Boston Scientific to Acquire Axonics for $3.7 Billion to Enter High-Growth Sacral Neuromodulation Market

Jan 10, 2024 00:02 CST Updated 00:02

Axonics

Developer of Novel Implantable Neuromodulation Technologies

Boston Scientific

Medical Device Manufacturer

Source: Siyu MedTech; Editor: Liu Xinyi

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On January 8, 2024, Boston Scientific Corporation (NYSE: BSX) announced that it has agreed to acquire at a price of $71 per share, totaling$3.7 billion (approximately 26.2 billion RMB)The cash acquisition of Axonics (NASDAQ: AXNX), a manufacturer of devices for treating urinary and bowel dysfunction.

The acquisition is expected to take place in the first half of 2024.Upon completion this year, Axonics will become a wholly-owned subsidiary of Boston Scientific.

Analysts said that Axonics' productsHighly complementary to Boston Scientific Corporation's urology business, which accounts for approximately 14% of its estimated sales in the fiscal year 2023. After the acquisition, Boston Scientific can ride on the momentum of Axonics to enter the high-growth sacral neuromodulation market, once again coming head-to-head with Medtronic.

# Market Monopolized by Medtronic

Sacral Neuromodulation (SNM) or Sacral Nerve Stimulation (SNS) refers to the use of interventional methods to continuously apply a mild, short-pulse stimulating current to specific sacral nerves, thereby influencing and modulating the behavior of effector organs innervated by sacral nerves such as the bladder, urethral sphincter, and pelvic floor, achieving the effect of "neuromodulation."

SNM therapy began to develop as early as the end of the 20th century, with the earliest entrant into this market beingMedtronic, even once held a monopoly position. However, since the launch of Axonics' products, they have been continuously competing with Medtronic. Currently, the company holds a share in the sacral neuromodulation market.27%The market share, in 2022, 14,000 people were implanted with the company's system.

# Axonics: Innovator in the SNM Market

Axonics is a global medical technology company dedicated to developing and commercializing innovative products for adults with bladder and bowel dysfunction. The company ranked first in the 2022 Financial Times list of the fastest-growing companies in the Americas.

Axonics was founded in 2012Since then, it has been deeply exploring the needs of the incontinence population. In the United States, it is estimated that nearly 30 million adults aged 40 and above suffer fromOveractive Bladder (OAB)`, 19 million adults suffer from`Fecal Incontinence. These symptoms can significantly impact patients' quality of life, mental health, sleep, productivity, and social activities.

In 2018, Axonics went public on Nasdaq with its innovative sacral nerve stimulation product for treating urinary incontinence, and since then, the company's revenue has been increasing year by year. In the fiscal year 2022, the company's net revenue reached 274 million US dollars. The net revenue for the fiscal year 2023 is even estimated to be$366 million，Gross Profit MarginStill as high as75%Left and right.

The company's products are divided into two categories, one of which provides long-lasting and safe solutions for patients with overactive bladder or fecal incontinence.Clinical TreatmentTheSNM System and Bulkamid, a urethral bulking agent used to alleviate symptoms in women with stress urinary incontinence (SUI), are both among the fastest-growing segments in urology.

Previously, Axonics found through research that the technical difficulty of SNM lies inBattery LifePreviously, the average battery life of neurostimulators was only 4 years, and if patients needed to undergo MRI scans, the stimulator had to be removed. Thus,Axonics launched the world's first long-lasting, compact, full-body MRI-compatible rechargeable SNM system several years ago., marking a new milestone for the entire SNM field.

And now, the battery life of Axonics' fourth-generation wireless rechargeable SNM product, Axonics R20™, has exceeded20 Years, and the frequency with which patients need to charge the device has also decreased toOnce every 6 to 10 months. This system received FDA approval in January 2023 and is divided into four components:Subcutaneous implant in the upper armPulse Generator、Rechargeable Battery、Remote ControlAndAttachable to the skinWireless Charger。

Axonics R20™ is对标的是美Dunli'sInterStim X™Compared to the latter, the Axonics R20™ neurostimulator is smaller in size and has a longer lifespan.

▲InterStim X™

In addition to the rechargeable system, Axonics also launched a non-rechargeable system in mid-2022.Axonics F15™System, a system that adopts NexCore technology.

# Over $1 Billion Market, or Facing New Challenges

According to the analysis by REPORTSANDDATA, the global sacral neuromodulation market size was USD 1.03 billion in 2022 and is expected to reach USD 1.85 billion by 2032, with a revenue compound annual growth rate (CAGR) of 6.8% during the forecast period.

But overall,CurrentlyThe market penetration rate of SNM is still very low, with broad prospects for development.This situation arises largely because, although SNM is indeed highly effective in treating overactive bladder and fecal incontinence, neuromodulation itself is very complex, and currently, few patients are willing to adopt SNM therapy.

Moreover, new technologies that could severely threaten this market may emerge in the future. For instance, companies such as Medtronic, BlueWind Medical, and Valencia Technologies have already started research.Tibial Nerve Stimulation TherapyTo circumvent the shortcomings of sacral nerve stimulation therapy.

# About Boston Scientific

Boston Scientific was founded in 1979 and is headquartered in Natick, Massachusetts, USA. It is a global leading medical technology company. In 1997, Boston Scientific entered China, establishing branch offices and research centers in Beijing, Shanghai, and Guangzhou. The company's headquarters in China is located in Shanghai. In May 1992, Boston Scientific was successfully listed on the New York Stock Exchange.

Currently, Boston Scientific Corporation's business is divided intoEndoscope、Urinary、Neuromodulation、MedSurg、Heart Disease、Peripheral InterventionAndCardiovascular。

On October 26, 2023, Boston Scientific Corporation announced its financial report for the third quarter of 2023. The report shows,The company's net sales in the third quarter reached $3.527 billion,Compared with the same period last year, the reported growth rate was 11.2%, the operational growth rate was 11.1%, and the organic growth rate was 10.2%.

By business segment, Boston Scientific's MedSurg division grew 10.6% on a reported basis, 10.0% on an operational basis, and 9.4% organically.Urology business revenue was $483 million, and neuromodulation business revenue was $229 million.; while the Cardiovascular segment grew 11.6% over the reporting basis, 11.7% over the operational basis, and achieved organic growth of 10.6%.