Boston Scientific Corp 8-K, filed Nov 18, 2020
Boston Scientific Corp (BSX)
8-K
2020-11-18
For: 2020-11-17
View Original
Added on
April 07, 2026
About this 8-K
Boston Scientific Corp filed this 8-K on November 18, 2020, reporting on events of November 17, 2020.
Items reported
- Item 2.05: Exit or restructuring costs
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_____________________________________________________________________
Date of Report (Date of earliest event reported): November 17, 2020
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||||||||
(Address of principal executive offices) (Zip Code)
(508 ) 683-4000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.05. COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
On November 17, 2020, Boston Scientific Corporation (the “Company”) announced a global, voluntary recall of all unused inventory of its LOTUS Edge™ Aortic Valve System, and its decision to retire the entire LOTUS platform immediately.
The Company estimates the decision will result in total pre-tax charges of approximately $225 million to $300 million, which includes $50 million to $100 million of estimated charges expected to result in future cash outlays. The following table provides a summary of the Company's estimate of costs associated with the product discontinuation, the vast majority of which are expected to be recorded in the fourth quarter of 2020:
| Type of Cost | Total Estimated Amount Expected to be Incurred | ||||
| Working capital: | |||||
| Inventory write-offs and other | $100 million to $150 million | ||||
| Intangible asset impairment charges: | $10 million | ||||
| Restructuring charges: | |||||
| Exit costs (1) | $45 million to $60 million | ||||
| Restructuring-related expenses (2): | $70 million to $80 million | ||||
| $225 million to $300 million | |||||
(1) Comprised of termination benefits, contractual cancellations and certain other exit costs.
(2) Comprised of other costs directly related to the product discontinuation, including fixed asset write-offs and plant decommissioning costs.
ITEM 8.01. OTHER EVENTS.
The Company issued a press release on November 17, 2020, announcing its decision. A copy of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit No. | Description | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K 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," "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 about the impact of the decision, including future financial results, our plans, objectives, expectations and intentions, the expected timing for recording associated charges and other statements that are not historical facts. 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 Current Report on Form 8-K. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.
Factors that may cause such differences include, among other things: future economic, political, competitive, reimbursement and regulatory conditions; new product introductions; demographic trends; intellectual property; litigation; financial market conditions; and future business decisions made by us and our competitors. 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 document.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | November 17, 2020 | BOSTON SCIENTIFIC CORPORATION | ||||||||||||
| By: | /s/ Vance R. Brown | |||||||||||||
| Vance R. Brown | ||||||||||||||
| Vice President and Chief Corporate Counsel | ||||||||||||||
FOR IMMEDIATE RELEASE
Boston Scientific Announces LOTUS Edge ™ Aortic Valve System
Voluntary Recall and Product Discontinuation
MARLBOROUGH, Mass. (November 17, 2020) – Boston Scientific Corporation (NYSE: BSX) has announced it has initiated a global, voluntary recall of all unused inventory of the LOTUS Edge™ Aortic Valve System due to complexities associated with the product delivery system. The voluntary recall is related solely to the delivery system, as the valve continues to achieve positive and clinically effective performance post-implant. There is no safety issue for patients who currently have an implanted LOTUS Edge valve.
Given the additional time and investment required to develop and reintroduce an enhanced delivery system, the company has chosen to retire the entire LOTUS product platform immediately. All related commercial, clinical, research & development and manufacturing activities will also cease.
“While we have been pleased with the benefits the LOTUS Edge valve has provided to patients, we have been increasingly challenged by the intricacies of the delivery system required to allow physicians to fully reposition and recapture the valve,” said Mike Mahoney, chairman and chief executive officer, Boston Scientific. “The complexity of the delivery system, manufacturing challenges, the continued need for further technical enhancements, and current market adoption rates led us to the difficult decision to stop investing in the Lotus Edge platform. We will instead focus our resources and efforts on our ACURATE neo2™ Aortic Valve System, Sentinel™ Cerebral Embolic Protection System and other high growth areas across our portfolio.”
This decision is expected to result in estimated total pre-tax GAAP charges of approximately $225 million to $300 million due to inventory, fixed asset, intangible asset and certain other exit charges and approximately $100 million to $150 million of these charges will impact the company’s adjusted results. The vast majority of these charges will be recorded during the fourth quarter of 2020. The decision is expected to be accretive to GAAP and adjusted earnings per share in 2021 by approximately one to two cents and neutral thereafter.
Conference Call and Webcast Information
Boston Scientific will be hosting a conference call for investors on November 17, 2020 at 8:00 a.m. EST to discuss the announcement. To participate in the conference call, please dial (833) 685-0550 or (412) 317-5733. The live webcast and archived replay of this call will be available at our Investor Relations website investors.bostonscientific.com in the Events section.
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 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,” “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 business plans, financial performance, product launches and product performance and impact. 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.
Factors that may cause such differences include, among other things: future economic, competitive, reimbursement and regulatory conditions; new product introductions; demographic trends; intellectual property; litigation; financial market conditions; and future business decisions made by us and our competitors. 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 document.
CONTACTS:
Trish Backes
Media Relations
651-582-5887
Trish.Backes@bsci.com
Susie Lisa, CFA
Investor Relations
(508) 683-5565
BSXInvestorRelations@bsci.com