Boston Scientific to cut jobs after discontinuing heart device

Boston Scientific will eliminate jobs after discontinuing global sales of its Acurate aortic valve replacement systems that treat the heart failure-causing condition aortic stenosis, the medtech company with a large cardiology presence in Minnesota said Wednesday.

The company is ending its pursuit of Food and Drug Administration approval for its Acurate family of valves in the United States, a spokesperson said, citing "discussions with regulators which resulted in increased clinical and regulatory requirements to maintain approvals in global markets and to obtain approval in new markets."

The spokesperson recommended patients who already have Acurate valves continue routine follow-up care.

Boston Scientific paid more than $400 million to acquire the maker of the valves in 2017.

The decision to end the program will lead to job reductions. To reduce that impact, Boston Scientific is focused on redeploying team members "to priority programs and manufacturing areas across the company," the spokesperson said.

The discontinuation comes after Boston Scientific revealed in October that its Acurate neo2 device failed to meet "non-inferiority criteria," an important benchmark followed by regulators. At Bernstein's Annual Strategic Decisions Conference on Wednesday, CEO Mike Mahoney called the discontinuation "disappointing."

"We really tried, but it's the right decision based on increased requirements that the regulatory agencies have asked us to do in [the] E.U. to keep it on the market, and there wasn't a clear path that made sense in the U.S.," Mahoney said.

The spokesperson said the company does not expect to communicate the number of roles eliminated and did not comment on where they are based.

The market for transcatheter aortic valve replacement, often called TAVR, is mature and very large, Mahoney said on a call with investors last year. Unlike traditional heart valves, which require open-chest surgery, transcatheter valves are implanted using thin tubes known as catheters that run from a small puncture in the blood vessel to the heart.

Companies such as Medtronic in Minnesota and Edwards Lifesciences in California make the system treating the condition reducing blood flow from the heart to the body.

A clinical trial funded by Boston Scientific published in the Lancet with 1,500 patients with symptomatic severe aortic stenosis showed that the group of trial participants who underwent the ACURATE neo2 procedure experienced "significantly higher" rates of mortality, stroke and rehospitalization compared with a control group implanted with the Edwards and Medtronic devices.

Boston Scientific's stock closed down 1.6% Wednesday, while both Medtronic and Edwards shares moved slightly higher.

In 2017, Boston Scientific announced it was acquiring Switzerland-based Symetis SA, which made the Acurate system, for $435 million in cash. The acquisition came shortly after recalls and sales pauses marred the company's Lotus system trying to break into market.

Boston Scientific cut 106 jobs after announcing in November 2020 it was winding down the Lotus program due to issues with the device delivering the valve. Engineers, analysts, sales reps, managers and others at the company's Maple Grove plant lost the jobs.

Mahoney said at the Bernstein conference that conversations with regulators about Acurate resulted in increased clinical and regulatory requirements to maintain approvals in global markets and gain approvals in new regions. The investments and additional resources needed to satisfy these requirements would have been prohibitive, Mahoney said.

Now, commercial, clinical, research and development as well as manufacturing activity related to Acurate will stop, the spokesperson said.

Boston Scientific still expects to meet its recently lifted sales guidance, Mahoney said, due to "the strength of the company."

Tariffs are starting to bend the company's way, Mahoney said after negotiations between the White House and the European Union pleased investors.

"There'll be some minor puts and takes: with tariffs maybe hopefully an upside and slight downside with Acurate," Mahoney said.