Boston Scientific expands neurostim portfolio with $3.7B deal to buy Axonics

Boston Scientific announced a deal on Monday to acquire Axonics for $3.7 billion, gaining access to the company's neuromodulation systems for treating urinary and bowel dysfunction. Boston Scientific will pay $71 in cash per share, representing a 23.3% premium to Axonics' closing share price of $57.57 on Friday. 

Meghan Scanlon, president of urology at Boston Scientific, said the deal marks the company's "entry into sacral neuromodulation, a high-growth adjacency with opportunities to expand access to care for patients."

Axonics, whose shares surged almost 20% on the news, markets the FDA-cleared Axonics F15 and fourth-generation Axonics R20 systems, which deliver electrical pulses to the sacral nerve to restore communication between a patient's brain and bladder. The company's portfolio also includes the Bulkamid urethral bulking system for women with stress urinary incontinence.

Axonics expects its net revenue to reach $366.1 million in 2023, reflecting a 34% increase compared to its previous fiscal year. The deal isn't anticipated to materially impact Boston Scientific's 2024 adjusted earnings per share, but will be accretive thereafter.

'Home run' deal

Evercore ISI analyst Vijay Kumar called the deal a "home run," noting the acquisition "makes sense given Boston Scientific's sizable position with urology and the channel synergies." Analyst Matt Henriksson of Bloomberg Intelligence said the company is "poised for more growth with elective surgeries likely returning to pre-pandemic levels." 

The transaction, which was unanimously approved by both company boards, is expected to close in the first half of the year. In September, Boston Scientific inked a deal to purchase chronic back pain therapy developer Relievant Medsystems for an upfront cash payment of $850 million. 

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