8-KOther EventsExhibits & Filings

BOSTON SCIENTIFIC CORP 8-K Report, Corporate Update (Mar 22, 2018)

Filed March 22, 2018For Securities:BSX

Summary

Boston Scientific Corporation (BSX) announced on March 21, 2018, the signing of a definitive agreement to acquire NxThera, Inc., a privately-held company specializing in medical technology. The acquisition includes an upfront cash payment of $306 million, with potential for an additional $100 million in commercial milestone payments over four years. Notably, Boston Scientific already holds a minority investment in NxThera, which will reduce the net upfront cash outflow to approximately $240 million and potential milestones to $85 million. This strategic move is anticipated to have a minor impact on Boston Scientific's adjusted earnings per share (EPS) through 2020, becoming accretive thereafter. The company acknowledges that the acquisition will be more dilutive on a GAAP basis due to amortization and transaction costs. The deal is expected to close in the second quarter of 2018, subject to standard closing conditions.

Key Highlights

  • 1Boston Scientific (BSX) to acquire privately-held NxThera, Inc.
  • 2Upfront cash payment of $306 million, with potential for $100 million in milestone payments.
  • 3Existing minority investment in NxThera reduces net upfront payment to ~$240 million and milestones to ~$85 million.
  • 4Acquisition expected to be immaterial to adjusted EPS through 2020, becoming accretive thereafter.
  • 5Transaction expected to be more dilutive on a GAAP basis due to amortization and transaction costs.
  • 6Deal is anticipated to close in the second quarter of 2018.
  • 7The press release includes cautionary statements regarding forward-looking statements and details on non-GAAP financial measures.

Frequently Asked Questions

The acquisition is expected to have an immaterial impact on Boston Scientific's adjusted earnings per share (EPS) through 2020. It is projected to become accretive to adjusted EPS after 2020. On a GAAP basis, the acquisition is expected to be more dilutive due to amortization expenses and transaction/integration costs.

The total potential cost includes an upfront cash payment of $306 million and up to $100 million in potential commercial milestone payments over the next four years. However, considering Boston Scientific's existing minority investment, the net upfront payment will be approximately $240 million, with potential milestone payments up to $85 million.

The transaction is expected to be completed in the second quarter of 2018, subject to customary closing conditions.

NxThera, Inc. is a privately-held company based in Maple Grove, Minnesota. While the filing does not detail NxThera's specific products or technology, the acquisition indicates Boston Scientific's strategic interest in expanding its portfolio through this acquisition, as detailed in the press release attached as an exhibit.