Boston Scientific Corp.'s already large presence in Minnesota is getting even larger.
Boston Scientific's manufacturing expansion underway in Maple Grove
The company announced fourth-quarter results and outlined expansion details for its manufacturing facility in the Twin Cities suburb.
February 2, 2022 at 3:01PM
The two-story, 74,000-square-foot expansion will double the company's manufacturing space in Maple Grove for components of its Watchman device, one of its most celebrated products at present. The technology is designed to reduce the risk of stroke for patients with atrial fibrillation and aims to get them off blood thinners.
"It's one of our most important products," Mike Mahoney, Boston Scientific's chief executive, said in an interview Wednesday. "They're adding a lot of manufacturing capacity in Maple Grove now."
Construction began last summer on the project and should be complete at the end of this year.
Mahoney said that approximately 75% of Watchman components are made in Minnesota. The company did not say how many new jobs the growth would bring. The expanded facility will make nitinol wire — a metal alloy of nickel and titanium commonly used in medical devices — that will be used for Watchman devices and two of the company's stent product lines.
Boston Scientific on Wednesday also reported results of its fourth quarter, including a $94 million profit.
Despite beating Wall Street's earnings estimates, the company's softer-than-expected outlook for 2022 disappointed investors who sent the stock market down 4.7% in trading Wednesday.
While the company posted higher sales of its medical devices for the final three months of the year, its quarterly profit fell 55.2% compared with the same period last year when it benefited from a one-time investment gain.
Mahoney said that the company's adjusted financials, which exclude "one-timers," give a better sense of the business. Boston Scientific's adjusted financials show a fourth-quarter net profit of $667 million, nearly doubling last year's results for the period.
"We had record cash flow, about $2.3 billion for the year," said Mahoney. "We exceeded our sales guidance and our EPS guidance."
Like most other companies in the inflationary environment, operating expenses were up in the quarter — 12.3% for Boston Scientific.
"They want us to improve margins ... and higher EPS," Mahoney said of the company's Wall Street watchers.
But, citing uncertainty around supply-chain issues and COVID-19, Mahoney said, "We guided more conservatively."
The pandemic has had a dramatic effect on earnings for U.S. medical device makers as hospitals and patients have delayed many procedures and treatment for non-emergency care that use their equipment.
Most of Boston Scientific's products are implantable devices. Those surgical procedures can often be deferred for a little while.
Mahoney characterized the 2021 quarters as "lumpy," depending on whether cases were rising or falling; 2022 kicked off with a COVID surge as the highly transmissible omicron variant swept the globe.
"We actually have seen things get a little worse in January," said Dan Brennan, Boston Scientific's chief financial officer, referencing a spike in employees missing work because of the virus.
The company's reported adjusted earnings per share (EPS) for the quarter was $0.45, edging out analysts' consensus estimate by a penny.
Boston Scientific's fourth-quarter sales of $3.1 billion were up 15.4% compared with a year ago. It saw sales gains in all three of its primary business divisions: medical surgery, rhythm and neuro and cardiovascular.
The company's annual bottom line looked much better than its fourth-quarter results. For the year, Boston Scientific saw a profit of $1.04 billion compared with a net loss of $82 million in 2020.
Boston Scientific has more than 10,000 employees in Minnesota, more than it has in its home state of Massachusetts.
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