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Boston Scientific Corp  (NYSE:BSX)
Q3 2018 Earnings Conference Call
Oct. 24, 2018, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Boston Scientific Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Susan Lisa. Please go ahead.

Susan Lisa -- Vice President, Investor Relations

Thank you, Greg and good morning everyone. Thanks for joining us. With me on today's call are Mike Mahoney, Chairman and Chief Executive Officer; and Dan Brennan, Executive Vice President and Chief Financial Officer. We issued a press release earlier this morning announcing our Q3 2018 results, which included reconciliations of the non-GAAP measures used in the release. We have posted a copy of that release as well as reconciliations of the non-GAAP measures used in today's call to the Investor Relations section of our website under the heading Financials and Filings.

Duration of this morning's call will be approximately one hour. Mike will provide strategic and revenue highlights of Q3 '18, Dan will review the financials for the quarter and then Q4 '18 and full-year 2018 guidance and then we'll take your questions. During today's Q&A session, Mike and Dan will be joined by our Chief Medical Officer, Dr. Ian Meredith and Dr. Ken Stein.

Before we begin, I'd like to remind everyone that on the call, organic revenue growth is defined as year-over-year growth, excluding the impacts of foreign currency fluctuations and sales from the acquisition of NxThera, Claret, Augmenix and Symetis in the relevant periods for which there are no prior period related net sales.

Also note, this call contains forward-looking statements within the meaning of Federal Securities laws, which may be identified by words like anticipate, expect, believe, estimate and other similar words. They include, among other things, statements about our growth in market share, new products approvals and launches, clinical trials, cost savings and growth opportunities, our cash flow and expected use, our financial performance, including sales, margins, earnings and other Q3 and full-year 2018 guidance, as well as our tax rates, R&D spend and other expenses.

Actual results may differ materially from those discussed in the forward-looking statements. Factors that may cause such differences include those described in the Risk Factors section of our most recent 10-K and subsequent 10-Qs filed with the SEC. These statements speak only as of today's date and we disclaim any intention or obligation to update them.

At this point, I'll turn it over to Mike for his comments. Mike?

Michael F. Mahoney -- Chairman and Chief Executive Officer

Thanks a lot, Susie. Good morning everyone. Boston Scientific delivered another quarter of excellent results, as we continue our strong focus on quarterly execution, while also diversifying the portfolio and building on our plans for long-term sustainable high single-digit revenue growth and double-digit adjusted EPS growth. Our balanced portfolio and category leadership strategy are driving top-tier performance, enabling us to invest to address significant unmet clinical needs in both our core and adjacent markets.

In the third quarter, our team delivered 9% operational and organic revenue growth with balanced contributions from all our businesses and regions. Most of our businesses and regions continued to grow faster than the market. MedSurg led the way with 11% growth, while Rhythm and Neuro grew 8%. Cardiovascular sales increased 7%, all on an organic basis. We enjoyed similar broad strength regionally with operational sales up 8% in Asia-Pac, 9% in the U.S., 7% in Europe, Middle East and Africa, 18% in Latin America and Canada. Overall, emerging market sales grew 20% operationally, led by strong performance in China and Latin America, in particular.

We leveraged this worldwide 9% Q3 revenue growth to deliver adjusted EPS of $0.35, which is up 12% year-over-year and at the high end of our guidance range. Boston Scientific also continues to generate excellent cash flow with $569 million in adjusted free cash flow this quarter, which represented 21% year-over-year improvement.

As a result of our strong performance and confidence in our outlook, we're narrowing our full-year '18 revenue growth guidance to the high end of prior ranges and now target 8% operational and 7% organic revenue growth, with a 1 point contribution coming from M&A. We're also raising our structural heart revenue guidance from $450 million to $475 million to reflect continued WATCHMAN and ACURATE strength, plus the impact of the Claret acquisition.

We're also narrowing our full-year '18 adjusted EPS guidance range from $1.37 to $1.41, to $1.38 to $1.40 on the outperformance year-to-date, plus an incremental $0.01 of FX headwind, which is now expected to be a negative $0.04 to $0.05 for the full year versus prior expectations of $0.03 to $0.04.

For the fourth quarter we are guiding to operational revenue growth of 7% to 8% and organic growth of 6% to 7%, with a 1 point contribution coming from M&A. Excluding the Q4 reinvestment of our second quarter tax settlement, we are targeting Q4 '18 adjusted EPS of $0.36 to $0.38, and Dan will detail that a bit more.

I'll now provide some highlights on Q3 results and our Q4 outlook. All reference is to growth on an organic year-over-year basis, unless otherwise specified.

Our urology and pelvic health business continued its above-market global performance trend, growing 12% operationally and 10% organically. This is led by mid-teens growth in our Stone franchise and sales of LithoVue continued to outperform and drive nice pull-through. Sales of Men's Health products grew high single-digits, well balanced at both erectile function restoration and male continence products.

Our prostate health business also grew high single digits on an organic basis, due to green light laser therapy, international expansion; and also Rezum, which is our minimally invasive therapy for BPH via the NxThera acquisition, contributed nearly 200 basis points of growth to Uro/PH overall. Also, the recently closed Augmenix acquisition enhances our category leadership strategy in urology with the SpaceOAR hydrogel, a compelling addition to our growing prostate health treatment portfolio. Prior to radiation therapy, the SpaceOAR hydrogel is injected in office by the urologist or radiation oncologist to create additional space between the rectum and prostate during treatment, thereby reducing the amount of rectal exposure to radiation and therefore, the associated side-effects.

Turning to endoscopy. Endo growth accelerated 12%, due to excellent momentum in our core Endo business and EndoChoice sales, including infection prevention and pathology. Looking ahead, Endo should turn into high single digit growth for the full year '18, and is well poised to sustain this rate in '19, as we look forward to multiple new product launches, including SpyGlass Digital 2 (ph), Orca's hemostasis pod (ph) for infection prevention and ORISE Gel for endoluminal surgery and resection of suspicious and cancerous regions. We also remain on track with the ongoing development of our comprehensive single-use scope platform, which include the Exalt-D duodenoscope, slated for year-end '19, plus a bronchoscope for use in pulmonary applications, an upper GI scope for emergent bleeds, and a surgical scope for pancreatic biliary applications.

Neuromodulation grew an impressive 23% in the quarter, driven by the ongoing successful launch of our innovative WaveWriter spinal cord stim system in the US and increasing demand in Europe. In the pain segment, WaveWriter continues to gain global share due to impressive real-world results, giving us unique ability to offer combo waveform therapies, both with paresthesia and sub-perception.

We also enrolled our first patent earlier this month in the WaveWriter combo clinical trial, which is a randomized clinical trial that will compare a WaveWriter to traditional therapy. In addition, our deep-brain stimulation performance and capabilities continue to expand with strong early momentum in the U.S. and continued penetration in Europe. We're preparing for a launch of our rechargeable and primary cell DBS system with directional leads by the end of this year. And given our differentiated technology and excellent underlying market growth, we anticipate continued strength at both SCS and DBS sales.

CRM sales grew above market at 3% and we continue to gain share as the Number 2 share player globally in the high-voltage defib segment. CRM sales gains were led by double-digit growth in defib sales, reflecting strong global uptake of S-ICD and our Resonate platform, with its highly differentiated HeartLogic heart failure alert. In addition to continued momentum from S-ICD, we believe HeartLogic will be a long-term key differentiator for the Resonate platform. Phase I of our MANAGE-HF HeartLogic trial should complete enrollment by the end of Q1 '19 and is intended to evaluate the clinical integration of HeartLogic into managing patients with heart failure.

Turning to the Pacemaker segment, as forecast, sales were down low double digits in Q3. However, last month we received FDA approval for MRI compatibility in our CRT-P devices, which should improve our (inaudible) outlook looking forward. Despite this headwind from pacing, the excellent global momentum of our defib portfolio supports our expectations for above-market CRM growth, as evidenced by our low-single digit growth year-to -date in '18.

EP sales grew 9% in the quarter, which does represent the slowdown from recent trends. We're continuing investments in high-growth markets and see good growth in our Rhythmia HDx mapping and nav platform. We're now fully launching our DirectSense and IntellaNav MiFi OI ablation catheters in Europe. We're also rolling out LUMIPOINT, which is the first automated algorithm to assist with high-definition map integration, helping EPs accelerate clinical decisions. We also continue investing long term in EP with projected year-end '19 launches for both second-gen cryo and RF-ablation single-shot balloon therapies for PVI. The Cryterion and Apama single-shot platforms respectively will complement our arrhythmia mapping system and therapeutic catheter platforms.

Within our Cardiovascular group, PI posted another impressive quarter, growing 11%. Growth was strong in all geographic regions. PI also delivered excellent growth across all three franchises, including peripheral arterial disease, venous and interventional oncology. We have also commenced the launch of Eluvia in the U.S., following both the outstanding results of the IMPERIAL trial, which showed the superiority for Eluvia in the first head-to-head study of its kind in an earlier expected FDA approval. We believe Eluvia has significant market opportunity, given the large addressable patient population, its differentiated sustained release technology and its demonstrated superior clinical outcomes with reduced need for reintervention. This launch is in the very early stages, but our sales team is fully trained. We've already received significant interest from physicians and healthcare systems around the country.

We've also achieved two important clinical milestones in the quarter in PI. We have enrolled the first patient in our SAVAL study, evaluating the purpose-built drug-eluting stent for below-the-knee lesions. And secondly, we completed enrollment in the Ranger II SFA trial, which will support a targeted 2020 U.S. launch of the Ranger drug-coated balloon.

Turning now to our Interventional Cardiology business. This segment delivered 6% growth in the quarter, which is a great evidence of the ongoing and successful diversification strategy of this business. Complex PCI products grew double digits through the breadth of our portfolio, new product launches and successful global expansion efforts. Our global complex PCI results largely offset the high-single-digit declines in our coronary drug-eluting stent business.

In coronary DES, we continue to work through competitive pricing headwinds, particularly in the U.S and we're excited to be launching the new DES named Promus ELITE, which was recently FDA approved and provides a permanent polymer stent alternative for physicians, while leveraging the SYNERGY delivery system. We believe that Promus ELITE will provide important support to our global tier DES segmentation strategy.

Our Structural Heart programs continued to build strong momentum and we're excited about our overall performance in the significant category, which includes the defense of our intellectual property that we may continue to sustain our cycle of innovation. We're very pleased with yesterday's German court ruling that granted Boston Scientific the right to enjoin Edwards Lifesciences from selling its next-gen Ultra device in Germany. As mentioned, our increased Structural Heart revenue guidance of $475 million is due to above-planned results from both our WATCHMAN left atrial appendage closure and ACURATE TAVR programs and a small contribution from the recently closed Claret acquisition.

Claret developed Sentinel, which is the only cerebral embolic protection system approved in the U.S. and Europe to protect patients against the risk of stroke during TAVI. We see significant opportunity for embolic protection in TAVI, both today and longer term, including usage with intermediate and low-risk patients and potentially other left heart and endovascular procedures. We believe the unique value of this technology is evidenced by the new Technology Add-on Payment for Sentinel in the U.S., which went into effect October 1.

On the clinical front, we are pleased to announce that we completed enrollment in the 50 patient LOTUS Edge Nested Registry and submitted that data to FDA in support of our PMA submission, in which we filed mid-August.

We've also recently filed two IDEs with the FDA; one for the Reprise IV study, which will be used to pursue U.S. Reg approval for LOTUS Edge in intermediate TAVR patients, as well as another IDE for the ACURATE neo II study in the intermediate, high and extreme-risk TAVI patients. We've now launched ACURATE into 30 countries and continue to see excellent physician uptake for this valve, and we are excitedly prepared for the targeted LOTUS Edge launch in first quarter '19 in Europe and mid- '19 in the U.S., which is consistent with previously communicated timelines.

Turning to WATCHMAN, the WATCHMAN delivered excellent growth again this quarter, as the platform continues to build very strong physician

support and global positioning. All key metrics are trending well, including utilization, reorder rates and account openings. We completed enrollment in the U.S. in the next-gen WATCHMAN FLX IDE well ahead of schedule. We continue to target an EU launch of FLX in the first half of '19. Japan remains on track for WATCHMAN launch in the second half of '19 and we continue to invest in multiple WATCHMAN market development and training programs.

So, beyond our organic objectives, our integration teams are highly focused on maximizing the integration and success of the tuck-in acquisitions that we announced last year -- or this year, which includes EMcision, Securus, NxThera, nVision, Claret, Cryterion, VENITI and Augmenix. These acquisitions all target high-growth markets, enhance our category leadership strategy, leverage existing BSC global capabilities and further enhance our short-term and long-term growth profile. It's really a combination of our strong organic portfolio and commercial execution, along with tuck-in M&A that's led to our recently increased outlook for 7% to 10% operational revenue growth CAGR in '19 and '20. We're also continuing to absorb the near-term dilution of these multiple tuck-in transactions and a greater FX hit, while continuing to deliver on our commitment to double-digit adjusted EPS growth.

Our core business has very strong momentum, and our pipeline, due to both internal and external initiatives, has never been stronger. We believe, we are uniquely positioned to drive shareholder value due to our long-term growth profile, continuous potential property and margin improvements, commitment to double-digit adjusted EPS growth and a proven ability to deploy capital.

So, I want to thank our employees for their winning spirit, their commitment to advancing science for life. And Mr. Brennan will now provide a detailed review of our financials.

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Thanks, Mike. Third quarter consolidated revenue of $2.393 billion represents 7.7% reported revenue growth and reflects a $31 million headwind from foreign exchange, which compares unfavorably to the tailwind of up to $10 million we expected at the time of guidance. On an operational basis, which excludes the impact of foreign currency fluctuations, revenue growth was 9.1% in the quarter compared to our guidance of 7% to 8% growth. The outperformance was once again across the board, both on a business and regional basis.

In Q3, sales from recent acquisitions, primarily NxThera and Claret, contributed approximately 40 basis points to total Company growth, resulting in organic revenue growth of 8.7%. With this strong sales performance, we delivered Q3 adjusted earnings per share of $0.35, representing 12% year-over-year growth and at the high end of our guidance range of $0.33 to $0.35. Notably, this $0.35 in the quarter includes approximately $0.02 of negative FX impact, which is $0.01 to $0.02 greater than our expected $0.00 to $0.01 headwind at the time of guidance.

Adjusted gross margin for the third quarter was 72.7%, above our guidance range of 71.5% to 72% and represents an increase of 50 basis points year-over-year, despite a 50 basis point negative year-over-year impact from foreign exchange. This FX hit was more than offset by a mixed benefit from strong performance in our Neuromodulation business, WATCHMAN and Men's Health franchises, as well as continued benefit from operational improvements and manufacturing cost reductions.

Adjusted SG&A expenses were $849 million or 35.5% of sales in Q3, at the high end of the range and up slightly year-over-year, as we continue to fund initiatives related to recent acquisitions and focus on key commercial launches. Adjusted research and development expenses were $261 million in the quarter or 10.9% of sales, at the high end of our range, given robust clinical spend and down slightly year-over-year. Royalty expense was 0.7% of sales, roughly flat year-over-year.

As a result, adjusted operating margin was 25.6% in the quarter, toward the high end of our guidance range of 25.25% to 25.75% and represents a 50 basis point increase year-over-year, which was driven by the strong adjusted gross margin result. We continue to expect our full year adjusted operating margin to be in a range of 25.5% to 25.75%, consistent with the goal outlined at the start of the year. We believe, we can deliver 50 to 100 basis points of adjusted operating margin improvement in 2019 and 2020 as well, while also investing in our businesses and developing our recent acquisitions to drive 7% to 10% operational revenue growth.

Moving to below the line, in interest and other expense. Interest expense for the quarter was roughly flat to last year at $58 million versus $57 million in Q3 last year. Our average interest rate expense was 3.2% in Q3 this year compared to 3.7% in Q3 of last year. Adjusted other expense was $12 million in the third quarter, and primarily included dilution from our equity method investments, adjustments to investments accounted for into the measurement alternatives, as well as the transactional foreign exchange losses, including hedging costs.

Our tax rate for the third quarter was 5.3% on a reported basis and 10.5% on an adjusted basis, below our guidance range of 13% to 14%, as a result of a lower operational rate from greater clarity related to the tax reform and its impact on our tax structure. Further, we delivered Q3 2018 adjusted earnings per share of $0.35, which includes an FX headwind of $0.02. On a reported basis, GAAP EPS of $0.31 includes net charges and amortization expenses after tax of $53 million for the quarter. We ended Q3 with 1.404 billion fully diluted weighted average shares outstanding.

Adjusted free cash flow for the quarter was $569 million compared to $469 million in Q3 last year. In the quarter, we used cash and short-term debt to fund our recent acquisitions, as well as previously agreed upon legal settlement. We continue to expect 2018 adjusted free cash flow to be approximately $1.9 billion.

We're also making good progress on our mesh litigation with approximately 97% of all of our known claims settled or in the final stages of settlement. In the quarter, we increased our forward-looking accrual for legal fees associated with the remaining mesh cases by $18 million, while we continue to believe that our reserved amounts per case are sufficient to finalize the remaining cases and claims. Our total legal reserve, of which mesh is included, was $1.162 billion as of September 30, 2018, a decrease of $102 million from the $1. 264 billion as of June 30, 2018.

In the quarter, we made cash payments of over $100 million into the qualified settlement fund, which is shown as restricted cash on our balance sheet. Our current balance of restricted cash, which is primarily related to the qualified settlement fund, is $781 million. As a result, we have approximately $300 million left to fund and the remaining balance sheet liability will be released as funds are released out of the qualified settlement fund to plaintiffs, which should occur in Q4 with a small portion in the first half of 2019 to complete the process.

Capital expenditures for the third quarter of 2018 were $77 million. We continue to expect capital expenditures of approximately $350 million for the year, as we build capacity, integrate acquisitions, and drive growth.

I'll now walk through guidance for Q4 and full year 2018. For the full year, we expect consolidated 2018 revenue to be in the range of $9.787 billion to $9.827 billion, as we narrow our full-year organic revenue growth guidance from 6% to 7% to simply 7%. We expect the contribution from acquisitions to be an additional 80 basis points of growth for the full year. Note that this includes the recently closed Augmenix acquisition as well as contributions from NxThera and Claret and Symetis in the relevant periods.

For the full year, we now expect foreign exchange to be a tailwind of approximately $50 million to $60 million for full-year 2018 revenue, which is a significant decrease from our prior expectations of $125 million to $150 million tailwind, due to the strengthening U.S. dollar against most major currencies. We continue to expect our adjusted gross margin for the year as a percentage of sales to be approximately 72% for the full year, which now assumes a negative FX impact of 80 basis points for the full year, down slightly from our prior guidance of 90 basis points.

We now expect our full year adjusted SG&A expense to be at the high end of our previous range at approximately 35% of sales, as we're seeing the benefits of operating expense control programs currently under way, while also investing to further enhance our short-term and long-term growth profile, particularly with initiatives related to our recent acquisitions. Similarly, we now expect full year adjusted R&D spending to be approximately 10.5% to 11% of sales and continue to expect full year royalty rates to remain at slightly less than 1% of sales for 2018. This implies a full year 2018 adjusted operating margin in a range of 25.5% to 25.75%, which is consistent with prior guidance.

Turning to tax, we now expect our full year 2018 adjusted tax rate to be approximately 12%, which reflects an operational rate of approximately 13% and an approximate 100 basis points of benefit from the accounting standard for stock compensation, the majority of which was already reflected in our year-to-date tax rate. As a reminder, we recorded a $0.06 or $82 million non-cash tax benefit in Q2, resulting from the IRS settlement for the 2001 to 2010 tax years. As previously disclosed, we continue to explore strategies to reinvest this $0.06 of tax benefit into our tax structure with the goal of reducing our operational tax rate in 2019 and beyond, below our previously announced goal of 15%. The strategies we are exploring would optimize our structure, leveraging differences in tax rates by jurisdictions. Based on the work we completed to date, we believe this $0.06 reinvestment will not have a material cash consequence, it will occur in Q4 of 2018 and will result in an approximate 27% adjusted tax rate for the fourth quarter. Given that our year-to-date adjusted tax rate through Q3 is 6.5%, this Q4 adjusted tax rate of 27% will result in our full-year adjusted guidance of 12%. Thus, you can see there is no impact to our full-year adjusted tax rate as we're simply reinvesting the $82 million benefit in Q4 that we recorded in Q2.

Accordingly, we do not expect an impact to full year adjusted earnings per share as a result of either the Q2 tax benefit or the Q4 reinvestment. To be clear, our fourth quarter EPS guidance, which I will discuss in a moment, will include this reinvestment expense of $0.06, however, we encourage you to exclude both the Q2 benefit of $0.06 and the Q4 reinvestment of $0.06 when you model the underlying business performance, thus net neutral to full-year 2018 adjusted EPS.

Moving below the line, we continue to expect these expenses, which include interest payments, dilution from our venture capital portfolio and costs associated with our hedging program to be approximately $300 million for the full year. Finally, we expect a fully diluted weighted average share count of approximately 1.405 billion shares for Q4 and 1.401 million shares for the full year 2018.

We're narrowing our full-year 2018 adjusted earnings per share range to $1.38 to $1.40, representing 10% to 11% adjusted earnings growth. Importantly, this now includes a negative FX impact of $0.04 to $0.05, which is an increase of $0.01 versus prior expectations of $0.03 to $0.04, due to recent rate movements.

While FX continues to be a headwind for us in 2018, we believe that if rates holds constant, FX should become relatively neutral for our EPS in 2019 as we previously said, but we will provide additional details with our guidance in early 2019. As a reminder, in addition to the $0.04 to $0.05 of negative FX, our adjusted EPS guidance also includes $0.02 to $0.03 of dilution expected from product and market development activities required for the acquisitions we've completed in 2018, consistent with our Q2 earnings call. On a GAAP basis, we expect EPS to be in a range of $1.08 to $1.10.

Now turning to Q4, 2018, we expect consolidated revenue to be in a range of $2.525 billion to $2.565 billion, representing year-over-year organic growth of 6% to 7%. Our guidance for the fourth quarter reflects the ongoing momentum from the business, but also has the more difficult comp from Q4 last year, which is 250 basis points greater than the Q3 '17 comp on an organic basis. In the fourth quarter, we expect an additional 120 basis points contribution from recent acquisitions and expect the foreign exchange impact to be a headwind of $30 million to $40 million.

For the fourth quarter, adjusted earnings per share is expected to be in a range of $0.30 to $0.32 per share, including the expected $0.06 reinvestment of the Q2 2018 tax benefit and representing an EPS decline of 13% to 7% year-over-year. Excluding the impact of the expected $0.06 tax reinvestment, our adjusted earnings per share guidance is $0.36 to $0.38, which represents 4% to 10% growth and we encourage you to model using this guidance range.

Fourth quarter GAAP EPS is expected to be in a range of $0.15 to $0.17 per share. Please check our Investor Relations website for Q3 2018 financial and operational highlights, which outlines Q3 results, as well as Q4 and full-year 2018 guidance, including P&L line item guidance.

With that, I'll turn it back to Susie, who will moderate the Q&A.

Susan Lisa -- Vice President, Investor Relations

Thanks, Dan and Greg, let's open it up for questions for the next 30 minutes or so. Please limit yourself to one question and one related follow-up. Greg, please go ahead.

Questions and Answers:

Operator

(Operator Instructions) Your first question comes from the line of Bob Hopkins from Bank of America. Please go ahead.

Robert A. Hopkins -- Bank of America -- Analyst

Oh, thanks and good morning.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Good morning, Bob.

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Good morning, Bob.

Robert A. Hopkins -- Bank of America -- Analyst

Good morning. So, just two quick things and congrats on another very strong quarter. First, just given the announcement yesterday on the German Court ruling, sort of a procedural question. So now, you guys have the right to enjoin Edwards in Germany. Is there sort of a date by which you need to make a decision on next steps and whether or not you will enforce that injunction?

Michael F. Mahoney -- Chairman and Chief Executive Officer

Yes, the Ultra injunction that was announced yesterday, it's 30 days. So, it's basically November 23.

Robert A. Hopkins -- Bank of America -- Analyst

Okay, so you need to make a decision by then on what you're going to do?

Michael F. Mahoney -- Chairman and Chief Executive Officer

On, Ultra, yes -- on S3 Ultra. Yes, that's correct.

Robert A. Hopkins -- Bank of America -- Analyst

Okay. And then, just a question -- a little bit of a bigger picture question. The Street obviously has a lot of confidence in your ability to drive top line growth, but it's always hard for us to model certain things, like short-term deal dilution and I appreciate your comments on currency, but on the notion of short-term deal-related dilution, could you offer any preliminary thoughts on what the impact of that deal dilution might be for next year relative to the $0.02 to $0.03 this year, and just maybe some preliminary thoughts on whether or not the Street is accurately capturing those headwinds in the current consensus of about 58 (ph)?

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Yes. Bob, we won't give a specific number relative to what the dilution is. We did give that obviously for this year being that $0.02 to $0.03. I'm happy that we have the financial strength that's allowing us to offset that this year, and that's always the goal. I mean, as we've always stated and consistently delivered, our goal is a double-digit adjusted earnings-per-share growth. And I would assume that that's no different as we head forward. So it's about making the trade-offs. We certainly want to make sure we give the care and feeding necessary to those acquisitions, so they can drive that 7% to 10% growth for '19 and '20 and hopefully beyond that time frame as well. And we're pretty well heeled in making those trade-offs and delivering that double-digit EPS growth.

Robert A. Hopkins -- Bank of America -- Analyst

(inaudible) Street is missing anything big picture?

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

I wouldn't comment specifically on what the Street has. We'll obviously will give guidance in early 2019, but our goal is always double-digit adjusted earnings-per-share growth and should be no different going forward.

Robert A. Hopkins -- Bank of America -- Analyst

Fair enough. Thank you very much.

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Thanks, Bob.

Operator

Your next question comes from the line of David Lewis from Morgan Stanley. Please go ahead.

David Lewis -- Morgan Stanley -- Analyst

Good morning. Just two for me. one on the top and one on the bottom. Just looking into the fourth quarter guys, you're modeling to modest organic acceleration into the fourth quarter, which I think is notable, because you haven't done that all year. So what are some of those drivers in the fourth quarter and what does that tell us if anything about your confidence in organic acceleration heading into 2019? And then I had a quick follow-up.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Thanks, Dave. I think if you just look at the business, it's broadly based, is performing at pretty high level. The strong diversification across somewhat -- in the third quarter MedSurg growing 11%, Rhythm and Neuro 8%, Cardio 7%. So as you look to the fourth quarter and also the regions, US 9%, Europe 7% and Asia 8%. So we're seeing very well balanced, diversified growth across regions and businesses and we expect that momentum to continue in fourth quarter. We did have some important new approvals like Eluvia, but we don't anticipate that making a significant impact until the first quarter of '19. So we really see the continued momentum of the business. And we continue to invest for what we believe is a 7% to 10% operational growth CAGR in '19, '20. It's really just a continuation of the momentum that we have, new product launches. And as you indicated, we have a tough comp in fourth quarter of about 250 basis points higher than third quarter.

David Lewis -- Morgan Stanley -- Analyst

But, Mike, is it reasonable to assume -- obviously we're getting operational acceleration next year. Should we also expect organic acceleration next year?

Michael F. Mahoney -- Chairman and Chief Executive Officer

Yes. We will give guidance in due course here. We talked about 7% to 10% and during that piece we think about 150 basis points of that 7% to 10% comes from M&A. (inaudible) 5.5% to 8.5% organic, which is pretty strong. And we've got -- you heard in my comments that were likely. We've got significant product launches coming across each major segment. So we're very confident in that 7% to 10%. And we've got a nice track record of delivering it.

David Lewis -- Morgan Stanley -- Analyst

Okay. Very helpful and clear, Mike. And then Dan, just a couple of follow-ups here on earnings next year. I know you're not -- and keeping with the historic practices, not going to give us the number for '19, unfortunately, but there are a couple of pieces in your script I wanted to push you on a little bit. The first is FX, most people would have assumed an FX headwind next year. Still into revenue, you mentioned neutral effect to earnings, maybe help us understand that. The tax-free investment this year, does that imply that we could see some positive movement on the tax rate for next year? And then the 50 to 100 basis points of margin expansion, are you still confident in that number, even if you move forward with the significant Millipede investment? Thanks so much.

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Yes, sure. There's a lot there. Let me hit them one at a time. So FX, yes, we've obviously kind of snapped the line with where rates are today and have a very successful hedging program that we put in place over time and with what we see today, with where rates are today, we kind of see FX being neutral at an EPS line as we get to 2019. Obviously, when we give guidance we'll update that, but that's kind of where we'd be today. Tax, yes, if we're successful in being able to reinvest, which we believe we will be, reinvest that $0.06, $82 million onetime benefit here in the fourth quarter. We would expect to be able to bring down that 15% operational tax rate guidance that we've given for '19 and '20. So that is clearly the goal and we will give you more information on that when we give guidance. And then the 50 to 100 basis points, yes, that's the goal that we've had, that's the goal we've established. And for '19 and '20 that should absolutely be doable.

Operator

Your next question comes from the line of Jason Mills from Canaccord Genuity. Please go ahead.

Jason Mills -- Canaccord Genuity -- Analyst

Good morning, Mike and Dan. Thanks for taking the question. I have a more 20,000 foot question on MedSurg and then a question on US Structural Heart. First on MedSurg. Mike, that business has been a leader for you, both in growth in margins for quite some time and not all, but much of your M&A activity has occurred in MedSurg. Could you talk a bit about the target addressable markets in MedSurg? You've gotten into BPH now. Augmenix is a new TAM. Could you talk about those TAMs merging with the existing ones that you already have, relative to the rest of your business? I know you're excited about all of your business, but this one gets maybe a little bit less attention. I'd just be interested in your assessment of the TAMs there over the longer term. And then I had a follow-up on the Structural Heart.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Yes. So, thanks for the question. We spend a lot of internal time on our Endo and Uro businesses. We think they have really unique category of leadership in the industry in med-tech, both of them do is point, and significant scale now globally. So, just -- the Endo business, there has been lighter M&A activity in the Endo business. The very high percentage of that business is revenue growth, which has been impressive, 12% in Q3 through organic initiatives. And so, we invest a strong amount in R&D. We're very efficient with it and we've got a strong product cadence and we continue to expand globally. A little bit less M&A activity and more organic, the last 12 months in Endo.

Uro, we've been very active with M&A. We've done three acquisitions in Uro. Really we think, I hate to say -- I won't say cement, that's too costly, but to really give us a very strong category leadership position in urology with the recent acquisitions of Augmenix, NxThera and also expansion into Women's Health with nVision. So it's a similar playbook as Endo. They're a little less diversified in terms of the geographic commercial results, but they're just very strong portfolios, very strong innovation cadence coming and maybe most importantly, divisions that they deliver on their commitments and they continue to invest for the long term. On the total addressable market, I will let -- Dan do you have any comments on that?

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Yeah, we really haven't -- it's part of the kind of the mid- to high-teens of billions of markets that we're adding over the next two to three years in the new technologies that we're addressing, both organically and also through acquisitions. So, we haven't given specific numbers. We did include in the financial operations highlights on our website, a nice little summary of acquisitions, so you can refer to that, but we haven't put out the TAM by acquisition at this point. I'd imagine, we'll talk more about that as we get to Investor Day next year as well.

Jason Mills -- Canaccord Genuity -- Analyst

That's helpful, I guess, Mike and Dan, where I was going with that is, it's been a leader in both growth and margins for a while. Given the acquisitions, would you expect that to continue, say, over the next couple of years? And then I'll just ask my follow-up as well. In Structural Heart, clearly when you had to pull back a little bit on LOTUS in the U.S. market for TAVR, it seems WATCHMAN benefited from the incremental focus from that sales force in the United States. And so, as you prepare for launch in the United States with LOTUS Edge, how might your sales force change. Will you need to add to it, will there be incremental spending there, or do you feel like you're ready at this point to market both products full force whenever the FDA approves LOTUS Edge? Thank you, very much.

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Sure. I can take the acquisition one and then Mike can do the second one. On the acquisition front, we've obviously done a series of acquisitions this year. Still have a tremendous amount of financial flexibility, debt to EBITDA 2.4 times at the end of Q3. Obviously, putting some of the legacy liabilities, particularly mesh behind us. So as you look at '19 and '20 and cash flow that hopefully should be north of $2 billion in each of those years, it still gives us ample capacity to be able to continue to execute our strategy, which is category leadership. So I would look for us to continue to do acquisitions that fill out the portfolio.

Michael F. Mahoney -- Chairman and Chief Executive Officer

And on the sales coverage area, we feel very comfortable there. In terms of WATCHMAN, which is doing remarkably well, it's all about increasing utilization. So the sales reps requirements to open up new centers really has declined significantly over the past three years, because we have so many centers that are open. So there's still a few center -- new center openings that account for the revenue. The bulk of it really is a combination of what we call therapy awareness reps, helping, working in partnership with the customers through the hospitals to drive awareness, physician training and increase utilization. And so, it's a pretty significant, I would say, clinical exercise and therapy awareness exercise and a little bit less on the traditional sales new account openings. That will now shift over to the TAVI responsibility for a lot of those reps. So by geography, there's different models. Sometimes we have separate reps, sometimes we have combined reps, depends on what the situation is. But we will continue to invest in both our WATCHMAN clinical team and also continue to make investments as we do a smart launch of our LOTUS platform in the US, with clinical reps and sales reps.

Jason Mills -- Canaccord Genuity -- Analyst

Thanks very much.

Operator

Your next question comes from the line of Larry Biegelsen from Wells Fargo. Please go ahead.

Larry Biegelsen -- Wells Fargo -- Analyst

Good morning. Thanks for taking the question. One on Eluvia, one on litigation. So starting with Eluvia. Mike, can you talk a little bit about the pricing strategy? We've heard you priced it at a substantial premium to Zilver in the US. Can you talk about your plans and expectations for a new Tech Add-on Payment and a Pass-Through Payment and how that -- it could impact near-term and mid-term Eluvia sales? And I have one follow-up.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Yes. Thank you very much. You did a nice report on that this week. Well done. So I really won't comment on our pricing strategy, really for competitive reasons. And so, we do think that Eluvia has demonstrated superior results with the platform, given the IMPERIAL data. And so we do believe that the product should be priced at a premium and we are pursuing a NTAP in the inpatient environment. And so, we'll hopefully hear news on that by the end of the first quarter time period. So we think a combination of the superior (ph) results should help drive a premium price and we'll work smartly to try to receive additional reimbursement to add-on payments currently as planned in the inpatient center.

Larry Biegelsen -- Wells Fargo -- Analyst

All right. And Mike, it would seem that the Edwards litigation is ripe for some type of resolution soon, because you only have 30 days as you mentioned earlier to exercise your option to enjoin Ultra in Germany. If you don't exercise your option on Ultra you'd lose some of your leverage. Investors have assumed that you have been enjoining Sapien 3 in Germany, because you've been supply constrained, but that situation I believe is changing. I'd love to hear your thoughts on these -- on those topics. Thanks for taking the questions.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Yes, so the great news is, as you know, we made a really strong progress with both LOTUS and ACURATE. So, our ability to supply with ACURATE has been significantly enhanced over the past year. The ops team has done a great job with that and we continue to actually build another facility to support ACURATE. And we're excited about the launch of LOTUS in Europe. So, overall, the strength and capabilities of our TAVR supply and capabilities continue to get stronger. I won't make any comments other than we're really pleased and it's the results that we expected. So we have really demonstrated and proven our patents out in Germany with S3, including the appeal trial and we're pleased with the results of the Ultra enjoinment with ACURATE's capabilities. So, we've got some options here and I think we'll continue to play it out.

Larry Biegelsen -- Wells Fargo -- Analyst

Thanks for taking my questions.

Operator

Your next question comes from the line of Joanne Wuensch from BMO Capital Markets. Please go ahead.

Joanne Wuensch -- BMO Capital Markets -- Analyst

Good morning and thank you for taking the question. I have two of them. The first one is, could you give us a little bit of a state of the union on your neuromodulation franchise? This year, you have sales of the WaveWriter SCS in the first place, DBS which is helping that along.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Sure. Just-- I'm sorry just -- broad comments on how we're dealing with SCS and DBS?

Joanne Wuensch -- BMO Capital Markets -- Analyst

Whatever you can share would be wonderful. Thank you.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Okay. Yeah I think, Maulik and our global team have done a very nice job. We've talked about WaveWriter for a while and its ability to have the diversity and flexibility of waveforms, paresthesia based and non-paresthesia based. And I think, really what we are seeing is the adoption of that and then the longer term clinical benefits. So we're seeing stronger reorder rates from current customers, as we continue to grab new physicians as well. So I think it's really the proven clinical outcomes that's driving the adoption at comfort level, and we continue to -- and try to improve the ease of use of training and programming, which we'll continue to do in 2019 to drive more adoption. Also, you've seen greater, outside the US, I hate that word, but greater adoption in Europe and in the Asian markets for our Spinal Cord Stim business.

DBS, we're early phases in the US. Europe is really the footprint there, the blueprint for the US. We have our new platforms approved in Europe and we're doing quite well there. And in Deep Brain Stimulation that should be a nice tailwind for us in '19 once we get our Directional Lead approved, which we expect likely by the end of this year or the first quarter. So DBS should be nice additional boost for us in '19. We will have some tougher comps for Spinal Cord Stim throughout '19, but the business has a lot of momentum.

Joanne Wuensch -- BMO Capital Markets -- Analyst

Thank you. And as my follow-up I want to shift a little bit to the Structural Heart franchise. In Europe, you've ACURATE in 30 centers. How do you think about now launching LOTUS into that market and into those centers? And then anything that you can share with us on how you plan on approaching the United States next year would be great. Thank you.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Yes. So Dr. Meredith can comment. We're pleased with our ACURATE performance and LOTUS coming back to market in Europe. A lot of physicians have broad experience in Europe with LOTUS prior to us pulling it off the market. And so there's a lot of enthusiasm for doctors to get LOTUS back in their hands. I was just over in Italy last week and it's very encouraging to hear you had many ACURATE users at this large conference in Italy. Many doctors who would use LOTUS before and they see -- some doctors see specific clinical areas by (inaudible) valves that they want to use LOTUS, some want to use it routinely. And so I think having the combination of both platforms gives us a unique competitive advantage. And then I think what you will see in -- particularly in the US and then a little more slowly in Europe is the support of Claret, the embolic protection. So that business and opportunity continues to grow. So I think offering physicians the uniqueness of both ACURATE and LOTUS with Claret positions us pretty well. So Dr. Meredith, do you have any comments there?

Ian T. Meredith -- Executive Vice President and Global Chief Medical Officer

I can't really (inaudible) but clearly are complementary and while they -- both valves could be a workhorse, there will be specific indications for the use of both. But, perhaps one thing I could add is that LOTUS will be an ideal valve for low volume users, just simply because that's completely reconditionable. So we see that the added advantage of LOTUS in low volume on new centers as well. So complementary strategy. Obviously, specific indications might peg one over the other, but in some cases better to have two than one.

Joanne Wuensch -- BMO Capital Markets -- Analyst

Thank you.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Thanks, Joanne.

Operator

Your next question comes from the line of Glenn Novarro from RBC Capital Markets. Please go ahead.

Glenn Novarro -- RBC Capital Markets. -- Analyst

Hi good morning guys. First question on ICD growth in the quarter, very strong, you called out S-ICD, you called out Resonate, there's also a replacement tailwind, but was there any one driver that stood out or did you -- did all three of those drivers equally contribute to the strong growth in the quarter. And then I had a follow-up.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Sure, they all contributed. The greatest contributions come from S-ICD and Resonate. And the tailwind from the replacement is kind of about a player. So the more significant contribution from the execution of the launches. I think S-ICD, and Dr. Stein can comment, it just continues to build momentum and I think more greater comfort level with physicians. We see that business really growing extremely well in Asia, Europe and in US as the clinical data continues to be strong and comfort level. So I think that's a good continued long-term competitive advantage for us with S-ICD. And I give the Joe and team a lot of credit for HeartLogic, that was a significant investment over multiple years. And I think it's positioned the Resonate platform to have a uniquely differentiated heart failure alert that we believe will perform significantly better than competitors' products that had previously been in the market, but quite frankly not used. And so we think this will be a very unique opportunity to reduce heart failure readmissions and to differentiate the Resonate beyond its longevity and other capabilities. Dr. Stein, any proven (ph) thoughts there?

Kenneth Stein -- M.D.

Thanks. Glenn, I would just sort of add maybe a little bit of color to what Mike said. Again S-ICD very clearly has increased comfort, particularly in the US. We did report results for the late breaker HRS earlier this year showing a significant reduction in appropriate shocks with our new SMART Pass filter technology. And those results I think have had an impact in increasing folks comfort using it, and in particular in Japan, we have been very pleased with the uptake of the device in that market. And in terms of heart failure and the Resonate launch, again, you are having the only FDA approved work system for early decompensation of heart failure is really getting us traction, and not just among our implanting physician community, but also in the referring physician community and particularly in the heart failure community and that's had a significant impact in enabling us to drive growth in our high-voltage devices.

Glenn Novarro -- RBC Capital Markets. -- Analyst

And then just as a follow-up, as you mentioned, across the board strength here in the third quarter with the only areas of weakness being US drug-eluting stents and pacemakers. But in your prepared remarks you highlighted a new drug-eluting stent launch, you highlighted new pacing launches. So as I think about 2019, can these businesses improve and can these businesses actually grow for you in 2019? Thanks

Michael F. Mahoney -- Chairman and Chief Executive Officer

Well, we will outline that quite a bit more in the coming months. I think the pacemaker piece should improve generally in '19 with new product launches and easier comps. And (inaudible) will be a little bit trickier in '19 with tougher comps, but we have a unique platform that we just talked about with our Resonate and S-ICD to continue to grow that. So I think broadly in '19, you will see CRM continue to grow above-market and a lot of companies say that, but we actually continue to do that in CRM. So I think that'll be good.

I think in DES, that's our toughest segment in terms of market, given the pricing pressure there, but it's a lead solution, will be a nice segmented offering, because what it enables us to do is offer customers who want better economics, a permanent polymer stent to match our two biggest competitors, global competitors. And then to further differentiate our SYNERGY bioabsorbable polymer at more of a premium. So it's a nice way for us to position better-class delivery system with SYNERGY with a durable polymer to match some of the competitive headwinds that we see in place. And then use that and then further differentiate SYNERGY a bit more. So I think it's a nice strategy. Hopefully, we'll see some improvement next year in the US.

Glenn Novarro -- RBC Capital Markets. -- Analyst

All right. Thanks, Mike.

Operator

Your next question comes from the line of Robbie Marcus from JPMorgan. Please go ahead.

Robert J. Marcus -- JPMorgan Securities LLC -- Analyst

Great. Thanks for taking the question. I was wondering if you could talk about the sustainability of urology. We saw mid-teens growth in Stone and high-single digits in Men's Health. That's well above the market. Maybe help us understand what's driving that and what are some of the product launches and dynamics that could help keep that where it is.

Michael F. Mahoney -- Chairman and Chief Executive Officer

Yes. Happy to do that. The urology business has a -- we have a lot of faith in it. First of all, we have a very strong leadership team there, globally, that delivers on their commitments and that's why we've trickled down with three acquisitions in that business this year. It's a -- I would say broadly, the demographics are very good. The ability for us to expand that business globally are significant and it's our least global business that we have in terms of the revenue mix and higher concentration in the U.S. I would start off with, we have a very strong team. I'd like to talk about the portfolio in a second. The international expansion efforts are likely the greatest of all the divisions at Boston in urology.

And then third, we just had a very, very strong innovation cadence in current pipeline. Just recently, in the last month, continue to advance our ability in stone retrieval with a combination of delivery platform, as well as the basket combined into one user interface. I'm blanking on the name of the new product, but the team continues to reinvent and innovate in Core Stone, through that device as well as our visualization capabilities. And those -- that uniqueness is driving pull through of the core business. And then you're seeing very strong additional new market entries with our NxThera BPH platform that complements our laser platform. We're very excited about Augmenix and the ability for us to leverage our commercial footprint and offer that platform to radiation oncologists, as well as the urologist. In the outpatient center, it's already reimbursed, a nice hefty approval. So I think, you're seeing just very strong core products, innovation in our core and these new adjacencies in global growth. And late-breaker news is the name of that product I was thinking of is LithoVue Empower.

Robert J. Marcus -- JPMorgan Securities LLC -- Analyst

Okay great. Coming out of TCT, there's a lot of excitement in the mitral valve, the tricuspid space. You have the Millipede device, which you're going to close on that transaction in early next year, if I'm not mistaken. Can you just maybe spend a minute on your strategy in mitral and tricuspid and help us understand maybe what's in the pipeline or is the scenario that we should see continued investment in externally. Thanks.

Michael F. Mahoney -- Chairman and Chief Executive Officer

I'll have Dr. Ian Meredith help me out on that one.

Ian T. Meredith -- Executive Vice President and Global Chief Medical Officer

Thanks very much. Obviously, mitral valve is very important for ageing community globally, increasing burden of heart failure, for the treatment of (inaudible) And we saw -- certainly saw those results of (inaudible) which actually fueled this. So, obviously, the first step to Millipede is to complete the current study, the requirements we've in the current study. And then to arrange a EFS study and concomitant CE Mark study, and then plan our US study strategy thereafter. This is a foundational element to Functional Mitral Regurgitation in any tricuspid valve platform. So you need a tool box to do this, as we say. It's not one tool box to treat all problems. So we see the (inaudible) foundational. Very good stand-alone treatment for Functional Mitral Regurgitation, but this also provides a basis for other therapies to be added on in the future as well.

Susan Lisa -- Vice President, Investor Relations

Greg, we will take one more please.

Operator

Your final question today comes from the line of Vijay Kumar from Evercore ISI. Please go ahead.

Vijay Kumar -- Evercore ISI -- Analyst

Hey, guys, congrats on nice quarter, and thanks for taking my question. Two really quick ones. One, at LOTUS, I didn't get the timeline for the launch in Europe, so if you could clarify that. And second, Dan, on EPS headwinds from FX, it looks like Street had mis-modeled on the FX headwinds. Would we be accurate in thinking versus Street models maybe FX is a little bit -- we should be modeling a little bit more headwinds into '19, just given where rates are? Thank you.

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Yes, I can take the FX (multiple speakers).

Michael F. Mahoney -- Chairman and Chief Executive Officer

Yes. The first one is easier, first quarter LOTUS Europe.

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Right. First quarter 2019 for LOTUS in Europe. And FX actually is pretty easy as well. And I think I hit part of this in the prepared remarks. For '19, if you look at where rates are today, if you kind of snap that line today with where rates are and where our hedging programs are, we would say it's neutral. So I would say, it's neutral for '19. Depending on where things go from now to then, we'll update you when we give guidance, but I think putting in neutral for now is probably a safe bet.

Vijay Kumar -- Evercore ISI -- Analyst

Thanks guys.

Susan Lisa -- Vice President, Investor Relations

With that, we'd like to conclude the call. Thanks for joining us today and appreciate your interest in Boston Scientific. Before you disconnect, Greg will give you all the pertinent details to the replay. Thanks, Greg.

Operator

Thank you. Ladies and gentlemen, this conference will be available for replay after 10:30 Eastern Time today through November 7. You may access the AT&T Teleconference replay system at any time by dialing 1-800-475-6701 and entering the access code 454018. International participants dial 320-365-3844. Those numbers once again are 1-800-475-6701 or 320-365-3844, with the access code 454018. That does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.

Duration: 62 minutes

Call participants:

Susan Lisa -- Vice President, Investor Relations

Michael F. Mahoney -- Chairman and Chief Executive Officer

Daniel J. Brennan -- Executive Vice President and Chief Financial Officer

Robert A. Hopkins -- Bank of America -- Analyst

David Lewis -- Morgan Stanley -- Analyst

Jason Mills -- Canaccord Genuity -- Analyst

Larry Biegelsen -- Wells Fargo -- Analyst

Joanne Wuensch -- BMO Capital Markets -- Analyst

Ian T. Meredith -- Executive Vice President and Global Chief Medical Officer

Glenn Novarro -- RBC Capital Markets. -- Analyst

Kenneth Stein -- M.D.

Robert J. Marcus -- JPMorgan Securities LLC -- Analyst

Vijay Kumar -- Evercore ISI -- Analyst

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