Ken Stein : Yes, absolutely. Thanks, Mike. Thanks, Robbie. Again, just we do believe that FARAPULSE is differentiated relative to other PFA technologies out there. I think it’s important to reiterate that all PSA is not created equal and because it’s a field effect, the results that you’re going to see with any of the technologies are highly dependent the way actual catheter design and FARAPULSE is the only system in evaluation right now that was designed from the ground up to deliver PFA dependent on the waveform that’s delivered and dependent on the dosing strategy. And as you said, we are really looking forward to presenting the results of our randomized FARAPULSE trial, ADVENT in the second half of this year as well as to initiate our persistent AF trial advantage imminently.
The only thing I’d add to what Mike said is I also think as you think about I think it’s really important also to consider the really extraordinary momentum that we’ve got with our Transseptal access solutions from Baylis and continue to see above-market growth with that and continue to see increased use of the bales Transseptal access solutions, the energy needle and versus across access, both in ablation procedures and in WATCHMAN and other structural heart procedures.
Robbie Marcus : Great. Thanks. And maybe just a quick follow-up. China has been an important growth driver for Boston Scientific, grew 22% in the year even with the difficult operating environment. So how should we be thinking about China coming out of the reopening here into first quarter? And what’s your expectation for the year going forward? Thanks.
Mike Mahoney : Thank you. That team had a terrific ’22 despite all the challenges with COVID and all the different pricing tenders that occur over there. So, for China, in ’23, we are very bullish again — we do expect double-digit growth out of the China team for the full year. There’ll likely be some pressure in first quarter given the challenges that they’ve had in China with COVID. So, we expect potentially some sales growth challenges in Q1, but we do expect strong double digit for the full year, likely not at the same level as the 22% that we delivered in ’22, but strong double digits nonetheless.
Operator: The next question comes from Larry Biegelsen with Wells Fargo. Please go ahead.
Larry Biegelsen: Good morning. Thanks for taking my question. Congratulations on a strong end to the year here. I wanted to ask a two-part question also on FARAPULSE. So maybe for Dr. Stein, you talked about your excitement for the ADVENT trial later this year. Can you help put the data into context? How did that compare to prior RF and cryo studies? And what would be a win for you in ADVENT for FARAPULSE? And we’re going to see — the second part is we’re going to see the Medtronic Pulse select data at ACC, the J&J INSPIRE data at Boston AF, I guess, this weekend. You talked about how FARAPULSE is differentiated. What should we be looking for in those studies that would support your comments earlier? Thank for taking my question.
Ken Stein : Yes. Thanks, Larry. And let me just sort of begin by reiterating what I said to Robbie here. As we look at the data, everyone just needs to bear in mind that every PFA technology really needs to be evaluated on its own. It’s very much unlike RF ablation. When you’re doing RF ablation, if you’ve got the same size catheter tip and you’ve got the same back patch and the same power that you’re putting through, you get the same lesion. PFA is very different. Again, because it’s an electric field effect, what happens is just intimately related to actually the catheter design that tells you the shape of the field that you’re generating; the waveform, which tells you very much what kind of impact you’re going to have from that field and then your dosing strategy, how many applications of energy do you put in and where do you put them in.
We’re very confident that FARAPULSE is the industry leader in this. Again, based on having a catheter that was designed from the ground up to deliver PFA, based on a decade of preclinical and then really high-quality clinical data, validating the waveform and validating a dosing strategy with ReMAP studies that creates durable isolation. And I say, the proof of the pudding is in the eating, and we’re really excited and looking forward to seeing the results of our randomized ADVENT trial. I’m glad that you mentioned MANIFEST, again, gives us a high degree of confidence in where we’re going, right? So, MANIFEST is a registry study of the earliest commercial cases following our CE Mark approval in Europe. So, this is people’s first experience climbing the learning curve and is reported out published initially on the first 1,700 cases and then some limited follow-up in about 1,400 of those patients.
And really what those data show really proves the advantages of using a system like FARAPULSE. Certainly, 1,700 patients, the safety promise of FARAPULSE was realized. No cases of esophageal injury, no cases of persistent phrenic nerve injury, no cases of pulmonary vein stenosis, so certainly being able to avoid most feared complications of AF ablation. Seeing efficacy results that for paroxysmal AFib are at least as good as what’s reported in high-quality trials with conventional thermal ablation and seeing remarkable procedure efficiency. Now — in commercial clinical use, now sort of routinely seeing these cases being done on the order of 30 minutes. And that kind of procedural efficiency is, it’s good for the system as a whole, right? There are a lot of patients who need to be treated dealing with staffing issues, et cetera, et cetera.
Anything we can do an increased throughput is good. It’s good for patients, though, too. The less time you’re undergoing a procedure, the less number of things that can go wrong, honestly. And so basically, to some, right, the MANIFEST data validates what we see as all the differentiated advantages of FARAPULSE, a safer procedure avoiding the worst complications. A procedure that is at least as effective as what you see with thermal ablation and a really efficient procedure, which benefits physicians, hospitals and patients.
Larry Biegelsen: Thank you.
Operator: The next question comes from Joanne Wuensch with Citibank. Please go ahead.
Joanne Wuensch: Thank you very much for taking the question. And good morning. I want to spend just a minute or two on the Urology and Pelvic Prolapse business. I mean, that was up another 12% this quarter, 12.7% organically last quarter. What is driving that? And should we think of this more as a solid double-digit grower as we look forward? And my follow-up question, I’m going to just put it out there now, 50 basis points of operating margin expansion or at least 50 basis points this year, where is that coming from? Thank you.
Mike Mahoney: Great, Mike here. Thanks for asking the endo, uro. You didn’t asked about endo, but I’ll throw it in there because they continue just to really outperform and are getting quite sizable within our portfolio and both accretive nicely to margins and growth rate. The urology results, I mentioned in the prepared words, it’s a strong global performance around the world. This business has been predominantly a U.S.-oriented business that grows faster in the U.S. accretive to Boston Scientific. Outside the U.S. has been very underpenetrated. But now with all the investments that we’ve made, commercial and through R&D and through acquisitions is strengthening our outside the U.S. business in urology extensively. And the combination of that global performance and I would say, a highly differentiated portfolio.
We talked about category leadership within a service line, and we really have that with urology and with endoscopy. So they have a very differentiated portfolio that’s very comprehensive versus our competitive set and contracting capabilities with customers who want to work with us. And so urology continues to do quite well, and we expect similar results over the next few years here. And the integration of Lumenis has done well. So that’s a terrific business. And I would say, along the same lines, most of the same words with endoscopy as well. In terms of margin improvement, Dan, do you want to hit that one?
Dan Brennan: I can do that. Yes, so the commentary again was 50 basis points on top of the 2022 results, excluding the Italian sales reserve. So that would be more like 25.6% was the actual, and then there was a 30 basis point impact. So then add 50 basis points to that is where you get the 26.4 just to give you the math there. And where does it come from? The short answer is, we believe all lines of the P&L. So gross margin will have a slight headwind from FX this year. Again, we said neutral to the EPS line, neutral to adjusted EPS for the year. But at the gross margin line, we’re largely hedged for the year 2023. And with what we see with where rates are today, we think we’ll have a slight headwind from FX in gross margin.
But we still think gross margin itself can go north through a lot of the good activities that we have from our global supply chain team in terms of reducing cost and other volume improvement programs. And then tightly managing our discretionary spend within SG&A to ensure it’s helping us achieve our strategic plan. And as we’ve always talked about, just really focused on R&D efficiencies and leverage. It all starts with a healthy top line. We think that 6% to 8% guidance versus that 9% comp last year is a good, solid, healthy top line, and that gives us leverage opportunities throughout the whole P&L. And we think each line of the P&L has the opportunity to contribute towards the goal in 2023.
