WEBVTT 00:00:00.000 --> 00:00:01.820 All right, let's dive in. Interventional medicine. 00:00:02.120 --> 00:00:05.139 It's really it's this quiet revolution in health 00:00:05.139 --> 00:00:07.160 care, isn't it? It really is. And I think there's 00:00:07.160 --> 00:00:09.160 a common misconception about what it actually 00:00:09.160 --> 00:00:12.160 is. Right. When you hear that term, your mind 00:00:12.160 --> 00:00:15.080 probably jumps to, I don't know, microscopic 00:00:15.080 --> 00:00:18.100 robots or some kind of futuristic surgery. Sci 00:00:18.100 --> 00:00:22.120 -fi stuff. Exactly. But in reality, it all just 00:00:22.120 --> 00:00:24.760 comes down to these. brilliantly engineered tiny 00:00:24.760 --> 00:00:27.600 devices. Things like steerable catheters, flexible 00:00:27.600 --> 00:00:30.359 stents. Sophisticated implants, yeah. These are 00:00:30.359 --> 00:00:32.640 the tools that let doctors make, I mean, life 00:00:32.640 --> 00:00:35.520 -saving repairs without the trauma of, you know, 00:00:35.579 --> 00:00:38.240 open surgery. And these tools are the absolute 00:00:38.240 --> 00:00:41.380 foundation of modern, minimally invasive care. 00:00:42.560 --> 00:00:44.479 Behind a massive portion of this whole industry 00:00:44.479 --> 00:00:47.039 stands one of the true titans. The Boston Scientific 00:00:47.039 --> 00:00:49.859 Corporation. Exactly. And when we talk about 00:00:49.859 --> 00:00:51.140 the companies that have built this revolution, 00:00:51.359 --> 00:00:53.060 we're not just talking about science. We're talking 00:00:53.060 --> 00:00:55.619 about high stakes corporate strategy, relentless 00:00:55.619 --> 00:00:59.420 innovation and, well, often extremely intense 00:00:59.420 --> 00:01:02.280 legal and competitive controversy. So for this 00:01:02.280 --> 00:01:04.519 deep dive, we're taking the sources shared by 00:01:04.519 --> 00:01:06.959 the listener and we're going to trace the surprising 00:01:06.959 --> 00:01:10.659 and sometimes pretty turbulent journey of Boston 00:01:10.659 --> 00:01:13.799 Scientific Corporation. or BSC. Our source material 00:01:13.799 --> 00:01:17.200 really does paint a fascinating picture of this 00:01:17.200 --> 00:01:21.379 U .S.-based multinational medical device giant. 00:01:21.659 --> 00:01:24.349 So our mission today... is to follow its trajectory 00:01:24.349 --> 00:01:27.390 from, and this is amazing, an almost grassroots 00:01:27.390 --> 00:01:30.609 experimental company operating out of a church 00:01:30.609 --> 00:01:32.930 basement. I love that detail. Right. Into the 00:01:32.930 --> 00:01:35.829 multi -billion dollar S &P 500 powerhouse it 00:01:35.829 --> 00:01:38.489 is today. We'll be exploring the seminal breakthroughs, 00:01:38.510 --> 00:01:41.950 analyzing its relentlessly aggressive growth 00:01:41.950 --> 00:01:44.049 strategy. Which is all about acquisitions. All 00:01:44.049 --> 00:01:46.049 about acquisitions. And we'll also detail the 00:01:46.049 --> 00:01:48.569 staggering high stakes legal and corporate integrity 00:01:48.569 --> 00:01:50.730 battles that have become a recurring feature 00:01:50.730 --> 00:01:53.120 of its modern history. And to anchor this whole 00:01:53.120 --> 00:01:54.879 conversation, I think you need to appreciate 00:01:54.879 --> 00:01:57.879 the scale of this enterprise today. I mean, right 00:01:57.879 --> 00:02:00.200 now. OK, let's lay it out. Boston Scientific 00:02:00.200 --> 00:02:03.480 was founded on June 29, 1979. So that makes it 00:02:03.480 --> 00:02:06.140 46 years old this year. It started in Watertown, 00:02:06.219 --> 00:02:08.639 Massachusetts, before moving to its current headquarters 00:02:08.639 --> 00:02:11.319 in Marlborough. And the numbers that define its 00:02:11.319 --> 00:02:14.539 position in 2024, they're just immense. This 00:02:14.539 --> 00:02:17.080 is a company with annual revenue clocking in 00:02:17.080 --> 00:02:22.870 at a staggering 16 .75. billion. Wow. And they 00:02:22.870 --> 00:02:25.949 employ approximately 53 ,000 people across the 00:02:25.949 --> 00:02:27.770 globe. And of course, they're listed on the New 00:02:27.770 --> 00:02:30.509 York Stock Exchange ticker as BSX. And they're 00:02:30.509 --> 00:02:33.009 a component of the S &P 500 index. So what you 00:02:33.009 --> 00:02:35.229 have here is a company that provides absolutely 00:02:35.229 --> 00:02:38.090 essential tools. I mean, life -saving and life 00:02:38.090 --> 00:02:40.229 -improving procedures across a huge range of 00:02:40.229 --> 00:02:42.990 specialties. Like what? Oh, interventional cardiology, 00:02:43.250 --> 00:02:45.629 neurovascular intervention, gastroenterology, 00:02:45.870 --> 00:02:48.430 urology, oncology. I mean, the list goes on. 00:02:48.490 --> 00:02:51.150 They are truly embedded in modern medicine. But, 00:02:51.150 --> 00:02:53.090 and this is the... core of the story we're unpacking, 00:02:53.090 --> 00:02:55.449 this immense success was bought at a very, very 00:02:55.449 --> 00:02:57.909 high price. We're talking about massive patent 00:02:57.909 --> 00:03:00.689 wars, really complex integrations of other companies, 00:03:00.789 --> 00:03:03.550 and some profound safety liabilities. Okay. So 00:03:03.550 --> 00:03:05.389 let's unpack all of this. We have to start at 00:03:05.389 --> 00:03:07.569 the beginning. The genesis of interventional 00:03:07.569 --> 00:03:10.430 medicine and the, well, the surprising origins 00:03:10.430 --> 00:03:12.840 of this future corporation. The story really 00:03:12.840 --> 00:03:16.039 begins even before that 1979 incorporation date. 00:03:16.300 --> 00:03:18.759 Boston Scientific was formed as a holding company, 00:03:19.060 --> 00:03:23.319 but the real conceptual foundation came from 00:03:23.319 --> 00:03:26.919 a preceding entity, a company called Meditech 00:03:26.919 --> 00:03:30.080 Inc. And this structure, this holding company 00:03:30.080 --> 00:03:32.340 structure, allowed them to position themselves 00:03:32.340 --> 00:03:36.060 specifically for growth in what was then a radically 00:03:36.060 --> 00:03:38.159 new field. Interventional medicine. Exactly. 00:03:38.199 --> 00:03:41.069 The who's behind Meditech. The creative force 00:03:41.069 --> 00:03:44.729 was a Czech -born emigre named Itzhak Bentov. 00:03:45.030 --> 00:03:47.250 He's described in the sources as this really 00:03:47.250 --> 00:03:50.069 eclectic engineer. He started a contract research 00:03:50.069 --> 00:03:52.789 company back in 1965, initially with a partner, 00:03:52.949 --> 00:03:55.569 Dan Singer. And what's amazing is the context. 00:03:56.030 --> 00:03:58.389 Bentov had worked at the prestigious Arthur D. 00:03:58.469 --> 00:04:00.770 Little think tank in Cambridge, a very corporate 00:04:00.770 --> 00:04:02.969 setting. Right. But he ran his first research 00:04:02.969 --> 00:04:05.069 operations literally out of his rented house 00:04:05.069 --> 00:04:07.210 in Belmont, Massachusetts. Out of his house. 00:04:07.289 --> 00:04:08.990 Out of his house. It is the ultimate grassroots. 00:04:09.259 --> 00:04:12.759 start for what would become a $16 billion company. 00:04:13.120 --> 00:04:15.639 That's incredible. So this humble beginning quickly 00:04:15.639 --> 00:04:18.600 led to the company's, what, its big breakthrough? 00:04:18.779 --> 00:04:21.459 Yeah. Aha moment. That's it. The invention that 00:04:21.459 --> 00:04:24.959 would really define their future. In 1967, Bentov 00:04:24.959 --> 00:04:27.720 was approached by radiologists at Boston's Beth 00:04:27.720 --> 00:04:29.980 Israel Hospital. And they had a problem for him 00:04:29.980 --> 00:04:33.040 to solve. A huge, complex challenge. They needed 00:04:33.040 --> 00:04:35.620 a way to navigate the human vascular system without 00:04:35.620 --> 00:04:39.279 surgery. They asked Bentov to design a steerable, 00:04:39.399 --> 00:04:41.879 remotely controlled catheter. Okay, you have 00:04:41.879 --> 00:04:44.079 to think about how difficult that request would 00:04:44.079 --> 00:04:47.300 have been in 1967. They're not just asking for 00:04:47.300 --> 00:04:49.860 a simple tube. Yeah. They need a device you can 00:04:49.860 --> 00:04:52.560 insert through a tiny incision, navigate through... 00:04:52.560 --> 00:04:54.759 the labyrinth of the body's vessels, probably 00:04:54.759 --> 00:04:57.300 using external controls, and then position it 00:04:57.300 --> 00:04:59.839 precisely. That is groundbreaking engineering. 00:05:00.259 --> 00:05:02.459 And it was a material science problem just as 00:05:02.459 --> 00:05:04.860 much as an engineering one. You needed polymers 00:05:04.860 --> 00:05:06.779 that were flexible enough to make tight turns, 00:05:06.920 --> 00:05:09.860 but also rigid enough not to collapse. And biocompatible, 00:05:09.899 --> 00:05:12.980 of course. Of course. It took two years of intense 00:05:12.980 --> 00:05:16.120 work, refining polymer compounds, building prototype 00:05:16.120 --> 00:05:19.459 after prototype. But by 1969, they released the 00:05:19.459 --> 00:05:22.269 new steerable angiography catheter. and that 00:05:22.269 --> 00:05:25.629 single device. The steerable catheter, you could 00:05:25.629 --> 00:05:28.329 argue it's the foundational technology for all 00:05:28.329 --> 00:05:31.269 of modern, less invasive medicine. I think you're 00:05:31.269 --> 00:05:33.689 right. It wasn't just a product. It was a total 00:05:33.689 --> 00:05:37.170 paradigm shift. It proved that complex internal 00:05:37.170 --> 00:05:40.629 diagnosis and even treatment could be done remotely. 00:05:41.009 --> 00:05:43.449 Paving the way for the entire interventional 00:05:43.449 --> 00:05:45.629 device market that we see today. And a breakthrough 00:05:45.629 --> 00:05:48.470 like that, it attracts crucial business talent. 00:05:48.689 --> 00:05:52.389 In 1969, a man named John Abel joined the small 00:05:52.389 --> 00:05:54.800 operation. And he saw the potential. He saw the 00:05:54.800 --> 00:05:57.579 immense potential. He secured an option to buy 00:05:57.579 --> 00:05:59.899 into the company, which he then exercised a year 00:05:59.899 --> 00:06:02.500 later, and he brought in Cooper Labs as a financial 00:06:02.500 --> 00:06:05.259 partner. Okay, so this is when things start to 00:06:05.259 --> 00:06:07.339 get a bit more corporate, a bit more structured. 00:06:07.579 --> 00:06:10.879 A little bit. But Abel's initial office was still 00:06:10.879 --> 00:06:13.480 charmingly unconventional. When he joined, the 00:06:13.480 --> 00:06:15.680 technical operations were still being run out 00:06:15.680 --> 00:06:18.480 of Bentov's lab. Which was where, again? In the 00:06:18.480 --> 00:06:20.879 basement of a Catholic church rectory in Belmont. 00:06:21.040 --> 00:06:23.329 You're kidding me. A church. basement. That's 00:06:23.329 --> 00:06:25.709 one of those details that just contrasts so sharply 00:06:25.709 --> 00:06:28.529 with the sleek corporate entity they would become. 00:06:28.850 --> 00:06:31.870 It's amazing. So after Abel's investment, they 00:06:31.870 --> 00:06:33.930 finally moved the operations to a more traditional 00:06:33.930 --> 00:06:36.430 setting in Watertown, Massachusetts. And this 00:06:36.430 --> 00:06:38.389 is where the real corporate partnership forms, 00:06:38.389 --> 00:06:40.930 right? This is the moment. The transition from 00:06:40.930 --> 00:06:43.410 a promising lab to a corporate titan happened 00:06:43.410 --> 00:06:46.720 when Abel met Pete Nicholas. They lived in the 00:06:46.720 --> 00:06:48.480 same neighborhood in Concord, Massachusetts, 00:06:48.620 --> 00:06:50.959 and they discovered they had these perfectly 00:06:50.959 --> 00:06:54.500 complementary skills. Abel was the technological 00:06:54.500 --> 00:06:57.699 visionary. He was focused on the potential of 00:06:57.699 --> 00:07:01.279 non -invasive surgery, the instrumentation. Nicholas, 00:07:01.420 --> 00:07:04.069 on the other hand... He was the enterprise builder. 00:07:04.290 --> 00:07:07.850 He focused on finance, strategy, and rapid execution. 00:07:08.250 --> 00:07:10.350 The vision and the execution, that partnership, 00:07:10.509 --> 00:07:13.050 that synergy, that had to be the genuine catalyst. 00:07:13.350 --> 00:07:15.670 It was. They gathered backers from the Boston 00:07:15.670 --> 00:07:17.949 financial community. They bought out Cooper Labs' 00:07:18.149 --> 00:07:21.269 interest. And then in 1979, they officially formed 00:07:21.269 --> 00:07:24.209 the new holding corporation, Boston Scientific. 00:07:24.649 --> 00:07:27.350 And from that moment on, the strategy was clear. 00:07:27.709 --> 00:07:30.110 Immediately focused on diversification through 00:07:30.110 --> 00:07:33.310 acquisition. The first wave of expansion in the 00:07:33.310 --> 00:07:36.089 1980s was all about building a comprehensive 00:07:36.089 --> 00:07:39.430 product portfolio as quickly as possible. Moving 00:07:39.430 --> 00:07:42.230 beyond just catheters. Way beyond. Less than 00:07:42.230 --> 00:07:44.790 a year after they formally incorporated, they 00:07:44.790 --> 00:07:47.990 acquired a company called Kim Ray Medical Associates. 00:07:48.129 --> 00:07:50.750 Which they then reorganized into Mansfield Scientific. 00:07:51.439 --> 00:07:54.120 That was a brilliant move because it instantly 00:07:54.120 --> 00:07:57.139 added devices like vena cava filters and cardiac 00:07:57.139 --> 00:08:00.019 output computers to their line. Right. It signaled 00:08:00.019 --> 00:08:01.660 they weren't just a catheter company anymore. 00:08:01.720 --> 00:08:03.439 They were becoming an interventional solutions 00:08:03.439 --> 00:08:06.720 provider. And they moved fast. Very fast. In 00:08:06.720 --> 00:08:09.899 1981, they acquired Endotech, which they renamed 00:08:09.899 --> 00:08:13.519 Microvasive Inc. And what did that do? That thrust 00:08:13.519 --> 00:08:16.500 them directly into the gastrointestinal and pulmonary 00:08:16.500 --> 00:08:19.480 specialties. It moved their core technology into 00:08:19.480 --> 00:08:21.920 completely new bodily systems. And then a few 00:08:21.920 --> 00:08:25.379 years later, urology. Exactly. In 1988, they 00:08:25.379 --> 00:08:27.920 acquired Vantech, establishing a solid foothold 00:08:27.920 --> 00:08:29.899 in the urology market. So if you look at that 00:08:29.899 --> 00:08:32.639 decade, the 80s, it's a systematic blueprint 00:08:32.639 --> 00:08:36.779 for domination. It really is. Identify a high 00:08:36.779 --> 00:08:40.179 growth niche interventional field, acquire the 00:08:40.179 --> 00:08:42.840 leading specialist in that space, and then integrate 00:08:42.840 --> 00:08:45.460 their pipeline. This strategy wasn't about slow 00:08:45.460 --> 00:08:48.500 internal R &D. It was about aggressive external 00:08:48.500 --> 00:08:51.120 consolidation from day one. And that consolidation 00:08:51.120 --> 00:08:54.980 really peaked on December 31st, 1988. Mansfield 00:08:54.980 --> 00:08:57.980 Scientific, Microvasive, and the original Meditech 00:08:57.980 --> 00:09:01.639 were all formally merged into one single unified 00:09:01.639 --> 00:09:04.679 entity. Boston Scientific. And that move prepared 00:09:04.679 --> 00:09:07.580 them for the global stage and the, well, the 00:09:07.580 --> 00:09:09.940 dramatic acceleration of the 1990s. Which brings 00:09:09.940 --> 00:09:12.940 us directly into part two, the era of rapid acceleration, 00:09:13.299 --> 00:09:15.519 the rise of the stint, and the start of these 00:09:15.519 --> 00:09:18.080 truly massive high stakes corporate maneuvers 00:09:18.080 --> 00:09:20.250 that define their future. Their entry onto the 00:09:20.250 --> 00:09:21.990 global financial stage was, of course, their 00:09:21.990 --> 00:09:24.970 1992 initial public offering. The IPO. On May 00:09:24.970 --> 00:09:29.669 19, 1992, BSC launched its IPO, offering 23 .5 00:09:29.669 --> 00:09:32.070 million shares, split between U .S. and international 00:09:32.070 --> 00:09:35.230 offerings. This was huge. It opened at $17 a 00:09:35.230 --> 00:09:38.210 share and represented 23 % of Boston Scientific's 00:09:38.210 --> 00:09:41.490 total outstanding stock. And you had major financial 00:09:41.490 --> 00:09:44.470 players involved. The underwriters included Goldman 00:09:44.470 --> 00:09:47.990 Sachs & Co. and Payne Webber Inc. And notably, 00:09:48.190 --> 00:09:51.870 Abbott Laboratories held a significant 20 % stake 00:09:51.870 --> 00:09:54.090 in the company at the time. Right. Which really 00:09:54.090 --> 00:09:56.169 underscores the confidence the medical establishment 00:09:56.169 --> 00:09:58.429 already had in their potential. What was the 00:09:58.429 --> 00:10:00.529 initial market cap on that? It was substantial, 00:10:00.750 --> 00:10:04.629 about $1 .6 billion, which if you factor in inflation 00:10:04.629 --> 00:10:07.750 is equivalent to roughly $3 .6 billion in today's 00:10:07.750 --> 00:10:10.549 money. So that IPO was the definitive moment. 00:10:10.750 --> 00:10:13.029 They transitioned from a regional specialist 00:10:13.029 --> 00:10:17.440 to a serious cash rich. global contender. And 00:10:17.440 --> 00:10:20.620 post IPO, armed with all that capital, the acquisition 00:10:20.620 --> 00:10:23.740 strategy went from strategic to just relentless. 00:10:23.940 --> 00:10:26.600 Especially between 95 and 97. That's the key 00:10:26.600 --> 00:10:29.460 period. They used this money to aggressively 00:10:29.460 --> 00:10:31.720 increase their R &D footprint and their product 00:10:31.720 --> 00:10:34.220 offerings through massive strategic purchases. 00:10:34.600 --> 00:10:35.980 And they weren't just buying small specialty 00:10:35.980 --> 00:10:38.419 shops anymore. No, they were buying deep technology. 00:10:38.679 --> 00:10:41.320 They acquired cardiovascular imaging systems, 00:10:41.419 --> 00:10:43.820 which immediately gave them crucial intravascular 00:10:43.820 --> 00:10:47.460 ultrasound capabilities. So that's allowing doctors 00:10:47.460 --> 00:10:50.779 to actually see inside the arteries. Using sound 00:10:50.779 --> 00:10:53.360 waves from a catheter tip. Exactly. It's cutting 00:10:53.360 --> 00:10:55.960 -edge diagnostics linked directly to their treatment 00:10:55.960 --> 00:10:59.639 devices. They also bought SIMED, expanding their 00:10:59.639 --> 00:11:02.740 core cardiovascular business, Vesica Medical 00:11:02.740 --> 00:11:06.259 for Urology. And EP Technologies, which was focused 00:11:06.259 --> 00:11:09.559 on cardiac ablation controllers. This was systematic 00:11:09.559 --> 00:11:12.059 vertical integration. They were trying to own 00:11:12.059 --> 00:11:14.820 the entire patient journey for specific treatments. 00:11:14.899 --> 00:11:17.809 That's the goal. But rapid multinational growth 00:11:17.809 --> 00:11:20.450 always brings complexity. And we see an early 00:11:20.450 --> 00:11:23.490 difficulty surface in 1998. What happened? Boston 00:11:23.490 --> 00:11:25.649 Scientific was forced to restate its financial 00:11:25.649 --> 00:11:28.070 results for 1997 and the first three quarters 00:11:28.070 --> 00:11:32.210 of 98. The reason given was, let's say euphemistically, 00:11:32.450 --> 00:11:36.090 business irregularities in their Japanese subsidiary. 00:11:36.129 --> 00:11:39.950 An early, very public signal that high speed 00:11:39.950 --> 00:11:42.669 global integration comes with some significant 00:11:42.669 --> 00:11:44.929 oversight challenges. For sure. And moving into 00:11:44.929 --> 00:11:47.320 the early. 2000s, the acquisitions became not 00:11:47.320 --> 00:11:49.659 just frequent but astronomically high value. 00:11:49.820 --> 00:11:52.240 Like the Target Therapeutics deal in 2001. Right. 00:11:52.340 --> 00:11:55.279 They acquired Target, a leader in specialized 00:11:55.279 --> 00:11:59.679 neurology devices, for about $1 .1 billion. It's 00:11:59.679 --> 00:12:01.580 worth pausing on that transaction because the 00:12:01.580 --> 00:12:03.860 number itself is almost misleadingly simple. 00:12:04.100 --> 00:12:07.779 How so? That $1 .1 billion purchase price was 00:12:07.779 --> 00:12:10.299 more than 10 times Target's total annual sales 00:12:10.299 --> 00:12:13.559 revenue. 10 times sales, not earnings. Sales. 00:12:13.720 --> 00:12:16.549 That is a valuation premium that just screams 00:12:16.549 --> 00:12:20.049 confidence or maybe desperation to secure a technological 00:12:20.049 --> 00:12:23.450 lead. Industry norms are often around 10 times 00:12:23.450 --> 00:12:26.009 earnings. So what was so crucial about Target's 00:12:26.009 --> 00:12:28.610 neurology pipeline that justified paying that 00:12:28.610 --> 00:12:31.669 enormous cost? It signaled to the entire market. 00:12:32.029 --> 00:12:34.289 especially to rivals like Johnson & Johnson and 00:12:34.289 --> 00:12:36.769 Medtronic, that Boston Scientific was willing 00:12:36.769 --> 00:12:39.070 to pay a massive premium. Oh, you know, a war 00:12:39.070 --> 00:12:41.629 tax, basically. To acquire critical tech pipelines 00:12:41.629 --> 00:12:44.409 and establish a dominant market position. Exactly. 00:12:44.649 --> 00:12:46.649 In nascent fields like neurovascular intervention, 00:12:47.049 --> 00:12:50.250 they were prioritizing future high -growth, high 00:12:50.250 --> 00:12:52.450 -risk assets over traditional valuation metrics. 00:12:52.730 --> 00:12:54.690 They were buying dominance, not just revenue. 00:12:54.970 --> 00:12:57.570 And they kept up that high -value spending spree. 00:12:58.039 --> 00:13:01.320 In 2004, they acquired Advanced Bionics Corporation 00:13:01.320 --> 00:13:06.100 for $740 million in cash plus earnouts. Gaining 00:13:06.100 --> 00:13:08.519 technology and neurostimulation. And that same 00:13:08.519 --> 00:13:10.879 year, they acquired Advanced Stent Technologies 00:13:10.879 --> 00:13:14.440 for $120 million in stock, gaining crucial specialized 00:13:14.440 --> 00:13:17.200 stent systems. But the real driver of their revenue 00:13:17.200 --> 00:13:20.320 and the market collision was their flagship product 00:13:20.320 --> 00:13:22.500 that they developed internally. The Taxis Stent. 00:13:22.600 --> 00:13:24.700 The Taxis Stent. This is a drug -eluting standard, 00:13:24.919 --> 00:13:28.590 DES, used to open clogged arteries. And crucially, 00:13:28.690 --> 00:13:31.149 it released medication directly into the vessel 00:13:31.149 --> 00:13:34.149 wall. To prevent restenosis. Exactly. The recurring 00:13:34.149 --> 00:13:36.370 problem where the artery re -narrows after the 00:13:36.370 --> 00:13:38.509 stent is placed. And the Taxa stent became a 00:13:38.509 --> 00:13:40.690 commercial phenomenon. It was approved in Europe 00:13:40.690 --> 00:13:43.690 in 2003 and then got that crucial FDA approval 00:13:43.690 --> 00:13:46.690 in the U .S. in March 2004. Which made it only 00:13:46.690 --> 00:13:48.889 the second drug -eluting stent approved in the 00:13:48.889 --> 00:13:51.710 country, right behind J &J's Cypher stent. Right. 00:13:51.769 --> 00:13:54.870 And that placed BSC at the very heart of the 00:13:54.870 --> 00:13:57.590 most lucrative and fear - competitive technological 00:13:57.590 --> 00:14:00.629 battle in interventional cardiology. Which naturally 00:14:00.629 --> 00:14:03.289 brings us to what is arguably the single most 00:14:03.289 --> 00:14:06.350 defining and chaotic moment in BSC's history. 00:14:06.529 --> 00:14:10.129 The Guidant merger of 2006. This was a corporate 00:14:10.129 --> 00:14:12.750 showdown for the ages. Guidant was a major rival. 00:14:12.950 --> 00:14:14.970 Especially strong in rhythm management devices 00:14:14.970 --> 00:14:17.470 like pacemakers and defibrillators. So in January 00:14:17.470 --> 00:14:20.990 2006, BSC launched an aggressive offer for Guidant, 00:14:21.070 --> 00:14:24.649 initially valuing them at $25 billion or $72 00:14:24.649 --> 00:14:27.159 a share. And that offer was initially rejected, 00:14:27.419 --> 00:14:30.340 which set off this complex public bidding war. 00:14:30.519 --> 00:14:33.440 BSE persisted, and the final acquisition was 00:14:33.440 --> 00:14:37.220 completed on April 21, 2006, for a staggering 00:14:37.220 --> 00:14:41.940 $27 .2 billion. A colossal bet. And the deal 00:14:41.940 --> 00:14:44.220 structure was complicated. It required Guidant 00:14:44.220 --> 00:14:46.519 to be split primarily between Boston Scientific 00:14:46.519 --> 00:14:48.919 and Abbott Laboratories. But that acquisition 00:14:48.919 --> 00:14:51.399 instantly cemented Boston Scientific's position 00:14:51.399 --> 00:14:54.100 as a powerhouse, especially in electrophysiology 00:14:54.100 --> 00:14:56.299 and rhythm management. It effectively eliminated 00:14:56.299 --> 00:14:58.419 one of their largest competitors in one move. 00:14:58.600 --> 00:15:01.220 But... integrating a rival of that scale at that 00:15:01.220 --> 00:15:03.899 cost. Yeah. That is never a clean process. No. 00:15:04.059 --> 00:15:06.200 The sources show that just four years later, 00:15:06.279 --> 00:15:09.659 in 2010, Boston Scientific eliminated 1 ,300 00:15:09.659 --> 00:15:12.960 jobs when it moved to rationalize and consolidate 00:15:12.960 --> 00:15:15.419 the heart rhythm business it had acquired from 00:15:15.419 --> 00:15:18.360 Guidant. And that specific detail, 1 ,300 people 00:15:18.360 --> 00:15:21.200 laid off, it really underscores the immense financial 00:15:21.200 --> 00:15:24.019 pressure and the operational difficulty involved 00:15:24.019 --> 00:15:26.860 in absorbing two massive overlapping corporate 00:15:26.860 --> 00:15:29.590 cultures. It was a massive win for market share, 00:15:29.750 --> 00:15:32.669 but it came with significant human and financial 00:15:32.669 --> 00:15:34.990 friction during the integration. So the Guyton 00:15:34.990 --> 00:15:37.750 merger really solidified this aggressive M &A 00:15:37.750 --> 00:15:40.700 playbook. And post -guident, the consistent use 00:15:40.700 --> 00:15:43.100 of large -scale acquisitions to dominate specific 00:15:43.100 --> 00:15:46.860 niche fields just became BSC's permanent operational 00:15:46.860 --> 00:15:49.600 blueprint. Absolutely. Let's run through some 00:15:49.600 --> 00:15:51.759 of the most impactful post -guident deals, starting 00:15:51.759 --> 00:15:53.799 with their continual expansion in cardiac and 00:15:53.799 --> 00:15:56.820 electrophysiology. In 2012, they acquired Cameron 00:15:56.820 --> 00:16:00.659 Health for a total sum of $1 .3 billion. This 00:16:00.659 --> 00:16:03.460 was crucial because it secured the emblem's subcutaneous 00:16:03.460 --> 00:16:07.360 implantable defibrillator, the SICD. The SICD 00:16:07.360 --> 00:16:09.889 is a true - innovation. It's a defibrillator 00:16:09.889 --> 00:16:12.710 that sits just under the skin. outside the rib 00:16:12.710 --> 00:16:15.129 cage instead of having leads implanted directly 00:16:15.129 --> 00:16:17.269 into the heart muscle. Right, which makes the 00:16:17.269 --> 00:16:19.970 procedure far less invasive and reduces a lot 00:16:19.970 --> 00:16:21.789 of the complications that are associated with 00:16:21.789 --> 00:16:24.110 transvenous leads. So that acquisition brought 00:16:24.110 --> 00:16:26.990 a genuine step change device into their portfolio. 00:16:27.330 --> 00:16:29.970 Later that same year, they acquired Rhythmia 00:16:29.970 --> 00:16:33.350 Medical, which specialized in advanced 3D mapping 00:16:33.350 --> 00:16:35.789 and navigation methods. Absolutely crucial for 00:16:35.789 --> 00:16:38.169 precision in cardiac ablation procedures. Right. 00:16:38.570 --> 00:16:41.389 And then a year later, 2013, they bought the 00:16:41.389 --> 00:16:43.769 electrophysiology business of C .R. Bard Bard 00:16:43.769 --> 00:16:48.009 EP for $275 million, further cementing their 00:16:48.009 --> 00:16:50.110 dominance in the rhythm management tech they 00:16:50.110 --> 00:16:52.230 got from Guidant. And the speed just hasn't slowed 00:16:52.230 --> 00:16:54.909 down recently. 2021 was an exceptionally active 00:16:54.909 --> 00:16:57.330 year for them. It was. They acquired Ferrapulse, 00:16:57.549 --> 00:17:00.090 a startup focusing on pulse field ablation technology, 00:17:00.450 --> 00:17:03.110 a really cutting edge method for treating arrhythmias. 00:17:03.289 --> 00:17:05.690 They bought the 73 % of the company they didn't 00:17:05.690 --> 00:17:07.829 already own. And they also acquired Bayless. 00:17:07.880 --> 00:17:11.380 medical company for $1 .75 billion, significantly 00:17:11.380 --> 00:17:13.980 expanding their electrophysiology and structural 00:17:13.980 --> 00:17:16.619 heart portfolios. And this strategy isn't just 00:17:16.619 --> 00:17:19.000 restricted to cardiology. They advanced their 00:17:19.000 --> 00:17:21.299 urology and gynecology portfolio considerably 00:17:21.299 --> 00:17:24.099 by acquiring Endo International's American Medical 00:17:24.099 --> 00:17:27.680 Systems urology business for at least $1 .6 billion 00:17:27.680 --> 00:17:30.680 in 2015. They also bought EndoChoice Holdings 00:17:30.680 --> 00:17:34.380 in 2016 for $210 million, ensuring they remained 00:17:34.380 --> 00:17:36.619 a leader in endoscopy and minimally invasive 00:17:36.619 --> 00:17:40.180 GI. The recent high value deals are just astounding. 00:17:40.359 --> 00:17:43.720 They acquired the UK medical device maker BTG 00:17:43.720 --> 00:17:48.839 -PLDI for $4 .2 billion in 2018. In 2021, they 00:17:48.839 --> 00:17:51.220 acquired Relievant Med Systems for $850 million 00:17:51.220 --> 00:17:54.079 upfront. And in January 2024, they announced 00:17:54.079 --> 00:17:56.799 the acquisition of Axonix, a specialist in sacral 00:17:56.799 --> 00:18:00.799 nerve stimulation, for $3 .7 billion. This relentless, 00:18:00.859 --> 00:18:03.700 high speed, multibillion dollar acquisition strategy 00:18:03.700 --> 00:18:06.079 is the foundational engine of their growth. It 00:18:06.079 --> 00:18:08.799 guarantees a fresh, cutting edge technology pipeline 00:18:08.799 --> 00:18:11.180 at all times. But it's important to note the 00:18:11.180 --> 00:18:14.140 complexity. The attempted acquisition of South 00:18:14.140 --> 00:18:18.200 Korea's MITech for 230 million was canceled in 00:18:18.200 --> 00:18:22.319 May 2023. Why? Citing regulatory hurdles. So 00:18:22.319 --> 00:18:24.759 even with all their resources, navigating international 00:18:24.759 --> 00:18:27.740 regulatory approval remains a bottleneck and 00:18:27.740 --> 00:18:30.640 a real risk. So we have this portrait of aggressive, 00:18:31.019 --> 00:18:34.799 almost unstoppable financial growth, all powered 00:18:34.799 --> 00:18:38.099 by M &A. But this velocity comes with profound 00:18:38.099 --> 00:18:41.440 risk, which leads us directly into part three, 00:18:41.559 --> 00:18:43.819 where we have to examine the cost of that growth, 00:18:44.000 --> 00:18:46.519 the staggering litigation, the relentless patent 00:18:46.519 --> 00:18:49.380 wars, and the fundamental product safety concerns 00:18:49.380 --> 00:18:51.579 that have plagued the company for decades. The 00:18:51.579 --> 00:18:53.680 litigation history of Boston Scientific is just 00:18:53.680 --> 00:18:55.819 massive. I mean, we are often talking about nine 00:18:55.819 --> 00:18:57.980 and ten figure sums. And the most financially 00:18:57.980 --> 00:19:00.680 punitive example is that patent war with Johnson 00:19:00.680 --> 00:19:03.079 & Johnson that officially started back in 2003. 00:19:03.359 --> 00:19:05.450 And it was centered entirely on computing. heating 00:19:05.450 --> 00:19:07.289 intellectual property for those crucial heart 00:19:07.289 --> 00:19:09.470 stents. The taxes versus the cipher. Exactly. 00:19:09.750 --> 00:19:11.789 And this was not a minor courtroom skirmish. 00:19:11.789 --> 00:19:14.069 This was an industry defining patent war with 00:19:14.069 --> 00:19:16.509 billions on the line. Both giants claimed the 00:19:16.509 --> 00:19:18.349 other had infringed their foundational device 00:19:18.349 --> 00:19:22.549 patents. So to finally settle this, BSC was forced 00:19:22.549 --> 00:19:26.960 to agree to two colossal payouts. First. $716 00:19:26.960 --> 00:19:30.660 million to J &J in September 2009. And then, 00:19:30.700 --> 00:19:33.559 just a few months later, in February 2010, an 00:19:33.559 --> 00:19:37.039 even larger payment of $1 .73 billion. So if 00:19:37.039 --> 00:19:38.940 you add that up, that is a total payout of $2 00:19:38.940 --> 00:19:43.339 .46 billion. In just two years, paid directly 00:19:43.339 --> 00:19:45.680 to their primary competitor over these IP claims. 00:19:45.920 --> 00:19:48.140 It's an almost unbelievable figure. It wasn't 00:19:48.140 --> 00:19:50.559 just a fee. It was essentially a tax on their 00:19:50.559 --> 00:19:52.940 success. And this cost didn't even end there. 00:19:53.079 --> 00:19:54.920 The sources note that the legal wrangling continued. 00:19:55.079 --> 00:19:57.259 There was a separate contract breach case scheduled 00:19:57.259 --> 00:20:00.579 for 2014 where J &J was seeking over $5 billion 00:20:00.579 --> 00:20:03.599 in additional damages. Wow. And J &J wasn't the 00:20:03.599 --> 00:20:05.400 only one getting these massive patent payouts. 00:20:05.539 --> 00:20:08.640 Right. BSC also paid $85 million to Nevro and 00:20:08.640 --> 00:20:11.119 $42 million to Titrogen for other patent disputes. 00:20:11.500 --> 00:20:13.680 This constant multi -million dollar stream of 00:20:13.680 --> 00:20:15.359 payment shows that legal defense and settlement 00:20:15.359 --> 00:20:17.740 costs are basically a permanent, non -optional 00:20:17.740 --> 00:20:19.660 part of Boston Scientific's operating budget. 00:20:20.000 --> 00:20:22.319 But far more serious and profoundly damaging 00:20:22.319 --> 00:20:24.960 to the company's integrity are the controversies 00:20:24.960 --> 00:20:27.880 involving product safety and direct patient harm. 00:20:28.039 --> 00:20:30.700 And the most recognized and widespread scandal 00:20:30.700 --> 00:20:33.799 involves the transvaginal mesh product. This 00:20:33.799 --> 00:20:36.900 is a devastating and complex issue. It involves 00:20:36.900 --> 00:20:39.920 tens of thousands of victims. Boston Scientific 00:20:39.920 --> 00:20:42.500 was one of several major manufacturers of this 00:20:42.500 --> 00:20:45.059 mesh. Which was used to surgically treat conditions 00:20:45.059 --> 00:20:48.140 like pelvic organ prolapse and stress urinary 00:20:48.140 --> 00:20:50.559 incontinence in women. The controversy stems 00:20:50.559 --> 00:20:53.640 from severe allegations about the integrity and 00:20:53.640 --> 00:20:55.980 the sourcing of the materials used in the device 00:20:55.980 --> 00:20:59.519 itself. Specifically, numerous legal and journalistic 00:20:59.519 --> 00:21:01.759 investigations concluded that the company had 00:21:01.759 --> 00:21:04.920 used cheap, counterfeit polypropylene resin. 00:21:05.119 --> 00:21:07.500 The allegations were that this resin, sourced 00:21:07.500 --> 00:21:10.099 through unorthodox channels, was toxic and prone 00:21:10.099 --> 00:21:12.440 to degrading when exposed to oxygen and bodily 00:21:12.440 --> 00:21:14.900 fluid. Causing severe chronic pain and complications 00:21:14.900 --> 00:21:17.329 for thousands of women. Now, it's worth noting 00:21:17.329 --> 00:21:20.049 that Boston Scientific publicly and consistently 00:21:20.049 --> 00:21:24.190 disputed these claims. They cited a 2017 FDA 00:21:24.190 --> 00:21:27.109 report, which examined the resin and found variability, 00:21:27.430 --> 00:21:29.950 but stated, and I'm quoting, these differences 00:21:29.950 --> 00:21:32.829 do not present new safety or effectiveness concerns. 00:21:33.150 --> 00:21:35.230 OK, so that's the company's defense. But regardless 00:21:35.230 --> 00:21:37.230 of that, the scale of the legal fallout really 00:21:37.230 --> 00:21:40.029 speaks for itself. It does. By January 2021, 00:21:40.410 --> 00:21:43.450 the sources concerned that approximately 54 ,000 00:21:43.450 --> 00:21:45.900 lawsuits related to the mesh had been. filed 00:21:45.900 --> 00:21:49.480 against Boston Scientific alone. 54 ,000. This 00:21:49.480 --> 00:21:51.500 is not a handful of complaints. This is a mass 00:21:51.500 --> 00:21:54.279 tort event. It is. And the initial legal awards 00:21:54.279 --> 00:21:57.240 were massive. One woman who sued in 2011 was 00:21:57.240 --> 00:22:00.359 initially awarded $100 million in damages. But 00:22:00.359 --> 00:22:02.380 that amount was later reduced on appeal to $10 00:22:02.380 --> 00:22:04.779 million. Right. But those initial jury verdicts 00:22:04.779 --> 00:22:07.380 showed the deep level of public outrage. So to 00:22:07.380 --> 00:22:10.859 manage the fallout, BSC began settling. In 2015, 00:22:11.119 --> 00:22:13.819 they announced they would pay $119 million to 00:22:13.819 --> 00:22:16.259 settle the claims of nearly 3 ,000 plaintiffs. 00:22:16.359 --> 00:22:19.400 And in March 2021, they agreed to pay another 00:22:19.400 --> 00:22:22.640 $189 million to settle allegations from various 00:22:22.640 --> 00:22:25.839 states that the company had seriously misrepresented 00:22:25.839 --> 00:22:28.380 the safety risks of the mesh in their marketing 00:22:28.380 --> 00:22:30.839 materials. And the ultimate regulatory action, 00:22:30.960 --> 00:22:33.539 which effectively ended the product line, came 00:22:33.539 --> 00:22:37.210 in April 2019. The FDA issued a definitive order 00:22:37.210 --> 00:22:39.529 to Boston Scientific and Coloplast requiring 00:22:39.529 --> 00:22:42.809 them to completely remove all vaginal mesh products 00:22:42.809 --> 00:22:45.670 for pelvic organ prolapse from the U .S. market. 00:22:45.829 --> 00:22:48.390 That is the highest level of regulatory censure 00:22:48.390 --> 00:22:51.470 possible for a product line. This theme of defective 00:22:51.470 --> 00:22:53.470 devices continues when we look at their products 00:22:53.470 --> 00:22:56.589 from the mid -2000s. In 2005, Boston Scientific 00:22:56.589 --> 00:23:00.109 paid $74 million to settle allegations regarding 00:23:00.109 --> 00:23:02.509 their NIR stents. The issue there was that the 00:23:02.509 --> 00:23:04.710 company continued actively selling these stents 00:23:04.710 --> 00:23:07.410 despite having information that many were defective. 00:23:07.529 --> 00:23:10.109 An alleged failure to prioritize safety that 00:23:10.109 --> 00:23:12.829 potentially led to 26 patient injuries and one 00:23:12.829 --> 00:23:16.059 death. That's deeply troubling. But that behavior, 00:23:16.160 --> 00:23:18.799 the failure to report known device defects, it 00:23:18.799 --> 00:23:20.619 becomes even more disturbing when we examine 00:23:20.619 --> 00:23:22.420 the devices they inherited through the Guidant 00:23:22.420 --> 00:23:25.019 acquisition. The Guidant story is crucial because 00:23:25.019 --> 00:23:27.940 it illustrates the systemic risk of this serial 00:23:27.940 --> 00:23:30.759 M &A strategy. Right. The criminal conviction 00:23:30.759 --> 00:23:33.319 centered on Guidant's conduct before the 2006 00:23:33.319 --> 00:23:36.720 merger. But Boston Scientific inherited all the 00:23:36.720 --> 00:23:39.279 legal liability and the penalties. The sources 00:23:39.279 --> 00:23:42.059 reveal shocking details about the cover -up surrounding 00:23:42.059 --> 00:23:45.019 Guidant's defective defibrillators. Guidant, 00:23:45.039 --> 00:23:48.220 by then a BSE subsidiary, was criminally convicted 00:23:48.220 --> 00:23:51.839 in 2011. For what specifically? For systematically 00:23:51.839 --> 00:23:54.819 failing to report life -threatening safety problems 00:23:54.819 --> 00:23:57.759 with their defibrillators to the FDA. They were 00:23:57.759 --> 00:24:02.000 forced to pay over $296 million in criminal fines. 00:24:02.359 --> 00:24:04.420 Let's delve into the nature of that deception, 00:24:04.640 --> 00:24:07.019 because it's critical. Guidant knew these devices 00:24:07.019 --> 00:24:10.200 had critical flaws, battery failures, short circuits 00:24:10.200 --> 00:24:12.059 that could lead to the device failing to deliver 00:24:12.059 --> 00:24:14.160 a lifesaving shock. And despite knowing this 00:24:14.160 --> 00:24:16.539 internally, they knowingly continued to manufacture 00:24:16.539 --> 00:24:19.140 and sell the defective devices. And the depth 00:24:19.140 --> 00:24:21.000 of the corporate cover -up is extraordinary. 00:24:21.380 --> 00:24:23.640 They specifically advised their sales reps to 00:24:23.640 --> 00:24:25.680 tell physicians and hospitals that nothing was 00:24:25.680 --> 00:24:28.160 wrong with the defibrillators. And when communicating 00:24:28.160 --> 00:24:31.099 with the FDA about fixes, they misrepresented 00:24:31.099 --> 00:24:33.809 the purpose. claiming it was for process improvement 00:24:33.809 --> 00:24:35.930 rather than correcting life -threatening flaws. 00:24:36.190 --> 00:24:38.470 They maintained this deception for a full 10 00:24:38.470 --> 00:24:40.329 months after they first knew about the problem. 00:24:40.569 --> 00:24:43.029 They didn't reveal the defects until three patient 00:24:43.029 --> 00:24:46.009 deaths had already occurred. This systemic deceit 00:24:46.009 --> 00:24:48.309 designed to protect market share ahead of patient 00:24:48.309 --> 00:24:51.049 lives is why the conviction was criminal, not 00:24:51.049 --> 00:24:53.910 just civil. And even after that conviction, the 00:24:53.910 --> 00:24:58.200 legal fallout persisted. In 2013, BSC and its 00:24:58.200 --> 00:25:01.140 subsidiaries, including Guidant, paid an additional 00:25:01.140 --> 00:25:04.599 $30 million to settle allegations that Guidant 00:25:04.599 --> 00:25:06.980 had knowingly sold those defective devices to 00:25:06.980 --> 00:25:09.140 facilities that then implanted them into Medicare 00:25:09.140 --> 00:25:11.490 patients. So the public paid twice. Once for 00:25:11.490 --> 00:25:13.970 the device and again for the cover -up. And beyond 00:25:13.970 --> 00:25:16.589 safety failures, the sources also confirmed serious 00:25:16.589 --> 00:25:19.210 issues with improper influence and kickback schemes. 00:25:19.549 --> 00:25:23.710 In 2009, BSC agreed to pay $22 million to settle 00:25:23.710 --> 00:25:26.589 allegations that its subsidiary, Guidant, had 00:25:26.589 --> 00:25:28.849 used kickback schemes related to the sales of 00:25:28.849 --> 00:25:31.119 its cardiac rhythm devices. And these weren't 00:25:31.119 --> 00:25:33.779 subtle payments. The scheme involved paying physicians 00:25:33.779 --> 00:25:36.339 to participate in specific post -market studies. 00:25:36.839 --> 00:25:39.380 Allegedly, Guidant paid doctors between $1 and 00:25:39.380 --> 00:25:42.819 $1 ,500 each to participate. And the allegation 00:25:42.819 --> 00:25:45.180 is that this wasn't for genuine scientific discovery? 00:25:45.480 --> 00:25:48.319 No. The allegation is that this was thinly veiled 00:25:48.319 --> 00:25:52.009 compensation to improperly influence physician 00:25:52.009 --> 00:25:55.349 choices, and steer sales toward guidance, and 00:25:55.349 --> 00:25:57.750 by extension, Boston Scientific's product. It 00:25:57.750 --> 00:26:00.190 completely compromises the integrity of the clinical 00:26:00.190 --> 00:26:02.430 decision -making process. And the bribery allegations 00:26:02.430 --> 00:26:05.089 weren't just exclusive to the acquired guidance 00:26:05.089 --> 00:26:07.910 entity. Separately, in 2010, Boston Scientific 00:26:07.910 --> 00:26:11.950 itself was fined $600 ,000 by the DOJ for paying 00:26:11.950 --> 00:26:14.589 a U .S. Army doctor to use and recommend their 00:26:14.589 --> 00:26:16.950 devices. So the issue of improper influence appears 00:26:16.950 --> 00:26:18.769 to have been a broader corporate challenge at 00:26:18.769 --> 00:26:20.670 the time. And finally, just to show that this 00:26:20.670 --> 00:26:23.450 litig - timeline is not ancient history, safety 00:26:23.450 --> 00:26:26.549 concerns continue to arise. Just in April of 00:26:26.549 --> 00:26:30.509 2024, the FDA announced a recall of Boston Scientific's 00:26:30.509 --> 00:26:32.869 obsidioembolic device. What's that used for? 00:26:33.029 --> 00:26:35.509 It's a crucial device used to stop hemorrhaging 00:26:35.509 --> 00:26:37.630 and excessive bleeding in certain procedures. 00:26:38.109 --> 00:26:41.930 The concern is very specific. When the obsidio 00:26:41.930 --> 00:26:44.549 device is used with a specific injection method 00:26:44.549 --> 00:26:47.150 called the aliquot technique, it can lead to 00:26:47.150 --> 00:26:49.640 bowel ischemia. Which is restricted or insufficient 00:26:49.640 --> 00:26:52.839 blood flow to the intestines. Exactly. And because 00:26:52.839 --> 00:26:55.700 that can lead to tissue death, the FDA classified 00:26:55.700 --> 00:26:59.440 this as the most serious type of recall, noting 00:26:59.440 --> 00:27:02.440 that it can potentially result in longer hospitalization 00:27:02.440 --> 00:27:05.680 or even death. So the necessity for constant, 00:27:05.799 --> 00:27:08.440 diligent monitoring of product safety, even on 00:27:08.440 --> 00:27:10.759 the newest products, is a permanent reality. 00:27:11.140 --> 00:27:13.740 It is. So we've tracked this extraordinary history, 00:27:13.940 --> 00:27:16.160 groundbreaking innovation like the steerable 00:27:16.160 --> 00:27:18.339 catheter and the SICD on one side. And on the 00:27:18.339 --> 00:27:20.859 other, billions paid out in patent wars, mass 00:27:20.859 --> 00:27:23.579 tort liabilities with the mesh, criminal convictions 00:27:23.579 --> 00:27:26.680 inherited from subsidiaries, and persistent kickback 00:27:26.680 --> 00:27:29.440 schemes. It truly paints a dual portrait of this 00:27:29.440 --> 00:27:31.960 medical device giant. Which leads us into part 00:27:31.960 --> 00:27:39.619 four, and it raises a fat... This is maybe the 00:27:39.619 --> 00:27:42.279 most paradoxical aspect of the whole story. While 00:27:42.279 --> 00:27:44.700 the company has faced intense criticism and billion 00:27:44.700 --> 00:27:46.779 -dollar liabilities on the product's safety and 00:27:46.779 --> 00:27:49.519 legal fronts, its organizational culture, especially 00:27:49.519 --> 00:27:51.839 around diversity and inclusion, has received 00:27:51.839 --> 00:27:54.789 consistent, high -profile recognition. Their 00:27:54.789 --> 00:27:58.349 recognition is undeniable. BSC has been repeatedly 00:27:58.349 --> 00:28:00.769 named to Forbes' Best Employers for Diversity 00:28:00.769 --> 00:28:04.490 list. They ranked 85th in 2019, made a dramatic 00:28:04.490 --> 00:28:08.309 leap to sixth in 2021. Sixth overall. That's 00:28:08.309 --> 00:28:10.670 a massive achievement for a medical device manufacturer. 00:28:10.950 --> 00:28:15.009 And they remain strong at 171st in 2022. This 00:28:15.009 --> 00:28:17.009 suggests they're a recognized, sustained effort 00:28:17.009 --> 00:28:20.160 to cultivate a supportive internal culture. Their 00:28:20.160 --> 00:28:22.400 commitment to gender equality has also been a 00:28:22.400 --> 00:28:25.980 hallmark. In 2019, Bloomberg included BSC in 00:28:25.980 --> 00:28:28.759 its Gender Equality Index, which recognizes companies 00:28:28.759 --> 00:28:31.099 that publicly commit to the advancement of women. 00:28:31.220 --> 00:28:33.759 And they consistently receive accolades for supporting 00:28:33.759 --> 00:28:36.160 working parents. Working Mother magazine listed 00:28:36.160 --> 00:28:38.900 them as one of the 100 best companies for working 00:28:38.900 --> 00:28:41.740 mothers for four consecutive years, from 2017 00:28:41.740 --> 00:28:44.690 through 2020. And their track record on LGBTQ 00:28:44.690 --> 00:28:48.289 equality is exceptionally strong. The Human Rights 00:28:48.289 --> 00:28:51.809 Campaign has named BSC a best place to work for 00:28:51.809 --> 00:28:55.549 LGBTQ equality. They achieved a perfect 100 out 00:28:55.549 --> 00:28:58.309 of 100 score on the Corporate Equality Index 00:28:58.309 --> 00:29:02.869 every single year from 2015 through 2021. That 00:29:02.869 --> 00:29:05.289 sustained perfect score suggests that internally, 00:29:05.569 --> 00:29:08.349 these DNI standards are deeply embedded. And 00:29:08.349 --> 00:29:10.150 this really forces you to ask the analytical 00:29:10.150 --> 00:29:13.039 question, how can a company maintain this level 00:29:13.039 --> 00:29:15.039 of external recognition for corporate ethics 00:29:15.039 --> 00:29:17.599 and inclusion while simultaneously grappling 00:29:17.599 --> 00:29:20.579 with the severe multi -billion dollar fallout 00:29:20.579 --> 00:29:22.940 from product liabilities and criminal convictions. 00:29:23.180 --> 00:29:25.140 It suggests a profound structural separation. 00:29:25.519 --> 00:29:28.160 You have this extremely successful internal culture 00:29:28.160 --> 00:29:30.619 focused on talent acquisition, retention, and 00:29:30.619 --> 00:29:33.019 diversity running in parallel to an aggressive, 00:29:33.079 --> 00:29:35.799 high -risk operational strategy in M &A that 00:29:35.799 --> 00:29:38.259 often leads to spectacular legal failures. The 00:29:38.259 --> 00:29:40.440 financial and legal risk is siloed from the day 00:29:40.440 --> 00:29:43.319 -to -day organizational culture. We should also 00:29:43.319 --> 00:29:45.000 highlight some of the notable leaders who have 00:29:45.000 --> 00:29:47.589 shaped the company. Ursula Burns is a prime example. 00:29:47.890 --> 00:29:50.769 She served on BSC's board of directors from 2002 00:29:50.769 --> 00:29:54.390 until 2009. She resigned from the board to take 00:29:54.390 --> 00:29:57.329 on the CEO role at Xerox. Making history as the 00:29:57.329 --> 00:29:59.910 first African -American female CEO of a Fortune 00:29:59.910 --> 00:30:02.609 500 company, her involvement lends significant 00:30:02.609 --> 00:30:05.549 prestige to the BSC leadership structure during 00:30:05.549 --> 00:30:08.289 a very tumultuous period. Another notable figure 00:30:08.289 --> 00:30:11.069 is Christina M. Johnson. She served on the board 00:30:11.069 --> 00:30:14.069 from 2006 to 2009 before resigning to become 00:30:14.069 --> 00:30:16.019 undersecretary in the the Department of Energy. 00:30:16.240 --> 00:30:18.640 She later returned to the board from 2011 to 00:30:18.640 --> 00:30:21.920 2017. These connections show that BSC attracts 00:30:21.920 --> 00:30:24.720 and places individuals into the highest levels 00:30:24.720 --> 00:30:26.700 of corporate and governmental leadership. And 00:30:26.700 --> 00:30:28.759 we have to mention Donald Stephen Boehm, who 00:30:28.759 --> 00:30:30.700 served as chief medical and scientific officer 00:30:30.700 --> 00:30:34.460 from 2006 until his death in 2009. Having a figure 00:30:34.460 --> 00:30:36.640 of his stature in that role underscores the need 00:30:36.640 --> 00:30:39.380 to blend clinical expertise directly into executive 00:30:39.380 --> 00:30:41.579 decision making. Finally, let's briefly anchor 00:30:41.579 --> 00:30:44.359 Boston Scientific's global footprint. This level 00:30:44.359 --> 00:30:47.170 of complex management requires a truly multinational 00:30:47.170 --> 00:30:49.730 operation. Far beyond the Marlboro, Massachusetts 00:30:49.730 --> 00:30:52.710 headquarters, they operate in more than 100 countries. 00:30:52.930 --> 00:30:55.670 Their European headquarters is in France. Asia 00:30:55.670 --> 00:30:58.049 Pacific headquarters are in Singapore, and Latin 00:30:58.049 --> 00:31:01.019 America is managed from Weston, Florida. This 00:31:01.019 --> 00:31:03.900 decentralized structure is mandatory for managing 00:31:03.900 --> 00:31:07.420 a product line that, by 2016, already exceeded 00:31:07.420 --> 00:31:10.559 13 ,000 diverse products. So bringing this deep 00:31:10.559 --> 00:31:12.900 dive full circle, we've tracked Boston Scientific 00:31:12.900 --> 00:31:15.500 from Itzhak Bentov's idea in a church basement 00:31:15.500 --> 00:31:19.319 in 1979, fueled by the vision of Abel and Nicholas. 00:31:19.680 --> 00:31:22.140 Through to the global market leader, defined 00:31:22.140 --> 00:31:24.420 by the introduction of the tax's drug -eluting 00:31:24.420 --> 00:31:27.819 stent and crucial devices like the SICD. And 00:31:27.819 --> 00:31:30.039 this trajectory was fundamentally powered by 00:31:30.039 --> 00:31:33.140 relentless, highly priced acquisitions, epitomized 00:31:33.140 --> 00:31:36.920 by that $27 .2 billion guidance deal. And somehow 00:31:36.920 --> 00:31:39.420 it managed to maintain a culture that prioritized 00:31:39.420 --> 00:31:41.779 diversity and inclusion. So what does this all 00:31:41.779 --> 00:31:43.880 mean for you, the listener? The story Boston 00:31:43.880 --> 00:31:46.579 Scientific provides this textbook yet dramatic 00:31:46.579 --> 00:31:48.940 demonstration of the dual nature of innovation 00:31:48.940 --> 00:31:51.650 in the modern medical device industry. On one 00:31:51.650 --> 00:31:54.029 hand, you have immense potential for improving 00:31:54.029 --> 00:31:56.849 and saving lives, procedures that are less painful, 00:31:57.049 --> 00:31:59.950 faster, and far less risky than traditional surgery. 00:32:00.250 --> 00:32:03.369 But this immense technological benefit is inexorably 00:32:03.369 --> 00:32:06.210 coupled with massive, self -imposed corporate 00:32:06.210 --> 00:32:08.930 risk. And the evidence of this risk is clear 00:32:08.930 --> 00:32:10.970 in the billions paid out in patent disputes. 00:32:11.289 --> 00:32:15.170 Over $2 .4 billion to J &J alone. And the crippling 00:32:15.170 --> 00:32:17.630 financial liabilities from product safety failures 00:32:17.630 --> 00:32:20.490 like the defective guidance defibrillators and 00:32:20.490 --> 00:32:22.569 the tens of thousands of lawsuits related to 00:32:22.569 --> 00:32:24.910 the transvaginal match. The story shows that 00:32:24.910 --> 00:32:26.970 in the medical world, innovation is expensive 00:32:26.970 --> 00:32:30.490 and failure is catastrophic. The recurring cost 00:32:30.490 --> 00:32:33.410 of legal liability, the billions paid out, is 00:32:33.410 --> 00:32:36.230 essentially a permanent, non -optional R &D budget 00:32:36.230 --> 00:32:38.809 for avoiding prison and managing brand reputation. 00:32:39.170 --> 00:32:41.529 Has to profoundly reshape every corporate decision 00:32:41.529 --> 00:32:44.380 they make. Which leads us to our final provocative 00:32:44.380 --> 00:32:46.539 thought for you to consider building on that 00:32:46.539 --> 00:32:49.390 M &A strategy. Boston Scientific's rapid growth 00:32:49.390 --> 00:32:51.670 is fundamentally tied to its ability to absorb 00:32:51.670 --> 00:32:53.910 competitors and their technological pipelines. 00:32:54.230 --> 00:32:56.970 It is the definition of a serial acquirer. We 00:32:56.970 --> 00:32:59.329 saw how this strategy brought in the Guyton Heart 00:32:59.329 --> 00:33:02.190 Rhythm business, along with its specific pre 00:33:02.190 --> 00:33:04.470 -acquisition criminal cover -up history concerning 00:33:04.470 --> 00:33:07.190 defective devices. And we see the long shadow 00:33:07.190 --> 00:33:10.150 of inherited liability in the continued settlements 00:33:10.150 --> 00:33:12.589 related to products like the transvaginal mesh. 00:33:12.890 --> 00:33:15.269 So this raises an essential recurring question 00:33:15.269 --> 00:33:18.910 about accountability. When lifesaving medical 00:33:18.910 --> 00:33:21.390 necessity meets high -speed corporate mergers 00:33:21.390 --> 00:33:24.410 and acquisitions, how accurately can regulators 00:33:24.410 --> 00:33:28.390 and the public truly assess the safety risk of 00:33:28.390 --> 00:33:30.809 these integrated product lines? The crucial dilemma 00:33:30.809 --> 00:33:33.359 is this. What happens to corporate accountability 00:33:33.359 --> 00:33:36.000 when a dangerous device's history of deception, 00:33:36.299 --> 00:33:39.519 as with Guidantin, predates the current corporate 00:33:39.519 --> 00:33:42.059 owner? Right. The current owner, Boston Scientific, 00:33:42.420 --> 00:33:45.160 inherits the liability and pays the fines. But 00:33:45.160 --> 00:33:47.220 the history of deception belongs to the acquired 00:33:47.220 --> 00:33:49.220 entity. And the challenge for the medical industry 00:33:49.220 --> 00:33:51.599 going forward is ensuring that the speed of M 00:33:51.599 --> 00:33:54.099 &A never outpaces the diligence required for 00:33:54.099 --> 00:33:56.319 patient safety, regardless of who manufactured 00:33:56.319 --> 00:33:59.140 the device originally. It is a legacy that defines 00:33:59.140 --> 00:34:01.359 the true cost of aggressive growth in medicine.