Health providers, especially in the U.S., are consolidating, so Boston Sci needs to persuade hospital system officials that their products are the best in particular areas. “Category leadership is everything. Hospitals – whether you’re in Korea or St. Paul – they want innovation at low cost,” Mahoney said today at Healthegy’s Medtech Conference in Minneapolis.
Boston Scientific, for example, is making a big bet on structural heart devices. The company recently boasted that its Lotus TAVR, with its Chinese-finger-trap-like design, beat Medtronic’s CoreValve in a head-to-head trial. Boston Sci doubled down on TAVR by paying $435 million for Symetis and its line of minimally invasive replacement heart valves. And the company continues to report positive results for its Watchman left atrial appendage closure device.
Mahoney sees a multibillion-dollar market for Boston Scientific in the structural heart space.
“We’re not the biggest company, so we have to be category leaders,” Mahoney said.
Industry insiders credit Mahoney with leading a major turnaround at Boston Scientific over the past 6 years. Strategically, it was about repositioning Boston Sci away from its focus on drug-eluting stents and CRM, diversifying to include heart rhythm diagnostics, cardiology, structural heart, peripheral vasculature, neuromodulation and more, Mahoney said.
“We diversified the company over time, more and more to faster growth markets,” Mahoney said.
As Mahoney has said at previous events, including MassDevice’s DeviceTalks, it was also about shifting Boston Scientific culturally. Mahoney said one of the biggest surprises when he joined Boston Sci was that employees had become used to not winning. He was committed to the company for the long term, and wanted aspirational goals for the company.
“We literally looked at it as a startup, and we started over,” Mahoney said.
Mahoney turned to leadership changes, no more “5-foot-high binders for financial reviews,” encouraging teams to take risks, empowering global presidents, decentralizing, and promoting a “culture that didn’t punish people for making bad decisions.”
The results so far have been good. Boston Scientific’s stock is up about 26% so far this year.
The company is approaching $10 billion a year in revenue and $2.5 billion a year in free cash flow, Mahoney said. “That’s significant scale to do things.”
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