financial statements presented on
a GAAP basis, the Company discloses certain non-GAAP financial measures.
These non-GAAP financial measures are not in accordance with generally
accepted accounting principles in the United States.
A reconciliation of the non-GAAP financial measures included in this document to
the corresponding GAAP measures follows in Appendix A. In addition, an
explanation of the ways in which Boston Scientific management uses these
supplemental non-GAAP measures to evaluate its business, and the substantive
reasons why Boston Scientific management believes that these non-GAAP
measures provide useful information to investors is included under “Use of Non-
GAAP Financial Measures” in the Company’s most recent earnings release filed
with the SEC on Form 8-K. This additional non-GAAP financial information is not
meant to be considered in isolation from or as a substitute for financial
information prepared in accordance with GAAP.
9 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015Non-GAAP Reconciliations 12 months ended December 31, 2014 (unaudited) AMS Men’s Health and Prostate Health Operating Income in millions 2014 Non-GAAP operating income $ 133 approximately $130 million Amortization $ 58 Certain allocated expenses $ 15 GAAP operating income $ 60 approximately $60 million BSC Urology and Women's Health Legacy in millions, except growth % 2014 Growth Urology and Women's Health net sales, constant currency $ 542 7% Foreign Currency Impact (7) -1% Urology and Women's Health net sales, GAAP $ 535 6% BSC Legacy Guidance in millions 2015 Low 2015 High Revenue Growth, Operational 3% 6% Foreign Currency Impact -4% -4% Revenue Growth, GAAP -1% 2% 10 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015
Sources: Slide 6
1) US Census Bureau.
2) Aytac IA et al. (1996) – The likely worldwide increase in erectile dysfunction between 1995 and 2025 and some
possible policy consequences. BJUI, 84: 50-6.
3) Irwin DE et al. (2011) – Worldwide prevalence estimates of lower urinary tract symptoms, overactive bladder, urinary
incontinence and bladder outlet obstruction. BJUI, 108: 1132-9.
4) Litwin MS et al. (1995) – Quality-of-life outcomes in men treated for localized prostate cancer. JAMA, 273(2): 129-35.
5) Penson DF et al. (2005) - 5-year urinary and sexual outcomes after radical prostatectomy: results from the prostate
cancer outcomes study. J Urol, 173(5): 1701-5.
6) Begg CB et al. (2002) - Variations in morbidity after radical prostatectomy. NEJM, 346(15): 1138-44.
7) Steineck G et al. (2002) - Quality of life after radical prostatectomy or watchful waiting. NEJM, 347(11): 790-6.
8) Data on file.
9) Barry M, Roehrborn C (1997). Management of benign prostatic hyperplasia. Annu Rev Med, 48: 177-189.
10) BioMed Strategies Report; 6/28/96.
11) Thomson Reuters Incidence and Prevalence Database.
12) US Census Bureau.
13) Moe, Orson W, Kidney Stones: Pathophysiology and Medical Management. Lancet 2006;
367: 333-44.
11 Boston Scientific – AMS Men’s Health and Prostate Health: Acquisition Highlights - March 2, 2015You can also read
