Earnings Call Transcript - BSX Q2 2024

Operator, Operator

Good morning, and welcome to the Boston Scientific Second Quarter 2024 Earnings Call. All participants will be in listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Jon Monson, Senior Vice President, Investor Relations. Please go ahead.

Jon Monson, Senior Vice President, Investor Relations

Thank you, Drew, and 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 Q2 results, which included reconciliations of the non-GAAP measures used in this release. We have posted a link to 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 and Filings. The duration of this morning's call will be approximately one hour. Mike and Dan will provide comments on Q2 performance as well as the outlook for our business, including Q3 and full year 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 the call, operational revenue excludes the impact of foreign currency fluctuations, and organic revenue 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 the majority stake investment in Acotec Scientific Holdings Limited and the acquisitions of Apollo Endosurgery and Relievant Medsystems, which closed in February, April and November 2023 respectively, as well as our acquisition of the Endoluminal Vacuum Therapy portfolio from B. Braun, which closed in March 2024. Divestitures include the Endoscopy, Pathology business, which closed in April 2023. Guidance excludes the previously-announced agreement to acquire Axonics and Silk Road Medical both of which are expected to close in the second half of 2024, subject to customary closing conditions. For more information, please refer to the Q2 Financial and Operational Highlights deck, which may be found on the Investor Relations section of our 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 Law, 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 and market share, new and anticipated product approvals and launches, acquisitions, clinical trials, cost savings and growth opportunities, our cash flow and expected use of cash, 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 except as required by law. At this point, I'll turn over to Mike. Mike?

Michael F. Mahoney, Chairman and Chief Executive Officer

Thanks, Jon and thank you everyone for joining us today. Our second quarter results exceeded our expectations, led by the strength of our differentiated global cardiovascular portfolio, particularly the execution in AF Solutions and the winning spirit of our global team. In the second quarter, total company operational sales grew 16%, organic sales grew 15%, exceeding the high end of our guidance range of 10 to 12. Our top tier growth continues to be fueled by innovation, clinical evidence generation, and our strategy of category leadership. Consistent with prior quarters, most of our businesses and regions grew well above market. Second quarter adjusted EPS of $0.62 grew 15% versus 2023, exceeding the high end of our guidance range of $0.57 to $0.59. Second quarter adjusted operating margin was 27.2% and as a result of our first half margin performance and revenue upside versus previous expectations, we now expect to expand adjusted operating margin 50 to 70 basis points for the full year. Turning to the third quarter and full year 2024 outlook, we're guiding to organic growth of 13% to 15% for third quarter and raising our full year guidance from 10% to 12% to 13% to 14%, reflecting momentum across our broad portfolio, particularly in our EP business unit. Our third quarter adjusted EPS guidance is $0.57 to $0.59 and we expect our full year adjusted EPS to be $2.38 to $2.42, representing growth of 16% to 18%. Dan will provide more details on our financials and I'll provide some additional color on the quarter and the outlook for the second half of 2024. Regionally and on an operational basis, the U.S. grew 17% in second quarter with exceptional growth in EP, fueled by the continuous success of the FARAPULSE launch, as well as Watchman, coronary imaging, and strengthening our med-surg businesses. Europe grew 16% on an operational basis versus second quarter 2023. This impressive performance was driven by double-digit growth in seven of our eight business units, led by robust growth in EP and strength across our growth and emerging markets. The second quarter was also a record quarter in the region for our structural heart business, following positive data presented on ACURATE Neo2 at the recent Euro PCR Conference. We expect this momentum to continue, supported by the launch of the largest size ACURATE prime valve in late 2024. Asia-Pac grew 13% operationally versus a difficult comp in second quarter 2023, with excellent performance in China, growing high teens, and Japan growing double digits. We also recently received approval in China for FARAPULSE and AGENT Drug-Coated Balloon, and continue to expect approval for FARAPULSE in Japan in the second half of this year. We expect the contribution from these launches will ramp over 2025. Within the quarter, pricing actions in key geographies went into effect with a China VBP on coronary imaging, and Japan reimbursement cuts in June. We do expect Asia-Pac to grow low double digits in the second half of the year, including the full impact of these pricing actions. Some additional commentary on the business units. Our urology business grew 9% organically in the quarter with double-digit growth in stone management and prosthetic urology, supported by our direct-to-patient efforts, driving patient awareness, and early contribution from the limited market release of the Tenacio Pump. International growth of 14% was driven by laser therapies and Rezum. We look forward to closing this previously announced acquisition of Axonics, which we are continuing to expect in the second half of this year. Endoscopy sales grew 8% both operationally and organically in second quarter. Second quarter results were driven by above market growth in our Biliary franchise, led by high teens growth in AXIOS, and the high teens growth in our Endoluminal Surgery franchise. We continue to expect Endo sales to go faster than the market throughout 2024, enabled by our innovative portfolio. Neuromodulation sales grew 16% operationally and 4% organically in the quarter. Our Brain franchise grew low single digits with some impact from competitive product launches. We expect this business to strengthen in the second half of the year, driven by our portfolio of differentiated technologies. In the second quarter, our pain franchise grew strong double digits operationally and mid single digits on an organic basis. Our spinal cord stem business saw improved U.S. trialing cadence in the quarter and we expect that our U.S. SCS franchise will improve in the second half of the year. The relieving business continues to perform extremely well with more than 30,000 patients treated with the Intracept System to date. Peripheral Intervention sales grew 12% operationally and 9% organically versus second quarter. High single digit growth in Arterial was driven by continued momentum in our drug-eluting portfolio, with double-digit growth in the quarter. Mid single digit growth in Venous was driven by momentum of EKOS supported by the real PE data set and continued double digit growth in Varithena. Our Interventional Oncology franchise grew double digits in second quarter, driven by our broad offering across embolization and cancer therapies. Looking forward, we continue to expect to close the previously announced acquisition of Silk Road Medical in the second half of this year. Cardiology delivered another excellent quarter with organic sales growing 22% versus second quarter 2023. Within cardiology, interventional cardiology therapy sales grew 9%. Growth in coronary therapies was driven by continued strength in our global imaging franchise and APAC calcium franchise. Within the quarter we initiated a limited launch of AGENT DCB in the U.S., which has received positive initial physician feedback. Our structural heart valves franchise grew strong double digits in the second quarter, led by ACURATE Neo2, which continues to see growth from both new and existing accounts in Europe and Latin America. At the end of the quarter, we also completed follow-up of the full 1,500 patient cohort and the U.S. ACURATE IDE trial. We now expect to present this data in the first half of 2025, likely at the Annual ACC Meeting. Watchman had another excellent quarter growing 20% organically with strong contribution from the ongoing launch of Watchman FLX Pro in the U.S. and Japan. The U.S. grew 20% led by further penetration into the existing indicated patient population enabled by our innovation, clinical evidence, and patient awareness efforts. Cardiac Rhythm Management sales grew 3% organically in the quarter. In the second quarter, our Diagnostics franchise grew double digits. This above-market growth was driven by our broad cardiac diagnostics portfolio. In Core CRM, our high and low voltage business grew low single digits with strong international growth partially offset by slightly below market growth in the U.S. At the recent HRS Meeting, data was presented from the MODULAR ATP Trial of the MODULAR CRM System, which is comprised of the EMPOWER Leadless Pacemaker and EMBLEM SICD, which met all pre-specified six-month endpoints and a high rate of ATP success with no patient requests for deactivation of pacing due to pain or discomfort. Turning to EP, EP sales grew an impressive 125% organically versus second quarter 2023, driven by the rapid and sustained adoption of the transformative FARAPULSE PFA System. Second quarter sales were driven by outstanding commercial execution, robust supply, and positive real-world outcomes, as well as increased AF ablation volumes, supported by the efficiency of the FARAPULSE workflow. Our Baylis Access Solutions business also continues to see strong double-digit growth in the U.S. with utilization in approximately 80% of PFA procedures and approximately 85% of Watchman procedures. Internationally, we saw continued FARAPULSE account openings and robust utilization in Europe and launched APAC markets. Importantly, evidence of more than 20,000 patients treated with FARAPULSE has been published or presented at medical conferences, demonstrating the safety, efficacy, and reproducibility of the system. And within the quarter, we completed an enrollment in the NAVIGATE-PF study of the FARAVIEW software module and FARAWAVE Nav-enabled catheter, both of which are expected to launch in the U.S. during the second half of the year. At the recent HRS meeting, outcomes from a sub-analysis of the ADVENT trial were presented. This is the very first randomized data for a PFA system demonstrating superior efficacy versus thermal modalities, with significantly more patients having achieved an arterial arrhythmic burden of less than 0.1% with FARAPULSE compared to RF and Cryo. We plan to continue a steady cadence of clinical evidence generation to maintain our PFA leadership, including Rematch-AF, a planned trial designed to study the FARAPOINT and FARAWAVE catheter in patients who need a redo ablation, which we expect to begin enrolling early in 2025. In closing, I'm very grateful to our global team for the commitment and winning spirit, enabling us to deliver life-changing technologies to millions of patients. We're in the most exciting chapters as a company with a track record of executing or exceeding our financial goals while delivering meaningful innovation. With that, I'll hand it over to Dan.

Daniel J. Brennan, Executive Vice President and Chief Financial Officer

Thanks, Mike. Second quarter 2024 consolidated revenue of $4.120 billion represents 14.5% reported growth versus second quarter 2023 and includes a 160 basis point headwind from foreign exchange, which was slightly unfavorable versus our expectations. Excluding this $57 million foreign exchange headwind, operational revenue growth was 16.1% in the quarter. The sales impact from closed acquisitions was 140 basis points, resulting in 14.7% organic revenue growth, exceeding our second quarter guidance range of 10% to 12%. Q2 2024 adjusted earnings per share of $0.62 grew 15.4% versus 2023, exceeding the high end of our guidance range of $0.57 to $0.59, primarily driven by our strong sales performance. Adjusted gross margin for the second quarter was 70.4%, contracting 160 basis points versus the prior year period, driven by higher than expected inventory charges related to the POLARx cryoablation system, given the strong commercial adoption of FARAPULSE in the U.S., as well as increased levels of capital placements in the quarter. We continue to expect second half adjusted gross margin to be higher than the first half, driven by the mixed benefit from key product launches and full recognition of our annual standard cost improvements. We expect full-year adjusted gross margin to be slightly below our 2023 rate. Second quarter adjusted operating margin was 27.2%, which expanded 40 basis points versus the prior year period. Given our strong first half operating margin and our expectations for the second half, we are raising our full-year 2024 adjusted operating margin expansion goal to 50 to 70 basis points from 30 to 50 basis points compared to 2023. We believe this strikes a nice balance of delivering incremental margin from our sales upside and continuing to invest appropriately to drive strong top line performance. On a GAAP basis, second quarter operating margin was 12.6%, which included intangible asset impairment charges related to the acquisitions of Cryterion Medical and Devoro Medical. The Cryterion impairment charges were related to the high conversion rates of cryoablation to FARAPULSE for ablation procedures in the U.S. The Devoro impairment charges were related to the decision to discontinue work advancing the Wolf thrombectomy platform. Moving to below the line, second quarter adjusted interest and other expenses totaled $68 million, which was favorable to our expectations. On an adjusted basis, our tax rate for the second quarter was 13.1%, which includes favorable discrete tax items. Our operational tax rate for the quarter was 13.6%. Fully diluted weighted average shares outstanding ended at 1.484 billion shares in the second quarter. Free cash flow for the second quarter was $660 million with $814 million from operating activities, less $155 million in net capital expenditures, which includes payments of $200 million related to acquisitions, restructuring, litigation, and other special items. In 2024, we continue to expect full-year free cash flow to exceed $2 billion, which includes approximately $700 million of expected payments related to special items. As of June 30, 2024 we had cash on hand of $2.9 billion and our gross debt leverage ratio was 2.4 times. Our top capital allocation priority remains strategic tuck-in M&A, followed by annual share repurchases to offset dilution from employee stock grants. In alignment with our acquisition strategy, in Q2 we announced our agreement to acquire Silk Road Medical and closed the acquisition of SoundCath, a pre-revenue, privately held medical technology company developing an intracardiac echocardiography product complementing our existing electrophysiology portfolio. Our legal reserve was $251 million as of June 30th, a decrease of $32 million versus Q1 2024. $54 million of this reserve is already funded through our qualified settlement funds. I will now walk through guidance for Q3 and full year 2024. We expect full year 2024 reported revenue growth to be in a range of 13.5% to 14.5% versus 2023. Excluding an approximate 100 basis point headwind from foreign exchange based on current rates, we expect full year 2024 operational revenue growth to be 14.5% to 15.5%. Excluding a 150 basis point contribution from closed acquisitions, we expect full year 2024 organic revenue growth to be in a range of 13% to 14% versus 2023. We expect third quarter 2024 reported revenue growth to be in a range of 13% to 15% versus third quarter 2023. Excluding an approximate 100 basis point headwind from foreign exchange based on current rates, we expect third quarter 2024 operational revenue growth to be 14% to 16%. Excluding a 100 basis point contribution from closed acquisitions, we expect third quarter 2024 organic revenue growth to be in a range of 13% to 15% versus 2023. We now expect full year 2024 adjusted below the line expenses to be approximately $300 million. Given discrete items recognized in the first half of 2024, we now expect a full year 2024 operational tax rate of approximately 13.5% and an adjusted tax rate of approximately 12.5%, which contemplates current legislation, including enacted laws and issued guidance under OECD pillar two rules. We expect full year adjusted earnings per share to be in a range of $2.38 to $2.42, representing growth of 16% to 18% versus 2023, including an approximate $0.04 headwind from foreign exchange, which is unchanged from our previous expectations. We expect third quarter adjusted earnings per share to be in a range of $0.57 to $0.59. For more information, please check our investor relations website for Q2 2024 financial and operational highlights, which outlines more details on Q2 results and 2024 guidance. And with that, I'll turn it back to Jon, who will moderate the Q&A.

Jon Monson, Senior Vice President, Investor Relations

Thanks, Dan. Drew, let's open it up for questions for the next 40 minutes or so. In order for us to take as many questions as possible, please limit yourself to one question. Drew, please go ahead.

Operator, Operator

The first question comes from Robbie Marcus with J.P. Morgan. Please proceed.

Robert Marcus, Analyst

Oh, thank you and congratulations on another fantastic quarter here.

Michael F. Mahoney, Chairman and Chief Executive Officer

Thanks, Robbie.

Daniel J. Brennan, Executive Vice President and Chief Financial Officer

Thanks, Robbie.

Robert Marcus, Analyst

With my one question, I want to ask about guidance and the sustainability. This was a big quarter. You had a big first quarter. PFA is clearly outperforming. Watchman had a great quarter. A lot of the rest of the business continues to fire on all cylinders. So I'm seeing about 14% organic for the back half of the year, which is a really healthy rate. And I guess really the question is, how do you feel about continuing through 2024 and into 2025? Is this a pull forward of the revenues expected in the long-range plan, or do you think there's better demand, better market adoption, better volumes underlying pricing that could keep maybe not 14%, but something elevated for the foreseeable future? Thanks.

Michael F. Mahoney, Chairman and Chief Executive Officer

Sure, Rob. I'll take a shot at it. We're not going to give 2025 guidance here, but at our Investor Day, we said our goal was to be the highest performing med tech company in terms of sales and EPS growth, which we believe we achieved in 2023. Our aim is to do that in 2024, and our aim is to do that for many years to come. One of the primary drivers of this has been our decade-long portfolio shift into faster-growth markets for the company, where the weighted average market growth rate is probably closer to 7% to 8% versus what it used to be, which was around flat. We enjoy this advantage because of our portfolio choices in faster-growing markets. Secondly, we have strong growth across the world. You're seeing Europe double digits, Asia Pac double digits where FARAPULSE is not yet launched, and obviously, the U.S. doing quite well as well. Then there's the durability of our other businesses. We'll likely talk about FARAPULSE and WATCHMAN a lot on the call, but you see continued strong growth, 8% to 9% in our MedSurg businesses during the first half. Although, that strength may be diminished by the performance of some other areas, it's still pretty good. Furthermore, our cardiovascular portfolio is just getting stronger and stronger. With our EP franchise, Baylis, and our advancements with coronary with Drug-Coated Balloon. We saw results with ACURATE in Europe and potentially benefit from concomitant reimbursement in the future. Who knows, maybe these procedures may move over time to an ASC center and EP, which we believe would benefit Boston Scientific based on our solutions. So we had a tough comp in 2023 with a 12% growth. Our updated guidance for the full year is now 13% to 14%. While we won't give 2025 guidance today, our goal is to truly distinguish ourselves from the peer group regarding revenue growth and EPS, and we have the portfolio and the team to achieve it.

Robert Marcus, Analyst

Appreciate the thoughts, thanks.

Operator, Operator

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

Joanne Wuensch, Analyst

Thank you for the question and I appreciate the great quarter. Can we dive a bit deeper into the future outlook? I know this might not be your favorite question, but it's one I often hear—what's coming next, and how should we view the ongoing rollout of FARAPULSE and Watchman in terms of sustaining our growth? Thank you.

Michael F. Mahoney, Chairman and Chief Executive Officer

Yes. I think it's similar to some of the themes I just highlighted. We're in higher weighted average market growth rate markets to start. We see consistent procedure volume around the world. We are in a pricing environment where we used to be a price giver, which was significantly higher. Now, it's getting closer to neutral pricing. We also expect margin improvements. We took our margin goals up for the year. We expect gross margin to improve over time. Currently, we're getting more margin benefit from SG&A efficiencies, which is good leverage. We expect to get more gross margin upside moving forward. We have a strong product cadence in very fast-growing markets. Two of the best markets in all of MedTech, obviously, are our EP and WATCHMAN, and we have a strong leadership position in PFA, which is only growing. We are going to launch that in Asia, and we have a lot of clinical work ongoing with WATCHMAN to significantly increase the Total Addressable Market (TAM) where it could rival the TAVI market in three to five years. The clinical evidence we have in fast-growing markets combined with our differentiated portfolio and strategic M&A efforts, with Axonics and Silk, to leverage our venture portfolio, demonstrates our commitment to superior execution.

Joanne Wuensch, Analyst

Thank you very much.

Operator, Operator

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

Lawrence Biegelsen, Analyst

Hi, good morning. Thanks for taking the questions, and congrats on a really nice quarter here. Mike, maybe just to drill down on EP and FARAPULSE. I guess it's a similar question, but just the sustainability here of the growth and the share. By our math, it looks like you've captured about 15% of the U.S. EP market in the second quarter, excluding Baylis. Help us understand how durable your EP share and growth is. Can EP continue to be a growth driver for Boston Scientific for years to come, and what's driving your confidence that you can compete effectively with Athera and VeraPulse when they launch? Thank you.

Michael F. Mahoney, Chairman and Chief Executive Officer

So I'll start, and then Dr. Stein can comment on how we're leading the field in clinical evidence and physician sentiment. We're competing with those companies today in Europe along with J&J and all the companies that have PFA platforms. You've heard us discuss the differentiation of FARAPULSE in terms of its safety profile, clinical data, and the growing usage of physicians who previously did not consider using Boston Scientific EP. Many of them have fully converted to using FARAPULSE for their A-fibrillation procedures. However, it's still relatively early in our U.S. launch, being less than six months since introduction, and we have yet to launch in China and Japan. We also have a lot more to do in Europe, and additional indications are forthcoming. Therefore, we believe the FARAPULSE platform, combined with Baylis and our clinical data, will be a differentiated growth driver for Boston for many years to come. Will it maintain the current growth rate of over 100% a quarter? Unlikely, but we expect it to evolve into one of the biggest businesses for Boston Scientific in the years to come.

Kenneth Stein, Chief Medical Officer

And Larry, to add on to Mike's comments, AF is the most common sustained arrhythmia worldwide. Ablation therapy for AF is still dramatically underpenetrated, with high single-digit penetration for persistent afib and low double-digit penetration for paroxysmal afib. The safety, efficacy, and efficiency advantages of the FARAPULSE system will only continue to expand the size of that market. In terms of competition, we expect competitors to bring their first-generation products late this year or early next year; they’re already approved in Europe. However, as Mike mentioned, we have not seen any significant impact on the rapid sustained adoption of FARAPULSE in Europe. FARAPULSE is a transformative technology with essential differentiated advantages against these competitors. As Mike mentioned, we have treated over 70,000 patients to date, with published clinical trial data on over 20,000 patients, which further confirms the safety, simplicity, and efficiency of the system. Additionally, outcomes from a sub-analysis of the ADVENT trial were recently presented, highlighting FARAPULSE's superiority in efficacy over traditional modalities.

Lawrence Biegelsen, Analyst

Thank you.

Operator, Operator

The next question comes from Rick Wise with Stifel. Please go ahead.

Frederick Wise, Analyst

Hi, there, can you hear me?

Jon Monson, Senior Vice President, Investor Relations

Yes, we can hear you now.

Frederick Wise, Analyst

Great, sorry about that. I was hoping also to talk about PFA from another perspective. In my recent doctor checks, I've heard considerable encouraging interest in RHYTHMIA. Obviously, in many cases that are being mapped now with other companies' systems. Just maybe give us some more color on when you launch your mapping integrated catheter in the second half; I assume that's still the target. How do we think about the implications for RHYTHMIA adoption for the percentage of cases that could be mapped on the RHYTHMIA system and the impact on your growth outlook as a result? Thank you.

Kenneth Stein, Chief Medical Officer

Yes. Thanks, Rick. I appreciate the question. Again, we still are projecting approval of both our NAV-enabled FARAWAVE catheter and a completely new software suite on RHYTHMIA that we're calling FARAVIEW to help support that. We expect that to help drive more adoption of RHYTHMIA and FARAVIEW to accompany FARAWAVE. However, it's important to emphasize that FARAPULSE will remain an open system. We want to support workflows that do not require any use of mapping or navigation, as well as workflows involving competitive systems. But we do expect, with FARAVIEW and FARAWAVE NAV, to provide significant workflow advantages. Existing mapping and navigation systems do not understand PFA at all; they were built around the RF ablation paradigm. FARAVIEW will be the first mapping and software system that fundamentally understands the mechanics of PFA and FARAPULSE. Important features include dynamic visualization of the catheter as it changes shape and field tagging specific to PFA energy. All of this has the potential to minimize fluoroscopy during procedures, minimize catheter exchanges, and continue to facilitate a safer, more effective, and more straightforward procedure compared to what legacy systems offer.

Michael F. Mahoney, Chairman and Chief Executive Officer

On the financial side, mapping is a sizable chunk of the overall EP procedure. When FARAPULSE is utilized, you're seeing increased procedure volume based on efficiency. Some competitors have benefited from that productivity gain related to FARAPULSE. Therefore, in addition to strong utilization rates and opening new centers, we expect a broad impact by 2025, along with a number of physicians adopting this Fairview platform that Ken mentioned, which represents additional revenue not reflected yet in FARAPULSE EP procedures.

Frederick Wise, Analyst

That’s great. Thank you so much.

Operator, Operator

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

Vijay Kumar, Analyst

Hi everyone, thank you for addressing my questions and congratulations on the experience here. I have a question regarding U.S. PFA and its 220% growth. Can you break down what portion of that was capital contribution versus catheter contribution in the U.S. figures? Also, I believe you mentioned a TPT in the outpatient setting in the U.S. Do you have any updates on whether Boston has submitted its TPT? Thank you.

Michael F. Mahoney, Chairman and Chief Executive Officer

Yes. So thanks for the question. Unfortunately, we're not going to break out for you the capital and disposable. Disposable is obviously more sizable than the capital, but that's probably the color we'll provide on that. And on the overall pricing, as you know, the pricing is a bit premium. However, based on the clinical benefits and efficacy and efficiency that physicians and customers are enjoying, that seems to be the proper price point. Regarding TPT, Ken, do you have any comments on that?

Kenneth Stein, Chief Medical Officer

Yes, Vijay. So we have submitted for TPT. Again, it's important to recognize there are some very strict criteria for eligibility for TPT. Overall, we are not seeing pricing as a barrier to the rapid and sustained adoption of FARAPULSE.

Operator, Operator

Next question comes from David Roman with Goldman Sachs. Please go ahead.

David Roman, Analyst

Thank you and good morning. I want to keep going a little bit on the EP side. But also, could you talk a little bit more about both the technology and commercial strategy? As you think about the technology side, right now, the bulk of your business sits in the ablation side. You talked a little bit about the importance of mapping and access. How should we think about the portfolio evolving, and how that unlocks new opportunities for you, whether that's in the non-AF side of the ablation market be it with FARAPOINT or some of the other products? And then on the commercial side, where are the opportunities for pull-through here, for example, are you training your mappers on generator replacements and ICDs? How should we think about the overall benefit to the portfolio?

Michael F. Mahoney, Chairman and Chief Executive Officer

Again, Ken and I will try to tag team this. Thank you for the question. It's one of the best markets in MedTech. It's about a $10 billion market. The chunk that we're doing well in now is the $6 billion AFib market that we continue to strengthen, and we'll get approval, as you know, in Asia in 2025. There are several other areas that we're trying to penetrate, including the mapping segment. We have an organic ICE program, which we hope to compete with the new ICE platform during this LRP period, which represents another large slice of this market. Ken can elaborate on the clinical studies we're conducting to broaden the indications for FARAPULSE beyond its current applications.

Kenneth Stein, Chief Medical Officer

Yes. Thanks, Mike. So David, let me start with the clinical strategy and then talk about the technology side. From a clinical trial perspective, our ADVANTAGE trial aimed to get labeling for FARAPULSE for persistent AF has completed enrollment. We expect to present results late this year or early next year. We are also well underway in a trial called AVANT GUARD, which aims to prove FARAPULSE is an effective first-line therapy for patients with persistent atrial fibrillation. We've announced our intent to run a trial called REMATCH, which will examine FARAPULSE for redo ablations. From a technology standpoint, we've already mentioned the FARAWAVE NAV catheter. Alongside that, we have the FARAPOINT catheter going through its clinical trial, as well as intent on future sophisticated mapping and ablation catheters like FARAFLEX. We aim to leverage this technology for many arrhythmias beyond atrial fibrillation, including atrial tachycardia and ventricular tachycardia. It's important not to overlook the fantastic performance from our Access Solutions portfolio alongside FARAPULSE. In terms of pull-through, there’s an excellent synergy between FARAPULSE and our Access solutions and with WATCHMAN. A key opportunity here is the reimbursement for concomitant FARAPULSE ablation and WATCHMAN procedures, which we anticipate will be a strong growth driver, hopefully finalized by CMS before the year ends.

Michael F. Mahoney, Chairman and Chief Executive Officer

The synergies between our products, particularly between FARAPULSE and WATCHMAN, create a compelling case for efficiency and patient safety. Utilizing both technologies allows for procedures to be completed in a single session, reducing the risks associated with multiple procedures. The workflow for clinicians is streamlined; both require transseptal access into the left atrium, enhancing the efficiency of the procedure overall.

Operator, Operator

And I understand there is time for one last question.

Michael F. Mahoney, Chairman and Chief Executive Officer

Yes, please.

Operator, Operator

Okay. That last question will come from Matt Taylor with Jefferies. Please go ahead.

Matthew Taylor, Analyst

Hi, good morning, guys, thank you for taking the questions. Congrats on a great quarter. I did want to ask a follow-up question on FARAPULSE just to help with thinking about the modeling and the opportunity there. Could you give us any kind of update or parameters on how many centers you're in, how many boxes you've placed, and maybe talk about whether the early experience has changed your views on how the market could evolve like you laid out at the Analyst Day several months ago?

Michael F. Mahoney, Chairman and Chief Executive Officer

Yes, I think the only piece of that we’ll provide is that we don’t want to break out information on catheter usage, capital usage, or how many sites. However, the utilization rates of sites once they start using FARAPULSE are very high and sustainable; we’re not looking at hospitals turning it on and off or fluctuating usage. The sustainability of FARAPULSE adoption is very strong once customers begin using it. Additionally, there’s also a chance to sell more consoles to larger centers in our existing accounts in addition to opening new ones. Thank you.

Jon Monson, Senior Vice President, Investor Relations

Well, thanks, everyone, for joining us today. As always, we appreciate your interest in Boston Scientific. If we were unable to get to your question or have any follow-ups, please don't hesitate to reach out to the Investor Relations team. And before you disconnect, Drew will give you all the pertinent details for the replay. Thanks so much.

Operator, Operator

Thank you. Please note a recording will be available in one hour by dialing either 1-877-344-7529 or 1-412-317-0088, using replay code 2312308 until July 31, 2024, at 11:59 P.M. Eastern Time. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.