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BOSTON SCIENTIFIC CORP 8-K Report, Corporate Update (Sep 11, 2018)

Filed September 11, 2018For Securities:BSX

Summary

Boston Scientific Corporation (BSX) announced on September 6, 2018, that it has entered into a definitive agreement to acquire Augmenix, Inc. for an upfront cash payment of $500 million, with potential additional payments of up to $100 million tied to sales-based milestones. Augmenix is known for its SpaceOAR® System, a therapy designed to mitigate side effects for prostate cancer radiotherapy patients. The acquisition is anticipated to close in early Q4 2018, pending standard closing conditions. While the transaction is expected to have a minimal impact on adjusted earnings per share (EPS) in 2018 and 2019, it is projected to become accretive to adjusted EPS starting in 2020 and increasingly so thereafter. On a GAAP basis, the accretion is expected to be less pronounced due to amortization and acquisition-related charges.

Key Highlights

  • 1Boston Scientific to acquire Augmenix, Inc. for $500M upfront plus up to $100M in sales-based milestones.
  • 2Acquisition targets Augmenix's SpaceOAR® System, a novel therapy for prostate cancer radiotherapy patients.
  • 3Transaction expected to close in early Q4 2018, subject to customary conditions.
  • 4Projected to be immaterial to adjusted EPS in 2018-2019, with accretion expected from 2020 onwards.
  • 5GAAP EPS impact will be less accretive or more dilutive due to amortization and acquisition costs.
  • 6The press release included as an exhibit provides further details on the agreement.

Frequently Asked Questions

The acquisition of Augmenix and its SpaceOAR® System allows Boston Scientific to expand its oncology portfolio and offer a solution that addresses a significant unmet need for prostate cancer patients undergoing radiotherapy, aiming to reduce debilitating side effects.

The acquisition is expected to be largely neutral to adjusted earnings per share (EPS) in 2018 and 2019, but it is projected to become accretive to adjusted EPS from 2020 onwards. GAAP EPS will reflect amortization and acquisition-related expenses, making it less accretive or potentially dilutive in the short term.

The transaction is anticipated to close in early the fourth quarter of 2018, provided that all customary closing conditions are met.

Yes, in addition to the $500 million upfront cash payment, Boston Scientific may pay up to an additional $100 million if Augmenix achieves certain sales-based milestones.