Medtech earnings season continues this week with Boston Scientific, Dexcom and Edwards Lifesciences the next three big companies to report results.
Johnson & Johnson, Abbott and Intuitive Surgical got earnings season underway last week, giving an early glimpse at how the medical device industry has started the year. J.P. Morgan analysts said in a note to investors that the three companies reported “generally good results with healthy underlying volumes” in the U.S. and overseas.
The analysts added that this week’s results should be “very good, forecasts should move higher, and the new product launch dreams remain very much alive.”
1. Boston Scientific
Boston Scientific will provide the first test of the analysts’ confidence when it reports first-quarter results Wednesday. All eyes are on Farapulse, the pulsed field ablation device Boston Scientific launched in the first quarter. The PFA market has recently gained a lot of momentum, as both Boston Scientific and Medtronic received approval from the Food and Drug Administration for their systems, and J&J is working to get its device to the U.S. market.
Farapulse only won approval part way through the first quarter, but analysts are looking to the results for early signs of how the PFA market is growing and Boston Scientific is competing against Medtronic.
RBC Capital Markets analysts said in a note to investors that their checks “continue to be notably positive on PFA adoption and shift from [radiofrequency/cryoablation], the pace of ramp, [Boston Scientific’s] share and pull through to the rest of the portfolio.”
J.P. Morgan analysts said they “think there are very strong Farapulse adoption trends” and the device’s momentum lays the foundation for a good first quarter for Boston Scientific. Yet, the analysts also said “the rest of the business will still have to deliver, particularly Watchman.”
The team expects sales of Watchman, another atrial fibrillation device, to grow around 20%.
2. Dexcom
Dexcom reports results Thursday. Abbott, Dexcon’s main competitor, grew sales of its Freestyle Libre continuous glucose monitor (CGM) by more than 20% in the first quarter to $1.5 billion.
Dexcom’s results will show the success of its efforts to grow CGM sales, which include a push to increase use by people with Type 2 diabetes.
J.P. Morgan analysts said a 26% increase in global sales could be possible because of “consistently strong U.S. momentum and healthy pharmacy script volumes to start the year.” The analysts said strong sales of Dexcom’s latest G7 device and penetration of the Type 2 basal insulin market could support growth.
The results also give Dexcom a chance to look forward to the launch of the first over-the-counter CGM, Stelo. Dexcom received clearance to sell the CGM to adults who don’t take insulin in March.
J.P. Morgan analysts are looking for more details ahead of the summer launch of Stelo, which they said is a “massive opportunity ... that can potentially move 2025 numbers a lot higher.”
3. Edwards Lifesciences
Meanwhile, Edwards will report its earnings results on Thursday after the market closes. RBC analysts said transcatheter aortic valve replacement (TAVR) end-markets are “largely stable,” adding that “the gradual improvement in diagnosis is worth noting.”
The analysts' market checks suggest Edwards’ 8% to 10% full-year growth target is achievable, and their peers at J.P. Morgan expect TAVR volumes to exceed expectations in the first quarter.
RBC analysts are looking for commentary on TAVR procedure volumes and the potential impact of Medtronic’s Smart trial results. The analysts' market checks suggest the results of the head-to-head TAVR trial may put Edwards “on the defensive,” although the company has pushed back against the idea that the results will drive a shift in market share.
