Meghan Scanlon, president of Boston Scientific’s urology division, expressed excitement over the firm’s recently closed acquisition of medical device company Axonics, which focuses on developing and commercializing differentiated products to treat urinary and bowel dysfunction.
“We have been tracking Axonics quite closely during their early days and in the rapid ramp of their commercial success,” Scanlon told Medtech Insight. “This acquisition gets us into a very large and important adjacency in urology.”
Boston Scientific announced on 15 November it bought Southern California-based Axonics for $71 cash per share, which represents an equity value of $3.7bn and an enterprise value of $3.3bn. The deal was first proposed about 11 months ago but faced scrutiny from the Federal Trade Commission, Bloomberg News reported in March.
The acquisition marks a significant expansion for Boston Scientific into sacral neuromodulation (SNM), a global market valued at $1.6bn in 2023 with a projected compound annual growth rate of 11.5% from 2024 to 2030, driven by rising rates of overactive bladder conditions and incidences of urge incontinence, as well as continued innovation in the space, according to research by Grand View Research.
Key Takeaways
- The Axonics acquisition boosts Boston Scientific's presence in the $1.6B SNM market and strengthens its urology portfolio.
- Axonics’ products, like Bulkamid and SNM systems, complement Boston Scientific's Sling System.
- Stakeholders and clinicians welcome the acquisition and offers Boston Scientific a more comprehensive gender balance.
In November 2023, the National Library of Medicine reported that there were 626,000 hospital admissions in the US each year for complicated UTIs, accounting for 1.8% of overall annual hospitalizations with 80% being non-catheter related.
Axonics has been on the forefront of SNM innovation by developing both rechargeable and nonrechargeable sacral neuromodulation systems (SNMs), which deliver electrical impulses to the sacral nerve and aim to treat overactive bladder and fecal incontinence.
The R15 system was Axonics' first rechargeable SNM product approved by the US Food and Drug Administration for treating overactive bladder and fecal incontinence in 2019.
Medtronic’s Interstim was the first FDA-approved SNM device on the US market and faced no competition until Axonics’ device came to market. The two companies became embroiled in a lawsuit when Medtronic sued Axonics for patent infringement in 2019. In September, Axonics announced that a jury found it had not violated the three patents in question.
In 2023, the FDA approved Axonics’s fourth-generation R20 rechargeable device for treating overactive bladder and fecal incontinence. The device was also approved by Health Canada in December 2022. It also received the CE mark in Europe this March and Australian Therapeutics Goods Administration (TGA) approval in September 2024. According to Zacks Research, nearly 100,000 incontinence patients globally have been treated with the device.
Axonics’ newly developed recharge-free F15 SNM device was cleared by the FDA in March 2022. The company also markets Bulkamid, a water-based gel that’s injected into the urethra to add volume and prevent urine leakage.
Axonics reported revenues of $116.19m for the quarter ended September 2024, surpassing Zacks’ consensus estimate by 1.46%.
In fiscal year 2023, Axonics reported revenues of $366m, a 34% increase over the previous fiscal year. In the US, Zacks analysts wrote in a 19 November commentary, the market for SNM is large and significantly underpenetrated, with analysts noting that the purchase marks a “major opportunity for Boston Scientific to leverage its global reach and capabilities to accelerate the awareness and adoption of Axonics technologies.”
The integration of Axonics’ product offerings will provide Boston Scientific with an opportunity to capture a larger share of the urology market, responding to varying patient needs based on life stages and the severity of incontinence. Scanlon recently talked with Medtech Insight about plans for the Axonics integration. This interview has been slightly edited for clarity and brevity.
Medtech Insight: How does the addition of Axonics’s portfolio complement Boston Scientific’s existing urology solutions and what does it add?
Scanlon: The overactive bladder (OAB) adjacency was the prime strategic interest for us as we entered into this acquisition. Across our broader urology portfolio, we are the clear category leader and this acquisition of Axonics helps us to further expand the portfolio of options we have to serve physicians, and most importantly, serve more patients around the world. Axonics portfolio allows us to continue to extend that category leadership into the adjacency of OAB.
But it’s not just OAB. With the addition came a product called Bulkamid which is a bulking agent that's injected into the pelvic floor of patients who are suffering from stress urinary incontinence.
That is nicely complementary to Boston Scientific’s Sling portfolio used to treat patients who are suffering from stress urinary incontinence. We are now excited about a more complete continuum of options for patients so they can make some joint decision-making with physicians as to which option is best for them given what stage they are in their life.
What is the market size for the sacral neuromodulation systems and what is the competitive landscape?
Scanlon: For SNM, we estimated the market to be around $800m back in 2022 and forecasted that this market is anticipated to expand to $1.6bn in the following five years, growing at 15%. We are on track to be growing at that clip, so it’s a nice, chunky market. Medtronic was the first company to participate in the SNM space. They were largely on their own in this marketplace until Axonics entered the market with their first approval in 2019.
What are your plans for integration of Axonics? Will it operate independently or be fully integrated?
Scanlon: Axonics will be rolled under our umbrella of the urology division at Boston Scientific. We will continue to have a cross-functional management team running that business out of Axonics. That includes many of the Axonics executives and senior leaders to help us continue to run that business. Over time, we always want to be really thoughtful of how we then plan to integrate into the bigger Boston Scientific ecosystem.
For the time being, our number one priority is to continue to keep the momentum going that Axonics has worked so hard to build and execute to achieve. We allow them to continue to drive their commercial momentum.
They have some exciting new product launches that they're working on. We want to get those across the finish line, and we also want to make sure they feel very welcome into the Boston Scientific ecosystem.
Can you share some more details about the products they are working on?
Scanlon: I’m not in a position to share those bits of confidential information.
How does this acquisition position Boston Scientific in terms of reimbursement and payer engagement for bladder and bowel therapies?
Scanlon: With sacral neuromodulation and with bulking, there's already well-established reimbursement pathways in the United States. Now internationally, there will likely be a lot of additional long-term work that we will do in different high-priority geographies to both obtain and/or strengthen reimbursement for these therapies in those markets.
Sacral neuromodulation reimbursement varies around the world. Some markets have reimbursement, some markets don’t. We’re in the active process right now of understanding that landscape and prioritizing which markets we're going to lean in to accelerate commercial adoption, obtain or improve reimbursement, and then continue to grow these therapies around the globe.
Does this acquisition open up new avenues for addressing other conditions or expanding indications for use in neuromodulation?
Scanlon: The legacy Axonics team has been looking at some additional offshoot indications that could work that surround the urological applications. At this time, I'm not going to go into specific details on those. There is the fecal incontinence indication that they currently have, which is a meaningful but smaller percentage of the patients that they treat, which is a nice adjacency with Boston Scientific. We participate in the GI endoscopy arena, so it's a nice tangential opportunity for us to explore. It wasn’t the primary driver for this acquisition, however.
What feedback have you received thus far from stakeholders, clinicians and patients regarding this acquisition?
Scanlon: So far, the feedback has been overwhelmingly positive. If you recall, we originally announced the agreement to acquire Axonics at the beginning of 2024. It’s been a longer pathway to final clearance to be able to close the acquisition.
Over that time, the number of physicians who have expressed their enthusiasm for Boston Scientific bringing the Axonics team and portfolio under our umbrella has been immeasurable. We are a comprehensive solution provider in the field of urology, and the caliber of people we bring to bear to support physicians and nurses and administrators in the hospital and operating room environment is something that's always been held in very high regard.
The great news is Axonics has an exceptionally talented team as well. We’re tucking that into the BSC umbrella. The sacral neuromodulation team is going to continue to operate as they had previously operated, and physicians are really happy at the more comprehensive offering we can provide.
[There’s another] thing I'd love to add on, which I think we've gotten very favorable feedback about. The urology portfolio with Boston Scientific prior to the Axonics acquisition had a very large kidney stone franchise, which treats patients of all genders. Then the other parts of our business were predominantly in prosthetic urology, BPH (benign prostate hyperplasia), and prostate cancer, conditions for patients with male anatomy. We had a smaller business of our pelvic floor, which was our slings and some reconstructive devices.
This acquisition brings a more comprehensive gender balance to our offerings. So certain societies that focus on female urological conditions are very excited that we're now going to have a much more substantive position to partner with them to advance patient care in the field of urogynecological and urological conditions that women tend to suffer from, such as OAB stress urinary incontinence and pelvic organ prolapse.
