On July 27, 2022 PTC (NASDAQ: PTC) reported financial results for its third fiscal quarter ended June 30, 2022 (Press release, PTC Therapeutics, JUL 27, 2022, View Source [SID1234617035]).

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"In our third fiscal quarter, we again delivered strong results. We reported ARR growth of 9% and 15% on an organic constant currency basis. In addition, our recently acquired Codebeamer business had an outstanding quarter and added an additional point of ARR growth, taking constant currency ARR growth to 16%. In Q3, our cash from operations was $117 million, up 33% year over year, and our adjusted free cash flow was $132 million, up 23% year over year. The strength in Q3 was broad-based across all segments and geographic regions, driven by demand for digital transformation and SaaS," said James Heppelmann, President and CEO, PTC.

"Our differentiated product portfolio and leading SaaS capabilities position PTC to drive superior value for customers. Given the high resiliency of our business due to our subscription model coupled with our strong market position, as well as the strong execution of our teams, we are raising our key guidance measures for fiscal 2022 for the third time this year," concluded Heppelmann.

Third Quarter 2022 Highlights[1]

Key operating and financial highlights are set forth below. For additional details, please refer to the Q3’22 earnings presentation and financial data tables that have been posted to the Investor Relations section of our website at investor.ptc.com. Revenue and, as a result, operating margin, operating profit, and earnings per share are impacted by revenue recognition under ASC 606.

ARR as reported was $1,544 million at the end of Q3’22, up 9% compared to Q3’21, including $15 million related to the acquisition of Codebeamer. On a constant currency basis (including $16 million related to Codebeamer), ARR was $1,625 million, up 16%, compared to Q3’21. On an organic constant currency basis (excluding $16 million related to Codebeamer), ARR was $1,610 million, up 15% compared to Q3’21, and above guidance of $1,580 million to $1,595 million. Foreign exchange rate fluctuations had an $81 million negative impact on our Q3’22 reported ARR. ARR at the end of Q3’22 includes a $4 million reduction associated with discontinuing our business operations in Russia in Q2’22.
Cash flow from operations was $117 million, free cash flow was $112 million, and adjusted free cash flow was $132 million in Q3’22, up compared to Q3’21 by 33%, 33%, and 23%, respectively. All three metrics were above guidance. In Q3’21, cash flow from operations was $88 million, free cash flow was $85 million, and adjusted free cash flow was $107 million.
Revenue was $462 million in Q3’22, up 6% compared to Q3’21. On a constant currency basis, revenue was $480 million, up 12% compared to Q3’21.
Operating margin was 17% in both Q3’22 and Q3’21. Non-GAAP operating margin in Q3’22 was 34%, compared to 31% in Q3’21.
Earnings per share was $0.60 in Q3’22, compared to $0.43 in Q3’21. Non-GAAP earnings per share in Q3’22 was $0.97, compared to $0.83 in Q3’21.
Total cash and cash equivalents as of the end of Q3’22 was $322 million. Gross debt was $1.43 billion as of the end of Q3’22. The increase in gross debt during Q3’22 was primarily due to financing the Codebeamer acquisition with our revolving credit facility, partially offset by repaying $105 million on our revolving credit facility.
[1] The definitions of our operating and non-GAAP financial measures and reconciliations of non-GAAP financial measures to comparable GAAP measures are included below and in the reconciliation tables at the end of this press release.

Fiscal 2022 and Q4’22 Guidance

"PTC delivered solid third quarter results. Based on our Q3 performance and our forecast for the remainder of the year, including the impact of Codebeamer and DxP, we are raising our ARR and free cash flow and adjusted free cash flow guidance for fiscal 2022. Due to foreign exchange headwinds, we are reducing our revenue guidance," said Kristian Talvitie, EVP and CFO, PTC.

"Despite the foreign exchange headwinds and the impact of exiting our business in Russia in Q2’22, our resilient business model, consistent execution, and operational discipline position us to deliver on our updated targets for the year," concluded Talvitie.

Our FY’22 guidance now reflects the expected operating results of the Codebeamer business and the effect of the DxP transaction, as well as the impact of business combination accounting, incremental interest expense, and all acquisition and transaction-related charges.

Our FY’22 and Q4’22 financial guidance includes the assumptions below:

We provide ARR guidance on a constant currency basis, using our FY’22 Plan foreign exchange rates (rates as of September 30, 2021) for all periods. Unfavorable changes in foreign exchange rates have been a headwind to our reported ARR. At end of Q3’22 foreign exchange rates, FY’22 ARR would be lower by approximately $85 million, compared to our constant currency guidance (previously $34 million, based on foreign exchange rates as of the end of Q2’22).
We expect FY’22 organic churn, excluding the impact of our exit from Russia, to improve by approximately 150 basis points (previously 100 basis points) over FY’21.
Due to invoicing seasonality, the majority of our collections occur in the first half of our fiscal year. Q4 is our lowest cash flow generation quarter.
Our operating costs are expected to increase in FY’22 due to hiring, increased SaaS investments, merit increases that took effect in Q3’22, and the acquisition of the Codebeamer business in Q3’22 (updated). At the mid-point of ARR guidance, we expect FY’22 GAAP operating expenses to increase approximately 4% to 5% (previously 3% to 4%) and non-GAAP operating expenses to increase approximately 2% to 3% over FY’21.
FY’22 GAAP P&L results are expected to include the items outlined below, totaling $281 million to $291 million (previously $293 million to $308 million), as well as their related tax effects:
$170 million to $180 million (previously $160 million to $170 million) of stock-based compensation expense
$61 million (previously $58 million) of intangible asset amortization expense
$37 million (previously $35 million to $40 million) of restructuring charges
$11 million (previously approximately $5 million) of acquisition and transaction-related charges
$32 million (previously $35 million) of FY’22 net realized losses from the sale of investments
$30 million gain associated with the sale of a portion of our PLM service business (new)
Related to restructuring, for FY’22 we expect:
P&L charges of $37 million (previously $35 million to $40 million), which have been incurred in the first nine months of FY’22.
Cash outflows for restructuring payments of $40 million to $45 million, of which $38 million was paid in the first nine months of FY’22. Restructuring payments in FY’22 include $5 million related to prior period actions, primarily the relocation of our headquarters in FY’19.
Our FY’22 GAAP tax rate is expected to be approximately 20% and our non-GAAP tax rate is expected to be approximately 19%.
FY’22 capital expenditures are expected to be approximately $20 million (previously $25 million).
Our long-term goal, assuming our Debt/EBITDA ratio is below 3x, is to return approximately 50% of our free cash flow to shareholders via share repurchases, while also taking into consideration the interest rate environment and strategic opportunities (updated).
PTC’s Fiscal Third Quarter Results Conference Call

The Company will host a conference call to discuss results at 5:00 pm ET on Wednesday, July 27, 2022. To participate in the live conference call, dial (888) 330-2508 or (240) 789-2735 and provide the passcode 7328695, or log in to the webcast, available on PTC’s Investor Relations website. A replay will also be available.

Important Disclosures

Important Information About Our Non-GAAP Financial Measures

PTC provides supplemental non-GAAP financial measures to its financial results. We use these non-GAAP financial measures, and we believe that they assist our investors, to make period-to-period comparisons of our operating performance because they provide a view of our operating results without items that are not, in our view, indicative of our operating results. These non-GAAP financial measures should not be construed as an alternative to GAAP results as the items excluded from the non-GAAP financial measures often have a material impact on our operating results, certain of those items are recurring, and others often recur. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results.

Non-GAAP operating expense, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income and non-GAAP EPS exclude the effect of the following items: stock-based compensation; amortization of acquired intangible assets; acquisition-related and other transactional charges included in general and administrative expenses; restructuring and other charges, net; certain non-operating charges and credits; and income tax adjustments. Additional information about the items we exclude from our non-GAAP financial measures and the reasons we exclude them can be found in "Non-GAAP Financial Measures" on page 24 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. In FY’21, we incurred tax expense related to a South Korean tax matter which is excluded from our non-GAAP financial measures as it is related to prior periods and not included in management’s view of results for comparative purposes. We also recorded a tax benefit in FY’21 related to the release of our U.S. valuation allowance as a result of the Arena acquisition and our conclusion that it is now more likely than not that we will realize the majority of our deferred tax assets in the U.S. As the non-GAAP tax provision is calculated assuming that there is no valuation allowance, this benefit has been excluded from our non-GAAP financial measures.

Free Cash Flow and Adjusted Free Cash Flow: PTC provides information on free cash flow and adjusted free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings and to evaluate our performance against our announced long-term goals and intent to return approximately 50% of our free cash flow to shareholders via stock repurchases. Free cash flow is cash provided by (used in) operations net of capital expenditures. Adjusted free cash flow is free cash flow net of restructuring payments, acquisition and transaction-related payments, and non-ordinary course tax-related payments or receipts. Free cash flow and adjusted free cash flow are not measures of cash available for discretionary expenditures.

Constant Currency (CC): We present CC information to provide a framework for assessing how our underlying business performed excluding the effects of foreign currency rate fluctuations. To present CC information, FY’22 and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the foreign exchange rate as of September 30, 2021, rather than the actual exchange rates in effect during that period.

Operating Measures

ARR: We provide an ARR (Annual Run Rate) operating measure to help investors understand and assess the performance of our business as a SaaS and on-premise subscription company. ARR represents the annualized value of our portfolio of active subscription software, cloud, SaaS, and support contracts as of the end of the reporting period. ARR includes orders placed under our Strategic Alliance Agreement with Rockwell Automation, including orders placed to satisfy contractual minimum commitments.

We believe ARR is a valuable operating metric to measure the health of a subscription business because it captures expected subscription and support cash generation from customers.

Organic Constant Currency ARR: We provide an organic constant currency ARR measure to help investors understand and assess the performance of our business without the effect of ARR (other than insignificant amounts) from acquisitions in the comparative period and foreign exchange rate fluctuations.

Because our ARR measures represent the annualized value of customer contracts as of a point in time, they do not represent revenue for any particular period or remaining revenue that will be recognized in future periods.

Churn: We provide churn measures to enable investors to understand and assess our customer contract retention. Churn represents the difference between the ARR amount for all subscription software, cloud, SaaS, and support contracts ended within a reporting period and the annualized renewal transactions started within a reporting period, as of the end of the reporting period.

On July 27, 2022 Boston Scientific Corporation reported net sales of $3.244 billion during the second quarter of 2022, growing 5.4 percent on a reported basis, 9.6 percent on an operational1 basis and 6.6 percent on an organic2 basis, all compared to the prior year period (Press release, Boston Scientific, JUL 27, 2022, View Source [SID1234618927]). The company reported GAAP net income available to common stockholders of $246 million or $0.17 per share (EPS), compared to $172 million or $0.12 per share a year ago, and achieved adjusted3 EPS of $0.44 for the period, compared to $0.40 a year ago.

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"We had another quarter of excellent performance, a testament to the talent of our global team, the sustainability and diversification of our innovative medical technology portfolio and our strong market positions amid continued macroeconomic challenges," said Mike Mahoney, chairman and chief executive officer, Boston Scientific. "As we continue to execute our strategy, we have a tremendous opportunity to continue to deliver on our promise to bring life-changing devices and therapies to more patients who need them."

Second quarter financial results and recent developments:

Reported net sales of $3.244 billion, representing an increase of 5.4 percent on a reported basis, compared to the company’s guidance range of 3 to 6 percent; 9.6 percent on an operational basis; and 6.6 percent on an organic basis, compared to the company’s guidance range of 3 to 6 percent, all compared to the prior year period.
Reported GAAP net income available to common stockholders of $0.17 per share, compared to the company’s guidance range of $0.19 to $0.23 per share, and achieved adjusted EPS of $0.44 per share, compared to the guidance range of $0.41 to $0.43 per share.
Achieved net sales growth in each reportable segment4, compared to the prior year period:
MedSurg: 4.5 percent reported, 7.9 percent operational and 4.8 percent organic
Cardiovascular: 6.0 percent reported, 10.8 percent operational and 7.8 percent organic
Achieved the following regional net sales growth/(decline), compared to the prior year period:
U.S.: 7.4 percent reported and operational
EMEA (Europe, Middle East and Africa): (0.3) percent reported and 11.8 percent operational
APAC (Asia-Pacific): 1.9 percent reported and 11.2 percent operational
Emerging Markets5: 18.9 percent reported and 26.0 percent operational
Received U.S. Food and Drug Administration (FDA) 510(k) clearance for and launched the VersaCross Connect LAAC Access Solution developed by Baylis Medical, featuring a shapable dilator and the radiofrequency (RF) energy technology of the VersaCross RF Transseptal Solution, compatible with the WATCHMAN FXD Curve Access Sheath to provide safe and efficient access to the left side of the heart for WATCHMAN FLX implants.
Received National Medical Products Administration approval in China for the Tria Firm Ureteral Stent. The Tria stent incorporates proprietary PercuShield technology engineered to provide protection against the accumulation of both urine calcium and magnesium salt deposits during indwell.
Late-breaking data from 54,000 patients in the NCDR-LAAO Registry presented at Heart Rhythm 2022 demonstrated that the WATCHMAN FLX Left Atrial Appendage Closure (LAAC) Device was associated with a significantly lower (43% reduction) rate of in-hospital major adverse events compared with the previous-generation device driven by lower rates of pericardial effusion requiring intervention and major bleeding.
Late-breaking registry data—including a European study presented at TVT and the latest data from the Italian ITAL-neo Registry presented at EuroPCR—supported reduced paravalvular leak (PVL) and superior performance of the ACURATE neo2 Aortic Valve System over the previous-generation valve.
The investigator-sponsored ATLAS trial demonstrated a highly significant 92 percent reduction in serious lead-related complications at six months for the EMBLEM Subcutaneous Implantable Defibrillator (S-ICD) compared to single chamber transvenous ICD devices. ATLAS is the first prospective randomized controlled trial whose primary objective was to evaluate lead-related complication rates between the S-ICD and single chamber TV-ICD devices at six months after implant.
Completed enrollment in the ADVENT clinical trial—a prospective, multi-center, randomized safety and effectiveness pivotal study comparing the FARAPULSE Pulsed Field Ablation (PFA) System to standard-of-care ablation in patients with paroxysmal—or intermittent —atrial fibrillation (AF) with a primary endpoint of freedom from AF at 12 months after a single ablation procedure.
Completed enrollment in the NEwTON AF clinical trial – a prospective, multi-center, single-arm study to establish the safety and effectiveness of the INTELLANAV STABLEPOINT Ablation Catheter and Force-Sensing System in patients with symptomatic, drug-refractory, recurrent paroxysmal atrial fibrillation.
Announced agreement to purchase the majority stake of M.I.Tech Co., Ltd from Synergy Innovation Co., Ltd, subject to customary closing conditions, to broaden and complement the Boston Scientific portfolio of gastrointestinal and airway stents.
Released 2021 Performance Report, highlighting the company’s achievements in advancing environmental, social and governance (ESG) priorities to transform care, invest in employees, accelerate possibilities, protect the environment and create value responsibly.

1. Operational net sales growth excludes the impact of foreign currency fluctuations.

2. Organic net sales growth excludes the impact of foreign currency fluctuations and net sales attributable to acquisitions and divestitures for which there are less than a full period of comparable net sales.

3. Adjusted EPS excludes the impacts of certain charges (credits) which may include amortization expense, goodwill and intangible asset impairment charges, acquisition/divestiture-related net charges (credits), investment portfolio gains and losses, restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits), EU MDR implementation costs, debt extinguishment charges, deferred tax expenses (benefits) and discrete tax items.

4. In the first quarter of 2022, we reorganized our operational structure and have aggregated our core businesses, each of which generate revenues from the sale of medical devices (Medical Devices), into two reportable segments comprised of MedSurg and Cardiovascular. Within the Cardiovascular segment, the newly formed Cardiology division represents the combined former Rhythm Management and Interventional Cardiology businesses. We have revised prior period amounts to conform to the current year presentation.

5. We define Emerging Markets as the 20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities.

Net sales for the second quarter by business and region:

Increase/(Decrease)

Three Months Ended

June 30,

Reported Basis

Less: Impact
of Foreign
Currency
Fluctuations

Operational

Basis

Less:

Impact of
Recent
Acquisitions
/ Divestitures

Organic
Basis

(in millions)

2022

2021

Endoscopy

$ 560

$ 551

1.6 %

(4.3) %

5.8 %

— %

5.8 %

Urology and Pelvic Health

450

397

13.4 %

(2.8) %

16.2 %

9.2 %

7.0 %

Neuromodulation

239

247

(3.4) %

(2.4) %

(1.0) %

— %

(1.0) %

MedSurg4

1,248

1,195

4.5 %

(3.4) %

7.9 %

3.1 %

4.8 %

Cardiology

1,517

1,410

7.6 %

(4.8) %

12.5 %

4.0 %

8.5 %

Peripheral Interventions

478

473

1.2 %

(4.5) %

5.7 %

— %

5.7 %

Cardiovascular4

1,996

1,883

6.0 %

(4.7) %

10.8 %

3.0 %

7.8 %

Medical Devices4

3,244

3,077

5.4 %

(4.2) %

9.6 %

3.0 %

6.6 %

Net Sales

$ 3,244

$ 3,077

5.4 %

(4.2) %

9.6 %

3.0 %

6.6 %

Increase/(Decrease)

Three Months
Ended June 30,

Reported
Basis

Less: Impact
of Foreign
Currency
Fluctuations

Operational

Basis

(in millions)

2022

2021

U.S.

$ 1,933

$ 1,800

7.4 %

— %

7.4 %

EMEA

660

662

(0.3) %

(12.2) %

11.8 %

APAC

530

520

1.9 %

(9.3) %

11.2 %

Latin America and Canada

120

95

26.8 %

(1.1) %

27.9 %

Medical Devices4

3,244

3,077

5.4 %

(4.2) %

9.6 %

Net Sales

$ 3,244

$ 3,077

5.4 %

(4.2) %

9.6 %

Emerging Markets5

$ 427

$ 359

18.9 %

(7.1) %

26.0 %

Amounts may not add due to rounding. Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.

Growth rates that exclude the impact of foreign currency fluctuations and/or the impact of acquisitions / divestitures are not prepared in accordance with U.S. GAAP.

Guidance for Full Year and Third Quarter 2022

The company now estimates net sales growth for the full year 2022, versus the prior year period, to be in a range of approximately 6.5 to 7.5 percent on a reported basis, and approximately 8 to 9 percent on an organic basis. Full year organic net sales guidance excludes the impact of foreign currency fluctuations and net sales attributable to acquisitions and divestitures for which there are less than a full period of comparable net sales. The company now estimates EPS on a GAAP basis in a range of $0.69 to $0.76 and estimates adjusted EPS, excluding certain charges (credits), of $1.74 to $1.77.

The company estimates net sales growth for the third quarter of 2022, versus the prior year period, to be in a range of approximately 6 to 8 percent on a reported basis, and approximately 8 to 10 percent on an organic basis. Third quarter organic net sales guidance excludes the impact of foreign currency fluctuations and net sales attributable to acquisitions and divestitures for which there are less than a full period of comparable net sales. The company estimates EPS on a GAAP basis in a range of $0.20 to $0.24 and adjusted EPS, excluding certain charges (credits), of $0.43 to $0.45.

Conference Call Information

Boston Scientific management will be discussing these results with analysts on a conference call today at 8:00 a.m. ET. The company will webcast the call to interested parties through its website: www.bostonscientific.com. Please see the website for details on how to access the webcast. The webcast will be available for approximately one year on the Boston Scientific website.

About Boston Scientific
Boston Scientific transforms lives through innovative medical solutions that improve the health of patients around the world. As a global medical technology leader for more than 40 years, we advance science for life by providing a broad range of high performance solutions that address unmet patient needs and reduce the cost of healthcare. For more information, visit www.bostonscientific.com and connect on Twitter and Facebook.

Cautionary Statement Regarding Forward-Looking Statements
This press release 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," "may," "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. These forward-looking statements include, among other things, statements regarding our expected net sales; reported, operational and organic revenue growth rates; reported and adjusted EPS for the third quarter and full year 2022; our financial performance; our business plans and product performance; and the impact of the COVID-19 pandemic on the company’s results of operations. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future (together with other factors) could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this press release. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.

Risks and uncertainties that may cause such differences include, among other things: the impact of the ongoing COVID-19 pandemic on our operations and financial results; the impact of foreign currency fluctuations; future U.S. and global economic, political, competitive, reimbursement and regulatory conditions; manufacturing, distribution and supply chain disruptions and cost increases; disruptions caused by cybersecurity events; disruptions caused by extreme weather or other climate change-related events; labor shortages and increases in labor costs; new product introductions; expected procedural volumes; the closing and integration of acquisitions; demographic trends; intellectual property rights; litigation; financial market conditions; the execution and effect of our business strategy, including our cost-savings and growth initiatives; and future business decisions made by us and our competitors. New risks and uncertainties may arise from time to time and are difficult to predict, including those that have emerged or have increased in significance or likelihood as a result of the COVID-19 pandemic. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A – Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A – Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file hereafter. 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 those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this press release.

Note: Amounts reported in millions within this press release are computed based on the amounts in thousands. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in dollars.

Use of Non-GAAP Financial Information
A reconciliation of the company’s non-GAAP financial measures to the corresponding GAAP measures, and an explanation of the company’s use of these non-GAAP financial measures, is included in the exhibits attached to this press release.

CONTACT:

Media:

Kate Haranis

Investors:

Lauren Tengler

508-683-6585 (office)

508-683-4479 (office)

Media Relations

Investor Relations

Boston Scientific Corporation

Boston Scientific Corporation

[email protected]

[email protected]

BOSTON SCIENTIFIC CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

in millions, except per share data

2022

2021

2022

2021

Net sales

$ 3,244

$ 3,077

$ 6,270

$ 5,829

Cost of products sold

1,011

945

1,966

1,839

Gross profit

2,233

2,132

4,304

3,990

Operating expenses:

Selling, general and administrative expenses

1,165

1,121

2,225

2,139

Research and development expenses

335

298

654

574

Royalty expense

11

12

23

24

Amortization expense

204

180

402

365

Intangible asset impairment charges

7

45

7

45

Contingent consideration net expense (benefit)

36

(85)

48

(91)

Restructuring net charges (credits)

11

3

14

8

Litigation-related net charges (credits)

42

298

42

302

Gain on disposal of businesses and assets

—

(2)

—

(9)

1,810

1,870

3,415

3,358

Operating income (loss)

423

262

889

632

Other income (expense):

Interest expense

(64)

(86)

(343)

(168)

Other, net

(14)

(26)

(46)

11

Income (loss) before income taxes

345

149

501

474

Income tax expense (benefit)

85

(37)

131

(53)

Net income (loss)

$ 260

$ 186

$ 370

$ 527

Preferred stock dividends

(14)

(14)

(28)

(28)

Net income (loss) available to common stockholders

$ 246

$ 172

$ 342

$ 500

Net income (loss) per common share – basic

$ 0.17

$ 0.12

$ 0.24

$ 0.35

Net income (loss) per common share – assuming
dilution

$ 0.17

$ 0.12

$ 0.24

$ 0.35

Weighted-average shares outstanding

Basic

1,429.7

1,421.3

1,428.8

1,420.0

Assuming dilution

1,437.8

1,432.5

1,438.1

1,431.7

View News Release Full Screen
BOSTON SCIENTIFIC CORPORATION

NON-GAAP NET INCOME AND NET INCOME PER SHARE RECONCILIATIONS

(Unaudited)

Three Months Ended June 30, 2022

(in millions, except per share data)

Gross
Profit

Operating
Expenses

Operating
Income
(Loss)

Other
Income
(Expense)

Income
(Loss)
Before
Income
Taxes

Net
Income
(Loss)

Preferred
Stock
Dividends

Net
Income
(Loss)
Available to
Common
Stockholders

Impact
per
Share (1)

Reported

$ 2,233

$ 1,810

$ 423

$ (78)

$ 345

$ 260

$ (14)

$ 246

$ 0.17

Non-GAAP adjustments:

Amortization expense

—

(204)

204

—

204

175

—

175

0.12

Intangible asset impairment charges

—

(7)

7

—

7

7

—

7

0.00

Acquisition / divestiture-related net

charges (credits)

23

(67)

91

—

91

95

—

95

0.07

Restructuring and restructuring-related

net charges (credits)

17

(18)

35

—

35

30

—

30

0.02

Litigation-related net charges (credits)

—

(42)

42

—

42

33

—

33

0.02

Investment portfolio net losses (gains)

—

—

—

4

4

2

—

2

0.00

EU MDR implementation costs

11

(6)

17

—

17

14

—

14

0.01

Debt extinguishment charges

—

—

—

0

0

0

—

0

0.00

Deferred tax expenses (benefits)

—

—

—

—

—

34

—

34

0.02

Discrete tax items

—

—

—

—

—

(1)

—

(1)

(0.00)

Adjusted

$ 2,284

$ 1,466

$ 818

$ (74)

$ 744

$ 649

$ (14)

$ 635

$ 0.44

(1) For the three months ended June 30, 2022, the effect of assuming the conversion of Mandatory Convertible Preferred Stock (MCPS) into shares of common stock was anti-dilutive, and therefore excluded from the calculation of EPS. Accordingly, GAAP net income and adjusted net income were reduced by cumulative Preferred stock dividends, as presented in our unaudited consolidated statements of operations, for purposes of calculating net income available to common stockholders.

Three Months Ended June 30, 2021

(in millions, except per share data)

Gross
Profit

Operating
Expenses

Operating
Income
(Loss)

Other
Income
(Expense)

Income
(Loss)
Before
Income
Taxes

Net
Income
(Loss)

Preferred
Stock
Dividends

Net
Income
(Loss)
Available to
Common
Stockholders

Impact
per
Share (1)

Reported

$ 2,132

$ 1,870

$ 262

$ (113)

$ 149

$ 186

$ (14)

$ 172

$ 0.12

Non-GAAP adjustments:

Amortization expense

—

(180)

180

—

180

161

—

161

0.11

Intangible asset impairment charges

—

(45)

45

—

45

39

—

39

0.03

Acquisition / divestiture-related net charges (credits)

7

70

(63)

(1)

(64)

(65)

—

(65)

(0.05)

Restructuring and restructuring-related net charges (credits)

22

(16)

39

—

39

35

—

35

0.02

Litigation-related net charges (credits)

—

(298)

298

—

298

229

—

229

0.16

Investment portfolio net losses (gains)

—

—

—

6

6

5

—

5

0.00

EU MDR implementation costs

8

(4)

12

—

12

11

—

11

0.01

Deferred tax expenses (benefits)

—

—

—

—

—

25

—

25

0.02

Discrete tax items

—

—

—

—

—

(35)

—

(35)

(0.02)

Adjusted

$ 2,169

$ 1,396

$ 773

$ (107)

$ 665

$ 591

$ (14)

$ 577

$ 0.40

(1) For the three months ended June 30, 2021, the effect of assuming the conversion of Mandatory Convertible Preferred Stock (MCPS) into shares of common stock was anti-dilutive, and therefore excluded from the calculation of EPS. Accordingly, GAAP net income and adjusted net income were reduced by cumulative Preferred stock dividends, as presented in our unaudited consolidated statements of operations, for purposes of calculating net income available to common stockholders.

An explanation of the company’s use of these non-GAAP financial measures is provided at the end of this document.

View News Release Full Screen
BOSTON SCIENTIFIC CORPORATION

NON-GAAP NET INCOME AND NET INCOME PER SHARE RECONCILIATIONS

(Unaudited)

Six Months Ended June 30, 2022

in millions, except per share data

Gross
Profit

Operating
Expenses

Operating
Income
(Loss)

Other
Income
(Expense)

Income
(Loss)
Before
Income
Taxes

Net
Income
(Loss)

Preferred
Stock
Dividends

Net
Income
(Loss)
Available to
Common
Stockholders

Impact
per
Share (1)

Reported

$ 4,304

$ 3,415

$ 889

$ (388)

$ 501

$ 370

$ (28)

$ 342

$ 0.24

Non-GAAP adjustments:

Amortization expense

—

(402)

402

—

402

345

—

345

0.24

Intangible asset impairment charges

—

(7)

7

—

7

7

—

7

0.00

Acquisition / divestiture-related net charges (credits)

50

(112)

163

—

163

167

—

167

0.12

Restructuring and restructuring-related

net charges (credits)

35

(29)

64

—

64

55

—

55

0.04

Litigation-related net charges (credits)

—

(42)

42

—

42

33

—

33

0.02

Investment portfolio net losses (gains)

—

—

—

11

11

7

—

7

0.00

EU MDR implementation costs

21

(12)

33

—

33

28

—

28

0.02

Debt extinguishment charges

—

—

—

194

194

149

—

149

0.10

Deferred tax expenses (benefits)

—

—

—

—

—

63

—

63

0.04

Discrete tax items

—

—

—

—

—

—

—

—

(0.00)

Adjusted

$ 4,411

$ 2,811

$ 1,599

$ (183)

$ 1,416

$ 1,224

$ (28)

$ 1,197

$ 0.83

(1) For the six months ended June 30, 2022, the effect of assuming the conversion of MCPS into shares of common stock was anti-dilutive, and therefore excluded from the calculation of EPS. Accordingly, GAAP net income and adjusted net income were reduced by cumulative Preferred stock dividends, as presented in our unaudited consolidated statements of operations, for purposes of calculating net income available to common stockholders.

Six Months Ended June 30, 2021

in millions, except per share data

Gross
Profit

Operating
Expenses

Operating
Income
(Loss)

Other
Income
(Expense)

Income
(Loss)
Before
Income
Taxes

Net
Income
(Loss)

Preferred
Stock
Dividends

Net
Income
(Loss)
Available to
Common
Stockholders

Impact
per
Share (1)

Reported

$ 3,990

$ 3,358

$ 632

$ (157)

$ 474

$ 527

$ (28)

$ 500

$ 0.35

Non-GAAP adjustments:

Amortization expense

—

(365)

365

—

365

328

—

328

0.23

Intangible asset impairment charges

—

(45)

45

—

45

39

—

39

0.03

Acquisition / divestiture-related net charges (credits)

21

34

(13)

(199)

(212)

(219)

—

(219)

(0.15)

Restructuring and restructuring-related net charges (credits)

40

(48)

88

—

88

79

—

79

0.05

Litigation-related net charges (credits)

—

(302)

302

—

302

233

—

233

0.16

Investment portfolio net losses (gains)

—

—

—

152

152

117

—

117

0.08

EU MDR implementation costs

15

(8)

23

—

23

20

—

20

0.01

Deferred tax expenses (benefits)

—

—

—

—

—

43

—

43

0.03

Discrete tax items

—

—

—

—

—

(38)

—

(38)

(0.03)

Adjusted

$ 4,066

$ 2,625

$ 1,442

$ (205)

$ 1,237

$ 1,129

$ (28)

$ 1,102

$ 0.77

(1) For the six months ended June 30, 2021, the effect of assuming the conversion of MCPS into shares of common stock was anti-dilutive, and therefore excluded from the calculation of EPS. Accordingly, GAAP net income and adjusted net income were reduced by cumulative Preferred stock dividends, as presented in our unaudited consolidated statements of operations, for purposes of calculating net income available to common stockholders.

An explanation of the company’s use of these non-GAAP financial measures is provided at the end of this document.

BOSTON SCIENTIFIC CORPORATION
Q3 and FY 2022 GUIDANCE RECONCILIATIONS
(Unaudited)

Net Sales

Q3 2022 Estimate

Full Year 2022 Estimate

(Low)

(High)

(Low)

(High)

Reported growth

6.0 %

8.0 %

6.5 %

7.5 %

Less: Impact of foreign currency fluctuations

(4.0) %

(4.0) %

(4.0) %

(4.0) %

Operational growth

10.0 %

12.0 %

10.5 %

11.5 %

Less: Impact of certain acquisitions / divestitures

2.0 %

2.0 %

2.5 %

2.5 %

Organic growth

8.0 %

10.0 %

8.0 %

9.0 %

Earnings per Share

Q3 2022 Estimate

Full Year 2022 Estimate

(Low)

(High)

(Low)

(High)

GAAP results

$ 0.20

$ 0.24

$ 0.69

$ 0.76

Amortization expense

0.12

0.12

0.48

0.48

Acquisition / divestiture-related net charges (credits)

0.05

0.04

0.19

0.18

Restructuring and restructuring-related net charges (credits)

0.03

0.02

0.09

0.07

Litigation-related net charges (credits)

—

—

0.02

0.02

Debt extinguishment charges

—

—

0.10

0.10

Other adjustments

0.04

0.04

0.15

0.14

Adjusted results

$ 0.43

$ 0.45

$ 1.74

$ 1.77

Use of Non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements presented on a GAAP basis, we disclose certain non-GAAP financial measures, including adjusted net income (loss), adjusted net income (loss) available to common stockholders and adjusted net income (loss) per share (EPS) that exclude certain amounts; operational net sales, which exclude the impact of foreign currency fluctuations; and organic net sales, which exclude the impact of foreign currency fluctuations as well as the impact of certain acquisitions and divestitures with less than a full period of comparable net sales. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States and should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. Further, other companies may calculate these non-GAAP financial measures differently than we do, which may limit the usefulness of those measures for comparative purposes.

To calculate adjusted net income (loss), adjusted net income (loss) available to common stockholders and adjusted net income (loss) per share we exclude certain charges (credits) from GAAP net income (loss) and GAAP net income (loss) available to common stockholders. Amounts are presented after-tax at the company’s effective tax rate, unless the amount is a significant unusual or infrequently occurring item in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 740-270-30, "General Methodology and Use of Estimated Annual Effective Tax Rate." Please refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our most recent Annual Report filed on Form 10-K filed with the Securities and Exchange Commission or any Quarterly Report on Form 10-Q that we file thereafter for an explanation of each of these adjustments and the reasons for excluding each item.

The GAAP financial measures most directly comparable to adjusted net income (loss), adjusted net income (loss) available to common stockholders and adjusted net income (loss) per share are GAAP net income (loss), GAAP net income (loss) available to common stockholders and GAAP net income (loss) per common share – assuming dilution, respectively.

To calculate operational net sales growth rates, which exclude the impact of foreign currency fluctuations, we convert actual net sales from local currency to U.S. dollars using constant foreign currency exchange rates in the current and prior periods. To calculate organic net sales growth rates, we also remove the impact of acquisitions and divestitures with less than a full period of comparable net sales. The GAAP financial measure most directly comparable to operational net sales and organic net sales is net sales on a GAAP basis.

Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP financial measure are included in the accompanying schedules.

Management uses these supplemental non-GAAP financial measures to evaluate performance period over period, to analyze the underlying trends in our business, to assess our performance relative to our competitors and to establish operational goals and forecasts that are used in allocating resources. In addition, management uses these non-GAAP financial measures to further its understanding of the performance of our operating segments. The adjustments excluded from our non-GAAP financial measures are consistent with those excluded from our operating segments’ measures of net sales and profit or loss. These adjustments are excluded from the segment measures reported to our chief operating decision maker that are used to make operating decisions and assess performance.

We believe that presenting adjusted net income (loss), adjusted net income (loss) available to common stockholders, adjusted net income (loss) per share, operational net sales growth rates and organic net sales growth rates, in addition to the corresponding GAAP financial measures, provides investors greater transparency to the information used by management for its operational decision-making and allows investors to see our results "through the eyes" of management. We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance.

On July 27, 2022 IDEAYA Biosciences, Inc. (Nasdaq:IDYA), a synthetic lethality focused precision medicine oncology company committed to the discovery and development of targeted therapeutics, reported it has entered into a clinical trial collaboration and supply agreement with Amgen Inc. to evaluate the efficacy and safety of IDE397, its investigational, potential best-in-class, small molecule MAT2A inhibitor, with Amgen’s AMG 193, an investigational small molecule MTA-cooperative inhibitor of PRMT5, in a Phase 1 clinical trial (Press release, Ideaya Biosciences, JUL 27, 2022, View Source [SID1234616986]).

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"This clinical collaboration with Amgen builds on IDEAYA’s ongoing clinical evaluation of IDE397 as monotherapy and in selected combinations in our Phase 1/2 clinical trial, including with taxanes and pemetrexed. We are pleased to collaborate with Amgen to also evaluate the MAT2A-PRMT5 synthetic lethality combination in the clinic," said Yujiro S. Hata, President and Chief Executive Officer, IDEAYA Biosciences.

"Mechanistically, each of MAT2A and PRMT5 are synthetic lethal with MTAP gene deletion in tumors. The synthetic lethality of each of these targets provides a complementary approach for targeting MTAP-null tumors," said Dr. Michael White, Ph.D., Senior Vice President and Chief Scientific Officer, IDEAYA Biosciences.

IDE397 is a potent and selective small molecule inhibitor targeting methionine adenosyltransferase 2a (MAT2A), in patients having solid tumors with methylthioadenosine phosphorylase (MTAP) deletion. The MTAP deletion patient population is estimated to represent approximately 15% of solid tumors, including approximately 15% of NSCLC, 28% of esophageal, 26% of bladder, and 10% of esophagogastric cancers.

IDEAYA is evaluating IDE397 in an ongoing Phase 1/2 clinical trial. The company has initiated and is actively enrolling patients into monotherapy expansion and combination cohorts of the IDE397 Phase 1 clinical trial, including in combination with docetaxel in NSCLC, paclitaxel in esophagogastric cancer and pemetrexed in NSCLC. IDEAYA is leading early clinical development of IDE397 in collaboration with GSK. Subject to exercise of its option, GSK will lead later-stage clinical development of IDE397.

Amgen is developing AMG 193, an investigational small molecule methylthioadenosine (MTA) cooperative inhibitor targeting protein arginine methyltransferase 5 (PRMT5), as monotherapy and in combination with docetaxel in MTAP null solid tumors, in an ongoing Phase 1 clinical trial.

Under the mutually non-exclusive clinical trial collaboration and supply agreement, IDEAYA will provide IDE397 drug supply to Amgen, who will be the sponsor of the Phase 1 clinical combination trial. IDEAYA and Amgen will jointly share external costs of the clinical trial and will jointly oversee clinical development of the combination therapy. IDEAYA and Amgen each retain all commercial rights to their respective compounds, including as monotherapy or as combination therapies.

On July 27, 2022 EVERSANA reported to be a Global Sponsor at this year’s Pharma Japan 2022 hosted by Reuters, taking place on 28-29 September (Press release, EVERSANA, JUL 27, 2022, View Source [SID1234617004]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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Pharma has entered a new world, where scientific innovation is no longer enough to be successful. This, coupled with looming deregulation and an influx of innovative treatments, means that the time is now for you to put your strategy for the future into action. It’s time to go beyond the medicine and focus on patient value.

EVERSANA is present at Pharma Japan and committed to providing insights and support to our clients during this transformative time in our industry.

Join EVERSANA’s Rob Arnold, Executive Vice President for APAC, on September 28 at 9:10-9:30 JST as he presents the session "Beyond Fortress Japan." In this session, Rob will discuss how Japanese companies can no longer rely on the model of selling in Japan and out-licensing elsewhere. They need to enter at least EU, US and China and they need to do it soon. However, this is fraught with risk and requires alignment and tenacity. EVERSANA will share our thoughts on the emerging entry models based on our client support perspective.

Talk with our business experts to learn more about how our global commercial solutions provide you with the right strategies and tools to help accelerate your speed to market. Click the button below to schedule a meeting. Look for an EVERSANA team member live on the conference networking platform.

On July 27, 2022 VerImmune, Inc. ("VerImmune"), a biotechnology company developing new therapeutic modalities that aim to redirect the body’s pre-existing immunity toward cancer, reported the close of $2.5 million in Seed funding (Press release, VerImmune, JUL 27, 2022, View Source [SID1234617020]). The round was led by SeedFolio, a seed series venture capital firm focused on innovative, early-stage companies with game-changing impact potential. The round also included participation from US and global investment venture firms such as Ulu Ventures, and Proxima VC as well as leading private investment syndicate funds such as the NuFund Venture group (previously Tech Coast Angels- San Diego), Gaingels, Mana Ventures, and others.

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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VerImmune intends to use this Seed round financing to further accelerate VerImmune’s lead product development timelines as well as grow the company’s team.

"We are delighted to successfully complete this new seed financing round. Our ability to attract a high-quality diverse group of both US and international investors reflects the global enthusiasm for VerImmune’s technology, management and plans to develop this potentially transformative immuno-oncology treatment for all cancer patients," said Joshua Wang, Founding CEO. "This closing comes at an exciting time for VerImmune as it marks the third wave of deals VerImmune has been able to achieve in the last 6 months following announcements on collaborations with well-established global pharmaceutical companies earlier this year."

"We are delighted to have led the financing for VerImmune. They have stood out due to their highly differentiated platform and mechanistic approach to target tumors for destruction," said Joe Gatto, Managing Director of SeedFolio and VerImmune’s lead investor. "Despite their founding during the Covid-19 pandemic and recent market uncertainties, I have been very impressed by their resiliency and continued ability to produce strong supportive preclinical data."

Another major investor, Haolin Sung, Partner at Proxima VC, a healthcare investment firm that focuses on outstanding enterprises with highly innovative technologies, also said the following: "We are extremely excited for VerImmune’s ViP (Virus-inspired Particle) platform technology. Cancer remains as a huge unmet medical need, and we see the potential pivotal role of benefiting cancer patients through the Anti-tumor Immune Redirection (AIR) approach. Importantly, we see the opportunity for the ViP to change treatment paradigms beyond oncology." Mr. Sung, will be joining VerImmune’s board of directors and represent this round of seed investors.

VerImmune was founded in early 2020 and had been headquartered for the past two years at Fastfoward 1812, near Johns Hopkins East Baltimore Campus in Maryland. In early 2022, the company moved its research and development laboratories to Johnson & Johnson Innovation – JLABS @ Washington, DC and is now fully operational. The relocation of VerImmune’s laboratory headquarters continues to be within the BioHealth Capital Region (BHCR) cluster which consists of Maryland, Washington D.C and Virginia.

"As we contemplated expanding our presence and growth in 2022, remaining in the BHCR cluster was crucial for us given our strong existing relationships within this rich ecosystem of public and private institutions. This is an exciting time for us as we look towards expanding our team and maturing our company development pipeline with our funding, partnerships, and new state-of-the-art research facilities at JLABS @ Washington, DC," said John Troyer, COO.