Boston Scientific to Acquire Axonics, Inc.

Boston Scientific Corporation (NYSE: BSX) has announced its definitive agreement to acquire Axonics, Inc. (NASDAQ: AXNX), a medical technology company focused on developing and commercializing devices to treat urinary and bowel dysfunction. The acquisition is valued at approximately $3.7 billion, with Boston Scientific paying $71 in cash per share for Axonics.

The acquisition comes as an expansion of Boston Scientific's urology portfolio, with the aim of addressing the significant impact of overactive bladder (OAB) and fecal incontinence on individuals' quality of life, mental health, productivity, and social activities. Axonics' product portfolio includes the Axonics R20™ and the Axonics F15™ systems, which deliver sacral neuromodulation (SNM) therapy for the treatment of OAB and fecal incontinence. This therapy involves delivering mild electrical pulses to the sacral nerve to restore communication between the brain and the bladder.

Meghan Scanlon, Senior Vice President and President of Urology at Boston Scientific, expressed excitement about the addition of Axonics technologies to the company's portfolio, anticipating that it will strengthen their ability to serve urologists treating patients with these chronic conditions. Scanlon also highlighted the acquisition as enabling Boston Scientific's entry into sacral neuromodulation, a high-growth area with opportunities to expand access to care for patients.

Axonics received U.S. Food and Drug Administration (FDA) approval for its fourth-generation Axonics R20 neurostimulator in January 2023, further enhancing its product offerings. The company's portfolio also includes the Bulkamid® urethral bulking system for the treatment of female stress urinary incontinence.

Boston Scientific expects the transaction to be completed in the first half of 2024, subject to customary closing conditions. Axonics is projected to deliver net revenue of approximately $366 million in 2023, representing a 34% growth over the prior fiscal year. The company's revenue growth profile is anticipated to be highly accretive to Boston Scientific's urology business in 2024, with the impact on adjusted earnings per share expected to be immaterial in 2024 and accretive thereafter.

Overall, the acquisition of Axonics by Boston Scientific signifies the latter's strategic move to enhance its urology portfolio and address the unmet needs of patients with urinary and bowel dysfunction.

The company's full 8-K submission is available here.

2018 2019 2020 2021 2022 2023
Revenue (MM) $9,823 $10,735 $9,913 $11,888 $12,682 $13,757
Revenue Growth n/a 9.28% -7.66% 19.92% 6.68% 8.48%
Operating Margins 15% 14% -1% 10% 13% 16%
Net Margins 17% 44% -1% 9% 6% 9%
Net Income (MM) $1,671 $4,700 -$82 $1,041 $698 $1,228
Net Interest Expense (MM) $241 $473 $361 $341 $470 $265
Depreciation & Amort. (MM) $894 $1,011 $1,123 $1,093 $1,136 $1,177
Earnings Per Share $1.19 $3.33 -$0.08 $0.69 $0.45 $0.82
EPS Growth n/a 179.83% -102.4% 962.5% -34.78% 82.22%
Diluted Shares (MM) 1,401 1,411 1,417 1,434 1,440 1,475
Free Cash Flow (MM) -$6 $1,375 $1,132 $1,316 $938 $1,697
Capital Expenditures (MM) $316 $461 $376 $554 $588 $656
Current Ratio 0.76 0.97 1.82 1.48 1.51 1.42
Total Debt (MM) $7,056 $10,008 $9,143 $9,065 $8,935 $8,899
Net Debt / EBITDA 2.88 3.87 7.1 3.12 2.88 2.38

Boston Scientific has weak operating margins with a stable trend, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company benefits from growing revenues and increasing reinvestment in the business and irregular cash flows.

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