JP Morgan Conference. Jim Tobin Chief Executive Officer January 14, 2009

Transcription

1 JP Morgan Conference Jim Tobin Chief Executive Officer January 14, 2009

2 Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 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. 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 actual results to differ materially from those contemplated by the statements in this presentation can be found in our most recent Form 10-K and Form 10-Q under the heading Risk Factors and Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of Participants are cautioned not to place undue reliance on any of our forward-looking statements. 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 they may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. 2

3 Transforming a Leader Through Diversification Boston Scientific Revenue Mix 43% 57% 18% 32% 50% 25% 24% 51% 28% 23% 49% as of Q3 Other Coronary Stents CRM Interventional Cardiology Peripheral Interventions Electrophysiology Endoscopy Urology/Gynecology Neurovascular Neuromodulation 3

4 Major Accomplishments Transformed Quality Revitalized the Pipeline Streamlined the Organization Strengthened Financial Fundamentals Diversified Product Portfolio Positioned for the Future 4

5 Transformed Quality 5 Quality Remains our Number One priority Project Horizon and Aurora Changed processes, systems, behaviors, culture, results Quality as a competitive advantage Corporate Warning Letter New product approval restrictions lifted Remediating final issues Unconstrained Product Approvals

6 Transforming Quality: CRM US Product Advisories Proof is in the Results 6

7 Revitalized the Pipeline: R&D Investment $1,200 $1,000 $800 $600 $400 $200 7 $ Est Est. $ in millions; excludes divestitures

8 Revitalized the Pipeline: 2008 CRM Launches Highest quality products, most frequent launch cadence gaining market share COGNIS CRT-D TELIGEN ICD Upgraded LATITUDE Patient Management System ALTRUA family of pacemakers ACUITY Spiral LV Lead CONFIENT ICD and LIVIAN CRT-D Smallest, thinnest high-energy devices in the world 8

9 Revitalized the Pipeline: Delivering CRM Innovation Physician acceptance exceeding expectations Impressed by combination of High Energy devices with improved longevities Backed by longer warranties Key Clinical Priorities: MADIT-CRT Trial: Can CRT slow the progression of HF in high-risk mildly symptomatic patients? ALTITUDE Initiative: To understand programming practices, device feature use and utility of the LATITUDE System 9 Smallest, thinnest high-energy devices in the world

10 Revitalized the Pipeline: Cardiac Rhythm Management WW CRM CFX 0% 5% 8% 10 Q1 07 Q1 08 Q2 07 Q2 08 Q3 07 Q3 08 Building Momentum

11 Revitalized the Pipeline: 2008 Cardiovascular Launches TAXUS Liberté Paclitaxel-Eluting Coronary Stent System TAXUS Express 2 Atom Paclitaxel-Eluting Coronary Stent System PROMUS Everolimus-Eluting Coronary Stent System Apex Balloon Dilatation Catheter Carotid WALLSTENT Monorail Endoprosthesis Leadership with Two-Drug Offering 11 The PROMUS Stent is a private-labeled Xience V Everolimus-Eluting Coronary Stent manufactured by Abbott and distributed by Boston Scientific. Xience is a trademark of the Abbott Laboratories group of companies.

12 Revitalized the Pipeline: U.S DES Market Dynamics TAXUS Share PROMUS Share 45% 47% U.S. DES Penetration 54% 55% 50% 45% 21% 27% 85% 65% 63% 66% 70% 73% 24% 20% Q1'08 Q2'08 Q3'08 Oct. and Nov. Est.* Q1'08 Q2'08 Q3'08 Oct. and Nov. Avg.* Clear Leadership in Recovering Market 12 Note: Market Share and Penetration Rates are based on average for the period. * MGR Data, 3 month average. for penetration

13 Revitalized the Pipeline: Strong Position in U.S. DES Market November 2008 Xience V Endeavor Cypher PROMUS TAXUS Maintaining DES Leadership Maintaining Premium ASP Penetration Approaching 75% Based on Millennium Research Group s US Interventional Cardiology Marketrack Market Leadership in DES 13 Cypher is a trademark of Cordis Corp. Endeavor is a trademark of Medtronic Inc.

14 Revitalized the Pipeline: Advancing the Next DES Generation PROMUS Element Stent TAXUS Element Stent LabCoat Technology E.U. Launch Late 2009 U.S. Launch Mid 2012 E.U. Launch Late 2009 U.S. Launch Mid 2011 CE Mark Submission for TAXUS 1H 09 Two-Drug Platform Satisfying Customer Preferences CAUTION: PROMUS Element Stent and TAXUS Element Stent, are investigational devices. Limited by U.S. Federal law to investigational use. Not for sale in the U.S. 14 BSC Internal Estimates

15 Revitalized the Pipeline: Sales from New Products Cardiovascular Group Sales 31% Cardiac Rhythm Mgt. Group Sales 67% 19% 39% 2008 Est Est Est Est. 09 Consolidated New Product Sales Projected at 38% 15

16 Revitalized the Pipeline 2009 New Product Launches U.S. EMEA Japan Cardiovascular Apex Balloon Catheter PROMUS Element Stent TAXUS Liberte Stent ICross IVUS Catheter TAXUS Element Stent PROMUS Stent Kinetix Guidewire ilab 2.0 Kinetix Guidewire Adapt Stent(PI) ilab 2.0 Flextome Cutting Balloon ilab 2.0 Cardiac Rhythm Management Blazer DX 20 (EP) IS-4 (Phased Launch) Latitude TY+ Blazer IRR CE (EP) Confient ICD Altrua Pacemaker IS-4 (Phased Launch) Cognis CRT-D Teligen ICD Endoscopy WallFlex Biliary Stent Biliary Dreamtome /Wire WallFlex Esophageal Stent WallFlex Biliary Stent Radial Jaw 4 RC Biopsy Forceps Urology HTA Procedure Sets CSA Accumax Fibers Titan Solyx Lithoclast Select Navigator Access Sheath Escape Basket ZipWire Guidewire Polaris Loop Stent Neurovascular Phoenix Coil Phoenix Coil Fathom Guidewire Neuroform EZ Stent 16

17 Streamlined the Organization Sold five non-strategic businesses Monetized non-strategic investments Restructured business units Leveraged resources More focus on competitors Simplified business model Focus on Core, Strategic Growth Markets 17

18 Strengthened Financial Fundamentals Trailing 12 months operating cash flow of $1.5B (~$1.00/share) Reduced gross debt by $2.2B since Guidant acquisition Cash on hand of $1.7B as of Q3 Next debt maturity April $825M Reduced operating expenses by $500M No sacrifice to key R&D projects Improved working capital management Improving Margins and Restoring Profitable Sales Growth 18

19 Diversified Product Portfolio Realizing value of Guidant acquisition Successfully executed two-drug stent platform strategy Realized power of acquisition in marketplace with launches of PROMUS and Cognis /Teligen Operating control of Neuromodulation business Achieved Greater Diversification 19

20 Diversified Product Portfolio: Cardiac Rhythm Management Resolved Product Advisories Issue Removed Quality Warning Letter Restored Customer Trust and Confidence Restored New Product Cadence Focused on Innovation and Clinical Science Investing in Global Field Force Exploring Next Frontier of Market Opportunities (Re)Engineered. (Re)Focused. (Re)Vitalized. 20

21 Diversified Product Portfolio: Neuromodulation Precision Plus Spinal Cord Stimulator Transforming quality systems Completed plant re-location Achieved #2 U.S. market position in pain management within 24 months of first market launch Multi- Electrode Bion Investing for future indications beyond lower back pain Note: Images are not to scale Mega Market in the Making 21

22 Diversified Product Portfolio: Neuromodulation Rapid Sales Growth Worldwide Revenue Trend $244m Medical Conditions Chronic Pain Neurological Disorders Solutions Neurostimulation Spinal Cord Stimulators Microstimulators $10m E Emerging Indications (under study) Migraine Over Active Bladder Obesity Deep Brain Stimulation Precision Plus Spinal Cord Stimulator The Multi-Electrode Bion * (right) and Precision Plus are being studied to treat new and emerging indications. 22 * The Multi-Electode Bion TM is an investigational device and is currently not available for sale.

23 Positioned for Expanding Leadership 38% 09 revenue from new products Expanding critical market share positions Strong customer relationships Breadth of product lines R&D focused on innovation Committed to Accelerating Revenue Growth and Improving Profit Margins 23

24 Positioned For the Future Boston Scientific Revenue Mix 28% 23% 49% $29 Billion Market Total CRM Stents All Other Market CAGR 6-8% 0-2% 8-10% 2008 as of Q3 Global Market Growth Opportunity 6 8% 24 Internal Estimates

25 We Have Transformed the Business 25 The Foundation is Firmly in Place! Simplified and diversified business Executed restructuring plan Turned CRM into major growth engine Generating significant cash flows Paying down debt rapidly Strengthened balance sheet Time to Focus on the Future! Enriched product pipeline Product portfolio in growth markets Financial discipline Positioned for Profitable Sales Growth