Good morning and welcome to the Boston Scientific Fourth Quarter 2023 Earnings Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Lauren Tengler, Vice President, Investor Relations. Please go ahead.

Thank you, Drew. Welcome, everyone, and thanks for joining us today. With me on today's call are Mike Mahoney, Chairman and Chief Executive Officer; and Dan Brennan, Executive Vice President and Chief Financial Officer. We issued a press release earlier this morning announcing our Q4 and full year 2023 results, which included reconciliations of the non-GAAP measures used in the release. We have posted a copy of that release, as well as reconciliations of the non-GAAP measures used in today's call to the Investor Relations section of our website under the heading Financials & Filings. The duration of this morning's call will be approximately one hour. Mike and Dan will provide comments on Q4 and full year performance, as well as the outlook for the business including 2024 guidance, and then we'll take your questions. During today's Q&A session, Mike and Dan will be joined by our Chief Medical Officer, Dr. Ken Stein. Before we begin, I'd like to remind everyone that on this call, operational revenue growth excludes the impact of foreign currency fluctuations, and organic revenue growth further excludes acquisitions and divestitures for which there are less than a full period of comparable net sales. Relevant acquisitions and divestitures excluded for organic growth are Baylis Medical, which closed on February 14th, 2022; the majority stake investment in Acotec Scientific Holdings Limited, Apollo Endosurgery and Relievant Medical, which closed in February, April, November 2023, respectively. Divestitures include the Endoscopy Pathology business, which closed in April 2023. Guidance excludes the previously announced agreement to acquire Axonics, Inc., which is expected to close in the first half of 2024, subject to customary closing conditions. For more information, please refer to our financial and operating highlights deck, which may be found on our Investor Relations website. On this call, all references to sales and revenue, unless otherwise specified, are organic. This call contains forward-looking statements within the meaning of federal securities laws, which may be identified by words like anticipate, expect, may, believe, estimate, and other similar words. They include among other things, statements about our growth in market share, new and anticipated product approvals and launches, acquisitions, clinical trials, cost savings and growth opportunities, our cash flow and expected use, our financial performance, including sales, margins and earnings as well as our tax rates, R&D spend and other expenses. 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. Factors that may cause such differences include those described in the Risk Factors section of our most recent 10-K and subsequent 10-Qs filed with the SEC. These statements speak only as of today's date and we disclaim any intention or obligation to update them. At this point, I'll turn it over to Mike.

Thanks, Lauren, and thank you to everyone for joining us today. The results for 2023 were excellent, marking one of the strongest years in our company's history and surpassing our financial goals for the year. This success is driven by our innovation, clinical evidence generation, commercial execution, and the dedication of our global teams. In the fourth quarter of 2023, total company operational sales increased by 15%. Our organic sales rose by 14% compared to the fourth quarter of 2022, exceeding our guidance of 8% to 10%. For the full year of 2023, operational sales grew by 13% versus 2022, with organic sales increasing by 12%, surpassing our guidance of approximately 11%. Notably, six out of our eight business units experienced double-digit sales growth in the fourth quarter and across the full year. All regions also achieved double-digit growth in both the fourth quarter and for the entire year of 2023. This strong performance underscores our category leadership strategy and commitment to innovation and commercial excellence. The fourth quarter adjusted EPS was $0.55, reflecting a 24% increase compared to 2022, surpassing the upper limit of our guidance range of $0.49 to $0.52. For the full year, adjusted EPS was $2.05, a 20% growth from 2022, also exceeding our guidance of $1.99 to $2.02. Our adjusted operating margin for the fourth quarter was 26.6%, and for the full year, it was 26.3%, which is encouraging as it surpasses pre-pandemic levels. We generated a cash flow of $1.8 billion for the year and adjusted free cash flow of $2.5 billion, in line with our expectations. Looking ahead to 2024, we anticipate continued healthy procedure volumes, guiding organic growth of 7% to 9% for the first quarter and 8% to 9% for the full year. Our expected adjusted EPS for Q1 2024 is $0.50 to $0.52. For the full year, we estimate adjusted EPS to be between $2.23 and $2.27, reflecting a growth of 9% to 11%. This guidance does not include the acquisition of Axonics, which is expected to finalize in the first half of 2024. Despite potential margin pressures in 2024 due to foreign exchange impacts and investments in manufacturing capacity and sales efforts for our upcoming product launches, we remain focused on improving our operating income margins and aim to increase our adjusted operating margin by 150 basis points from 2024 to 2026. Dan will now provide more insights into our financials for both 2023 and 2024. I will also share additional highlights from our 2023 results and commentary on our outlook. Regionally, the US saw an 11% growth in the fourth quarter of 2022, and for the full year 2023, growth was at 10%, particularly strong in our Watchman, EP, Endo, and Uro business units. Europe, the Middle East, and Africa experienced a 12% operational growth compared to Q4 2022 and 13% on a full-year basis. This significant growth is backed by new product launches, pricing discipline, and strong commercial execution. We look forward to the upcoming year with ongoing momentum across the region, especially with our innovative EP portfolio and growth opportunities in emerging markets within the EMEA region. The Asia Pacific region saw a 17% operational growth compared to Q1 2019 and full-year 2022, with all major markets experiencing strong double-digit growth. Japan had a robust year with double-digit growth, driven by the launch of new products, including AGENT, DCB, Rezūm, POLARx FIT, and WATCHMAN FLX. On a full-year basis, China achieved approximately 20% growth compared to 2022. This steady growth is supported by our diverse portfolio, focus on innovation, and strong commercial execution. Looking ahead, we expect China to contribute mid-teens growth from 2024 to 2026 and to reach over $1 billion in sales in 2024, supported by new product launches, supply chain adaptability, and ongoing investments in our talent and capabilities. Our team in Latin America grew 17% operationally compared to both Q4 and full-year 2022, with seven out of eight business units recording double-digit growth on a full-year basis. Now, I would like to provide some insights on our business units. Urology had an outstanding quarter, with 10% organic growth compared to Q4 2022 and 11% organic growth for the full year, led by our Stone Management and Prosthetic Urology segments. In 2023, we relaunched our direct-to-patient campaign to raise awareness for erectile dysfunction, supporting double-digit growth within our Prosthetic Urology franchise. We are enthusiastic about the upcoming opportunities in Urology, including our recently announced agreement to acquire Axonics, which offers innovative devices for urinary and bowel dysfunction. We look forward to combining these complementary portfolios and enhancing access to differentiated technologies for both physicians and patients. Endoscopy sales were also impressive this quarter, growing by 12% operationally and 11% organically when compared to the fourth quarter of 2022, resulting in a full year growth of 12% operationally and 11% organically. This strong performance was driven by AXIOS and single-use scopes, along with broad double-digit growth across all regions enabled by our extensive portfolio, new product innovations, and a commitment to commercial excellence. Neuromodulation sales increased by 7% operationally and 3% organically compared to Q4 2022, and for the full year, they grew 7% operationally and 5% organically versus 2022. Our Brain franchise saw double-digit growth in both the quarter and on a full-year basis, fueled by the Vercise Genus portfolio and our innovative Image Guided Programming designed to enhance precision and efficiency in deep brain stimulation procedures. Our Pain franchise was flat year-over-year in Q4, which aligns with our expectations. However, we anticipate improved performance in 2024 with the recent launch of our US WaveWriter Alpha DPN indication and the compelling real-world data on FAST presented at NANS. Furthermore, with the completion of our Relievant Medsystems acquisition in the fourth quarter, we are excited about expanding our Pain portfolio to include a new Intracept system for treating chronic low back pain. Peripheral Interventions also saw strong performance, growing 12% operationally and 10% organically compared to Q4, and achieving a full year growth of 13% operationally and 11% organically versus 2022. The arterial growth was driven by our robust Drug-Eluting portfolio in both Q4 and for the full year. The market remains underpenetrated, with over half of procedures still using bare-metal devices, highlighting the necessity for our continued focus on innovation and clinical evidence. In the Venous market, Q4 and full-year growth was driven by Varithena, our leading varicose vein technology. Additionally, Q4 EKOS growth was aided by REAL-PE, which provides a comprehensive real-world data set for evaluating advanced therapies for pulmonary embolism patients. Our Interventional Oncology franchise experienced significant growth in both Q4 and 2023, achieving low double-digits growth thanks to our strong portfolio of embolization technologies and cancer therapies. We are also eager to expand our clinical evidence and have started enrollment in the ROWAN trial, which is examining the safety and efficacy of TheraSphere combined with immunotherapy in treating HCC, the most common form of primary liver cancer. Cardiology delivered an outstanding fourth quarter and year with both operational and organic sales growing by 14% compared to both the fourth quarter and the full year of 2022. In Cardiology, Interventional Cardiology Therapies saw a 10% growth for both the fourth quarter and the full year. The growth in our Coronary Therapies franchise was propelled by strong performances in our international regions and globally across our Imaging franchise. The AGENT Drug-Coated Balloon is performing excellently in Japan, and we anticipate its approval in the US during the first half of 2024. AGENT DCB will be the first coronary drug-eluting balloon in the US approved for in-stent restenosis, providing a solution to an unmet clinical need for physicians and patients. Our Structural Heart Valves franchise also experienced double-digit growth in both the fourth quarter and on a full-year basis, driven by the success of ACURATE Neo2 in Europe. We have treated over 70,000 patients globally with our ACURATE technology so far. Looking ahead, we expect the ACURATE Prime to receive approval in Europe in 2025. However, after reviewing the interim analysis of the US ACURATE IDE data, we will now await the full one-year data from the randomized control trial of 100 patients to determine our regulatory strategy. As a result, we no longer expect approval of ACURATE Prime in the US in 2024. In alignment with the FDA, we are pausing enrollment in the Single-arm Continued Access study, but will continue with enrollment in the randomized extended durability cohorts. We hope to have further information available in the second half of 2024 after a complete data review. WATCHMAN sales grew by 23% organically compared to the fourth quarter of 2022 and by 25% on a full-year basis. Q4 ended with record sales and strong utilization across all major markets. We have now treated over 400,000 patients globally with WATCHMAN technology. The US Q4 growth of 23% was supported by our broad product portfolio and the initial launch of WATCHMAN FLX Pro, which we plan to fully launch in the first quarter. We are committed to expanding the clinical evidence supporting this technology and are pleased with our post-market HEAL-LAA trial's enrollment pace, especially with our newly added cohort studying WATCHMAN FLX Pro in an underrepresented patient demographic. We are also eagerly looking forward to launching our Monotherapy trial, SIMPLIFY, later this year, which examines WATCHMAN FLX Pro paired with a simplified post-implant drug regimen. Cardiac Rhythm Management sales grew 5% organically compared to Q4 2022 and increased by 6% organically on a full-year basis. Our Diagnostics franchise has outpaced market growth with double-digit growth, driven by a comprehensive portfolio and ongoing investments in innovation. In Core CRM, our high-voltage business experienced low single-digit growth, while our low-voltage business saw mid single-digit growth for both Q4 and the full year of 2023. Our performance was supported by our distinct high-voltage portfolio and various shock polarity options. Moving forward, we expect our Core CRM growth to align with market performance in 2024. In Electrophysiology, sales surged by 43% both operationally and organically compared to Q4 2022, with a full-year growth of 37% operationally and 33% organically compared to 2022. The US fourth quarter witnessed a 40% organic growth, driven by our POLARx launch and continuous momentum with our Access Solutions portfolio. Our international EP growth also accelerated in Q4, recording a 46% organic growth, significantly aided by improved supply of FARAPULSE consoles. We have now treated over 40,000 patients globally with the FARAPULSE technology. We are excited to announce that we have received FDA approval for FARAPULSE, allowing us to enter the US market immediately. We are committed to investing in Clinical Evidence to explore new indications and enhance access to our FARAPULSE technology. Late last year, we initiated the AVANT GUARD trial to evaluate the safety and efficacy of the system as a first-line treatment for Persistent AF compared to antiarrhythmic drug therapy. Furthermore, real-world data presented at AHA covered more than 17,000 patients treated with FARAPULSE from the MANIFEST-17K registry, reinforcing the platform’s real-world safety profile with no reports of permanent phrenic nerve palsy, pulmonary vein stenosis, or esophageal injury, and a major adverse event rate of less than 1%. We are enthusiastic about introducing this innovative technology into more markets and expect FARAPULSE to receive approvals in Japan and China likely in the latter half of this year. In conclusion, I am proud of our global team's achievements in 2023, resulting in a 12% organic sales growth and a 20% adjusted EPS growth. We are excited for the upcoming year and remain dedicated to our talent and maintaining a culture that drives outstanding performance to meet our long-term plan objectives. Those objectives include achieving average sales growth of 8% to 10% over a three-year period, expanding our adjusted operating margin by 150 basis points, ensuring double-digit adjusted EPS growth, and improving our free cash flow conversion to around 70% by 2026. With that, I will hand it over to Dan for more details on the financials.

Thanks, Mike. Fourth quarter 2023 consolidated revenue of $3,725 million, represents 14.9% reported growth versus fourth quarter of 2022 and includes a 40 basis point tailwind from foreign exchange, in line with our expectations. Excluding this $12 million tailwind from foreign exchange, operational revenue growth was 14.5% in the quarter. Sales from closed acquisitions and divestitures contributed 90 basis points resulting in 13.6% organic revenue growth, exceeding our guidance range of 8% to 10%. Q4 2023 adjusted earnings per share of $0.55 grew 24% versus 2022, exceeding the high-end of our guidance range of $0.49 to $0.52, primarily driven by our strong sales performance. Full year 2023 consolidated revenue of $14,240 million represents 12.3% reported revenue growth versus full year 2022 and includes an 80 basis point headwind from foreign exchange, again in line with our expectations. Excluding this $104 million headwind from foreign exchange, operational revenue growth for the year was 13.1%. Sales from closed acquisitions and divestitures contributed 80 basis points, resulting in 12.3% organic revenue growth, exceeding our guidance range of approximately 11%. Full year 2023 adjusted earnings per share of $2.05, grew 20% versus 2022, exceeding the high end of our guidance range of $1.99 to $2.02. Adjusted gross margin for the fourth quarter was 70.4%, resulting in full year 2023 adjusted gross margin of 70.7%, in line with our expectations and representing a 20 basis point improvement versus full year 2022, inclusive of a 220 basis point headwind from foreign exchange. In 2024, we expect a mixed benefit from our new launches with offsetting headwinds from FX and the incremental investment in our manufacturing capacity. And as a result, we anticipate our full year 2024 adjusted gross margin will be at or slightly below our full-year 2023 rate. Fourth quarter adjusted operating margin was 26.6%, resulting in a full year 2023 adjusted operating margin of 26.3%, improving 70 basis points versus 2022. We expect to expand adjusted operating margin in 2024 by another 30 basis points to 50 basis points, balancing progress towards our long-range plan goal of 150 basis points over the three years, 2024 to 2026, with flexibility for critical investments to support key launches. On a GAAP basis, the fourth-quarter operating margin was 15.7%, resulting in a full year reported operating margin of 16.5%. Moving to below the line, fourth quarter adjusted interest and other expenses totaled $79 million, resulting in full year adjusted interest and other expenses of $331 million in line with our expectations. On an adjusted basis, our tax rate for the fourth quarter was 10% and 11.2% for the full year 2023, including favorable discrete tax items and the benefit from stock compensation accounting. Our operational tax rate was 14.6% for the fourth quarter and 13.9% for the full year, again in line with expectations. Fully diluted weighted average shares outstanding ended at 1,477 million shares in Q4 and 1,464 million shares for full year 2023. Free cash flow for the quarter was $718 million with $984 million of operating activities, less $267 million of net capital expenditures. Excluding special items, adjusted free cash flow was $913 million. Full year 2023 cash flow was $1.8 billion and adjusted free cash flow was $2.5 billion, both in line with expectations. For 2024, we expect full year free cash flow to be in excess of $2 billion, which includes approximately $800 million of expected payments related to acquisitions, restructuring, litigation and other special items. As of December 31st, 2023, we had cash on hand, $865 million, and our gross debt leverage was 2.3 times. We expect to fund the Axonics acquisition through a mix of cash on hand and new debt, which will be determined prior to or at the time of close. Our top capital allocation priority remains strategic tuck-in M&A, followed by annual share repurchases to offset dilution from employee stock grants. Our legal reserve was $377 million as of December 31st, a decrease of $30 million versus the prior quarter, $108 million of this reserve is already funded through our qualified settlement funds. Now I'll walk through guidance for the first quarter and the full year 2024. We expect full year 2024 reported revenue growth to be in a range of 8.5% to 9.5% versus 2023. Excluding an approximate 50 basis point headwind from foreign exchange based on current rates, we expect full year 2024 operational revenue growth to be 9% to 10%, excluding a 100 basis point contribution from closed acquisitions, we expect full year 2024 organic revenue growth to be in a range of 8% to 9% versus 2023. We expect first quarter 2024 reported revenue growth to be in a range of 7.5% to 9.5% versus first quarter 2023. Excluding an approximate 100 basis point headwind from foreign exchange based on current rates, we expect first quarter 2024 operational growth to be 8.5% to 10.5%, excluding a 150 basis point contribution from closed acquisitions, we expect first quarter 2024 organic revenue growth to be in a range of 7% to 9% versus Q1 2023. We expect our full year 2024 adjusted below the line expenses to be approximately $330 million. Under current legislation, including enacted laws and issued guidance under OECD Pillar Two rules, we forecast a full year 2024 operational tax rate of approximately 14% and an adjusted tax rate of approximately 13%. We continue to monitor tax legislation globally, including the currently drafted law to partially repeal US R&D capitalization. If the law were to be passed as currently proposed, we would expect a tailwind of approximately 100 basis points to our operational tax rate in 2024. We expect full year adjusted earnings per share to be in a range of $2.23 to $2.27, representing 9% to 11% growth versus 2023, including an approximate $0.04 headwind from foreign exchange at current rates and existing hedging contracts, which will be recognized ratably through the year. We expect first quarter adjusted earnings per share to be in a range of $0.50 to $0.52. For more information, please check our investor relations website for Q4 2023 financial and operational highlights, which outlines more details on Q4 and full year results and 2024 guidance. In closing, I'm very proud of our 2023 performance and look forward to executing on our 2024 guidance of 8% to 9% organic revenue growth, 30 basis points to 50 basis points of adjusted operating margin expansion and adjusted EPS growth of 9% to 11%. Before I turn it back over to Lauren for the Q&A, I wanted to provide a quick update. A key part of our talent strategy is moving high-potential individuals throughout the company to give them a broad set of experiences. As part of this, effective March 1st, Lauren Tengler will become the Global Controller for our Urology business unit, providing financial leadership to the global business and importantly, playing a key role in the integration of the Axonics business. Lauren previously spent many years within our Urology business, making her uniquely qualified for this opportunity. Following Lauren's transition, Jon Monson, currently our Chief Accounting Officer, will move to our Investor Relations function, leading Ally DeVoe and the rest of the team. I know the investment community will join me in thanking Lauren for her leadership and contributions and in welcoming Jon to the role.

Thanks so much, Dan. Drew, let's open it up to questions for the next 30 minutes or so. In order for us to take as many questions as possible, please limit yourself to one question. Drew, please go ahead.

Thank you. We will now begin the question-and-answer session. The first question comes from Robbie Marcus with JPMorgan. Please go ahead.

Oh, great. Congrats on a really good quarter and congratulations, Lauren, on the promotion. Wanted to ask on two of the biggest product drivers in 2024, WATCHMAN and FARAPULSE. FARAPULSE got approval today. Wanted to see what's included in guidance for this year and how to think about phasing over the year. How long will it take to get into hospitals and approved on formularies? And then second on WATCHMAN, look, still had a very good quarter and fourth quarter, but growth slowed a little bit. How should we be thinking about the potential for WATCHMAN and 20% plus growth in 2024? Thanks a lot.

Sure. Thanks, Robbie, for the comments. I'll start with the WATCHMAN, just an excellent platform with the growth of 23% for the quarter, 25% for the full year. Terrific work. And as you know, that product gets larger and larger for us. I had to cut the script back because the clinical investments we're making with WATCHMAN will go on for a while, and we can touch on those if interested. But as you know, we continue to exceed likely 90% share in the US. We'll be rolling out WATCHMAN Flex Pro, you know, more as a percent of our total mix in the US in the first quarter and throughout the year. So you'll continue to see that, which is a differentiated platform. So with the clinical work that we're doing and the WATCHMAN Flex Pro and the Steerable Sheath likely to be in the market in 2024 as well, we continue to expect to gain share, and we aim to significantly widen the market opportunity through these clinical trials. So full steam ahead with WATCHMAN. On FARAPULSE, maybe the most exciting day I've had in my career at Boston Scientific with this platform that we have, based on the results that we've seen in Europe and the enthusiasm globally for our PFA platform. And to receive approval today was really exciting. We did anticipate a first-quarter approval for FARAPULSE. And as you might expect, we expect the impact of FARAPULSE to be, you know, somewhat in the first quarter and much more significant as the year goes on as we work with contracting with hospitals, getting on contract and getting the capital approved and rolling it out. But we have a lot of experience in doing that through our European success that we've enjoyed. Our team is trained. We have installation team. We continue to invest in it. So we're really excited about aiming to disrupt the EP market with what we think is the premier PFA platform.

Great. Thanks a lot.

The next question comes from Joanne Wuensch with Citi. Please go ahead.

Thank you and good morning. I don't want to leave FARAPULSE quite yet, and I suspect there'll be a lot of questions on it this call. But if you're looking for China and Japan approval in the second half of '24, could you sort of outline what you think those opportunities may be? And then can you just give a quick highlight on some of the other sort of higher profile cardiology companies such as POLARx and AGENT? Thank you.

Ken can provide more details, but it's clear that China and Japan present significant opportunities in the EP market. These are the largest markets we compete in, and we are currently under-scaled, especially in China. In Japan, we've gained considerable momentum over the past 18 months with our POLARx launch, resulting in over 40% growth in our EP business. Our commercial capabilities in Japan are now more robust, and we anticipate that the approval of FARAPULSE in the second half of this year will be a key growth driver for us in Japan. We are quite confident about this. The Chinese market could potentially be even larger, but we are currently under-scaled there, so we plan to invest significantly. We have a new leader for our EP business in China, June Chang, who we are excited about. We intend to make further commercial and clinical investments and hope to secure approval in China in the latter part of the year. These factors will provide nice growth opportunities for us in 2024, with more significant impacts expected in 2025. Ken, would you like to add anything about FARAPULSE? Dr. Stein?

I mean, I love to comment on FARAPULSE. Again it is a very exciting day. Joanne, in terms of the questions specifically about Japan and China, right, I think we got to realize I mean, AFib is a global disease. I hate to use the word pandemic, but it is pandemic. Now and we're really pleased about the strength of the clinical trial data that we have as well as the commercial experience in Europe with, as Mike said, you know, greater than 40,000 patients already treated to-date. And it's that strength of the clinical data, right, that led us to the really, I think, rapid approval that we got from the FDA, and that has led us to update our anticipated approval times both in Japan and China. Again, I think having said that, you know, we look to those approvals in the second half. So I don't think we're going to expect to really see too much material out of that until we get into 2025. But they are both large and important markets and large and important patient populations that are currently really very much underserved in terms of access to Ablation technology.

AGENT.

Thanks, Joanne.

Thank you. The next question comes from Larry Biegelsen with Wells Fargo. Please go ahead.

Good morning. Thanks for taking the questions. Congrats on a strong finish here and the approval of FARAPULSE in the US. On FARAPULSE, can you talk about the manufacturing capacity for the catheter and console upon launch? And expectations for the EP business this year? You know you grew 43% in Q4'23. Any reason why growth would be lower in '24? And I have to ask you to please clarify your comments around ACURATE Neo2. It sounds like something happened with Prime, which is the larger size. What are the implications for the other sizes of Neo2 in Europe and the US? Thank you.

Thanks, Larry. Starting with FARAPULSE, really very proud of the global supply chain team and what they've done over the past 18 months in the FARAPULSE Group that we originally acquired a while ago. But they've done a tremendous job in building capabilities to supply this for the US launch and to expand in Europe, and eventually Asia, as we just highlighted. So we are now significantly improved our catheter and console supply. We opened numerous centers in Europe in the fourth quarter and we're ready to go. So we, at this point, don't anticipate supply being an issue to continue to support Europe or to facilitate the US launch, given the capabilities and investments that we've made in approvals to manufacture in multiple locations. So great work by the supply chain team. And we're ready to launch this in the US. On ACURATE Neo2, as I mentioned in the earnings script, maybe just two overall points. We continue to do very well with ACURATE Neo2 in Europe, implanting, I think, the number 70,000, and continuing to grow faster than the market in Europe. And we are on track for what we have called Prime in Europe in 2025. So that continues to move forward as planned. With respect to the trial, as I mentioned in the script, based on the interim analysis, we now need to wait for the full one year follow up of the 1,500 patients. And as a result of that, we will not be receiving approval for ACURATE Neo2 in 2024. And we will wait until likely near the end of 2024 for the full readout of the ACURATE IDE study to determine our path forward.

Thank you, and congrats, Lauren.

Thanks, Larry.

The next question comes from Vijay Kumar with Evercore ISI. Please go ahead.

Hey, everyone. I appreciate you taking my question and congratulations on a very strong finish. I have a question regarding guidance, possibly for Dan. The 8% to 9% guidance seems to indicate that FARAPULSE, which was previously projected, is coming in a bit ahead, likely due to a later launch. Could you clarify the 8% to 9% figure? Have the assumptions for FARAPULSE changed? Should we be aware of any impacts from VBP or base factors? Also, what pricing assumptions are you making for fiscal '24? Thank you.

Sure. So the VBP assumptions are the same as they've always been, really no change there. As you saw, in December, when we issued the press release on AVANT GUARD, we moved up the timing of expected FARAPULSE launch to Q1. So we've been anticipating Q1 launch. And that 8% to 9% full year and the 7% to 9% for the first quarter in terms of revenue growth contemplated a Q1 approval of FARAPULSE, as Mike said, you know, there's probably some contribution in Q1, but more of that contribution comes in Q2 to Q4. So the 8% to 9% has that contemplated in the overall guide. And then pricing, so I would say on pricing is, we were basically flat in 2023 and the goal is to be flat again in 2024. So likely no impact would be the goal in 2024 versus 2023.

Fantastic. Sorry, on days, Dan? Any days impact here?

No, there’s a lot of noise throughout the year regarding days around the world. This is all taken into account in the guidance, which is projected to be between 8% and 9% for the full year.

Fantastic. Thank you, guys.

Sure, Vijay. Thanks.

The next question comes from Danielle Antalffy with UBS. Please go ahead.

Hey, good morning, everyone. Thanks so much for taking the question. Just a follow-up question on ACURATE Neo2, Mike, if I could. So appreciate the comments that you did provide. Just curious, I mean, obviously, you're giving pretty strong guidance here for 2024. I mean, is the right read here that regardless of what happens with ACURATE Neo2 and timing there, you're sticking to your long-term sales growth guidance that you provided back in September. And sort of how do we think about this as a long-term growth contributor now, given this little wrinkle here? And Lauren, we will miss you very much. Thanks so much.

Lauren is not leaving the company. She will be around. She'll be around. We're still going to see her. Okay, well. We'll work our way in, right, once in a while. So we're excited for John to come in and Lauren to move out. No, excited for Lauren to go to Urology. Yes. So to answer your question, we are fully committed to the 8% to 10% organic growth CAGR over the '24 to '26 period that we provided in Investor Day. Absolutely no change in that outlook. And pleased with the '23 performance, as you know, where we grew 12%. So absolutely no change to those financial goals. You know, ACURATE continues to do well in Europe. It's a product that's used every day by many European physicians and we're excited about getting the larger size approved there. We are disappointed that we didn't get ACURATE over the goal line for approval in 2024. So at this point, we need to wait until the full data sets been followed up for a year and read out likely before the end of this year in 2024. And we'll take it from there in terms of the US launch. But we are disappointed we're not going to launch that really very end of this year and into next, but absolutely no change to our financial guidance that we gave at Investor Day.

Okay. Great. And also welcome, Jon. Sorry, I didn't mean to leave you out. Thanks so much guys.

Thanks, Danielle.

The next question comes from Travis Steed with Bank of America. Please go ahead.

Hey, thanks for taking the question. Maybe one more follow-up on TAVR. Can you just remind us what the interim look was? Was that just like a six-month look at the data? Now you need to wait for one-year data for the line to separate. And curious if you think what you saw in the interim look. Are you still pretty confident that at one year? We could have a US TAVR launch? Or does this put the whole US TAVR launch at risk?

Janar, Are you able to hear us okay?

Yes, I can hear you loud and clear.

Great. Dr. Sathananthan is our Chief Medical Officer, as you know, for ICT and Structural Heart. Maybe he could comment a bit.

Yeah. I'll take the comment just about the data. So essentially what happened in the trial was that as part of a planned interim analysis, we made the decision to await the full one-year data. It is important just to note that the accurate IDE study is still an active clinical study with active clinical follow-up. And so as a result, we cannot disclose any data related to the trial at this time. We will expect, as Mike said, a readout of the study in the second half of 2024, following a full data review.

Great. Thank you.

The next question comes from Josh Jennings with TD Cowen. Please go ahead.

Good morning. Thanks for taking the questions and congratulations for a strong end of the year. Wanted to ask about the international cardiac ablation market. Boston, incredible fourth quarter, 40% plus growth. Some of your competitors delivered really strong international growth in their electrophysiology businesses as well. What's going on in the international market? I mean, are we seeing the promise of PFA driving market expansion this early? Or is there any pricing dynamics going on? But I think it's 20% almost market growth in internationally for cardiac ablation this year. Just wanted to get some details there and whether that could translate to PFA launches in the United States, driving market expansion, which I think you guys detailed in your Investor Day. Thanks for taking the question.

Dr. Stein, do you want to take a shot on it?

Yes, Josh, and thanks, Mike. I think it's a couple of factors here, and I don't know that I can parse out for you, you know, how much is getting contributed from each. But again, I think we just begin with the fact, right, that atrial fibrillation is an incredibly common arrhythmia. Again, as I said earlier, it is literally pandemic worldwide. I know, for instance, in the US, right, a quarter of adults over the age of 40 will experience Afib at some point in our lives. And ablation, even with legacy thermal technologies, things for us, like stable point or POLARx is incredibly effective. It's more effective than drugs. But on a global scale, it is still really incredibly underpenetrated as a market. And much of the growth that you see, really just reflects, I think, you know, increasing realization in the cardiology community, the referring physician community, about the relative efficacy and safety of all ablation technologies. And then you layer on top of that the promise and the data of FARAPULSE, right? And FARAPULSE, again, it takes a procedure that's already effective. It is at least as effective. It is clearly safer. And it's also much more efficient than thermal ablation. And so that, right, enables docs and medical centers to scale this out much better, right, and start to get into this underpenetrated population. So maybe a long-winded answer, but the short answer is, right, it's both a dramatically underpenetrated population to begin with, and then on top of that, you have the accelerated impact of FARAPULSE.

Appreciate it. Thank you.

The next question comes from Richard Newitter with Truist Securities. Please go ahead.

Hi. Thanks for taking the questions and congrats on a really strong finish to the year.

Thanks.

My first question is just going back to TAVR. You know, at your Analyst Day, you had talked to, you know, an expectation and a level of confidence that you could disrupt that market in the US relatively quickly out of the gate. I'm just curious with, you know, and get something approaching 20% share of the market over time, which is what you've done, you know, in other markets with your disruption capabilities. I'm just curious, does anything change there with the indeterminate kind of view of what the next steps are for the US? I'm just trying to focus on that commentary a bit. You know, does your outlook for the franchise in the US change in TAVR? And then I have a follow-up.

We have a few clarifying points to make. In Europe, we have successfully placed 70,000 valves, and physicians are using them regularly. Our growth in Europe continues to outpace the market, and we've maintained this momentum for about 10 quarters. We're optimistic about the approval of the large valve size in Europe, expected in 2025. In the US, I want to clarify that we have never set a market share goal for TAVR, so we have not claimed a 20% market share. Based on our European results, we remain confident that ACURATE can drive significant growth in the US, as we mentioned during Investor Day. However, we are disappointed that the product launch will not occur in 2024. As we discussed, we need to wait for the complete one-year data on 1,500 patients, and then we will collaborate with the FDA for submission and aim for a data update by the end of 2024. The trial is still ongoing, and we don't anticipate this news to change our forecast of 8% to 10% organic growth over the next three years. We're coming off a 12% growth rate and continue to perform better than most peers and increase EPS more rapidly than our competitors. We remain committed to our financial targets and are hopeful that ACURATE will remain a significant growth contributor, with much depending on the data readout in the fourth quarter of 2024.

Okay. Thanks for that. And then maybe just on M&A, you know, you've been active in 2023 and congrats on Relievant and more recently Axonics early this year. I'm just curious on kind of how we should think about, you know, how aggressive and opportunistic you'll be over the next twelve months. You mentioned, obviously your first priority remains deploying capital for tuck-ins. You know, but do we kind of think of you guys in a little bit of a digestion period or kind of steady she goes just as aggressive and opportunistic as you have been in the past?

I can address that. As you noted, we're very pleased with our most recent deal involving Axonics. This represents a classic tuck-in for Boston Scientific, and historically, we have performed well with these types of acquisitions. We're thrilled to have completed this deal and to welcome the Axonics team into the BSE family. We have maintained a strong track record over a long period, and tuck-in M&A remains our top priority for capital allocation. We plan to remain active in this area. In terms of our activity in the near to medium term, this isn't a situation requiring a significant deleveraging; rather, we will take on some additional debt temporarily. We expect that within a reasonable time frame, we will revert to our current leverage goals. I anticipate that we will continue to be active in the tuck-in M&A space in 2024 and beyond.

Okay. Again, congrats on an outstanding 4Q.

Thank you.

Thank you.

The next question comes from Patrick Wood with Morgan Stanley. Please go ahead.

Amazing. Thank you for taking the question and congrats, Lauren. I'd like to stick with Axonics, if that's all right. I appreciate it hasn't closed yet. But I'm just kind of curious, you know, Urology in Boston has a very sizable distribution network across, I guess, primarily Stone Management, but a whole bunch of different areas. How are you thinking about, you know, the ability to drive adoption in OAB faster and like really push that asset? I'm guessing, you know, having just played with the numbers, and correct me if I'm wrong, but there's some assumption of slightly faster growth once you've acquired Axonics and the Street previously had in there. At least that's where I end up with the numbers. Feel free to correct me. But how are you thinking about the commercialization really pushing that through the distribution network? Thanks.

We have not finalized the acquisition yet, but we are optimistic about closing it in the first half of this year. The Axonics team has done an exceptional job with their platform since the company's inception, capturing a significant share in a market that is experiencing strong double-digit growth. The Axonics team has excelled in several areas, including their core technology, clinical data, and commercial execution, as well as expanding their market through direct-to-patient marketing and awareness initiatives. This represents a substantial global opportunity, and patient awareness of this treatment is still in the early stages. This is one of the reasons for our acquisition—we see the momentum they have, their technology, and the long-term market potential based on the global opportunity. Currently, the market is predominantly focused in the US, and we will assess whether it makes sense to introduce this product to select international markets based on the data we gather. Our Urology business has a strong commercial channel through various business units, making this acquisition a perfect strategic fit for us. We do not have any competing products in this area, so it's a valuable addition that enhances our ability to serve Urology customers comprehensively. Our goal is to elevate Axonics to new heights, and the team has performed exceptionally well so far.

Amazing. Thanks for taking the question.

Sure.

And just to verify, do we have time for one more question?

Yes. One last question, please.

Okay. That question will come from Michael Polark with Wolfe Research. Please go ahead.

Good morning. Thanks for sneaking me in. I'll ask a gross margin question. Dan, I heard in the script for '24 flat to maybe slightly down year-on-year in the guide. The world seems to be calmer on price cost, but as we all know, the Middle East is flaring. And so, I'm curious, one, have you built in any cushion for kind of cost-push from those events? And two, in real-time, are you seeing any impact in the field? And if so, what does that look like?

I can provide both a concise and a more detailed response. The brief answer is that we've considered all factors. Our team is well-informed about our global supply chain network. The guidance we provided reflects our current understanding and the feedback we’ve received, indicating that the impact is minimal on gross margin. For a more detailed answer, in 2023, our results aligned closely with our expectations, achieving 70.7%. As mentioned during our Investor Day in September, we anticipated challenges in meeting our margin expansion goals for 2024. It looks like we will be at or slightly below the 70.7% we reported last year, which is acceptable since we have a strong history of managing various components of the P&L to achieve margin growth, highlighted by the 70 basis points improvement last year. Looking ahead to 2024, I would emphasize two headwinds and two tailwinds that might influence our margins, likely landing us at or slightly below the previous year’s rate. One of the tailwinds is inflation, which appears to be improving on a macro level. However, we had already signed contracts for many materials for 2024 last year, limiting the immediate benefits; we anticipate greater advantages in 2025 and 2026, both in terms of macro inflation and gross margin overall. As for product mix, receiving FARAPULSE approval is a significant positive for our company, and many of our upcoming launches are also promising. On the headwind side, foreign exchange remains a challenge we faced in 2023 and will continue into 2024. While it's a good problem to have, we need to invest in manufacturing capacity to support our sales growth—12% growth last year and an expected 8% to 9% this year. We are fully committed to achieving 150 basis points improvement over the next three years. Gross margin may not significantly impact our finances in 2024, but it should improve in 2025 and 2026. It’s worth noting that we used to operate above 72% gross margin in 2019. We are dedicated to reaching that level again and aiming to boost overall operating margin to about 28% by 2026, bringing our long-term goal of 30% within reach.

Thank you.

Thank you.

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