Credit Suisse 26 th Annual Healthcare Conference Joe Fitzgerald, EVP and President, Rhythm Management 1
Safe Harbor for Forward-Looking Statements and Regulatory Disclaimers This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “estimate,” “intend” and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could differ materially from the expectations and projections expressed or implied by our forward-looking statements. Factors that may cause such differences can be found in our most recent Form 10-K and Forms 10-Q filed or to be filed with the Securities and Exchange Commission under the headings “Risk Factors” and “Safe Harbor for Forward- Looking Statements.” Accordingly, you are cautioned not to place undue reliance on any of our forward-looking statements. We disclaim any intention or obligation to publicly update or revise any forward- looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which they may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. Market Estimates: Unless noted otherwise, all references to market sizes, market share positions, and market growth rates are BSX internal estimates. Regulatory Disclaimers: Insertable Cardiac Monitor is an investigational device in the United States and not available for sale. Modular CRM, Apama RF Balloon Catheter System, Direct Sense, and Force Sensing technologies are not available for use or sale in the United States. *Non-GAAP measure; for reconciliations of non-GAAP financial measures to the most directly comparable GAAP figures, please refer to pages 18-21 of this document. 2
What to Expect from BSX 1. Living BSX values • Transforming patients’ lives through meaningful innovation and a “WINNING SPIRIT” 2. Driving category leadership and expanding globally • Gaining share globally: Portfolio innovation & compelling economic value drivers • Emerging markets: Building scale & new capabilities to increase patient access 3. Enhancing long term outlook: entering into multiple large, high-growth markets • Diversifying into large high-growth markets with differentiated portfolio & capabilities • Multiple launches into $13B of new market opportunities 4. Consistently delivering revenue and EPS growth in top tier of peer group • 2015-2017E: 3 year organic revenue* CAGR +7% and EPS CAGR +14-15% • 2018E-2020E: 3 year organic revenue* CAGR +6-8% and EPS CAGR +DD 5. Building shareholder value with disciplined capital allocation strategy: more to come • Strong free cash flow* generation: estimated $6.5B+ cumulative in years 2018-2020 • Rigorous and balanced approach to M&A 3
Boston Scientific At-A-Glance: 2016 FY16 reported revenue and operational growth* (total company: $8.4B, +12%) Interventional Endoscopy Cardiology $1.4B, +10% $2.3B, +13% Urology and Structural Heart Pelvic Health $1.0B, +45% $200M+ (+14% ex. AMS) Peripheral Neuromodulation Interventions $560M, +12% $1.0B, +12% Rhythm Management CRM Electrophysiology $245M, +5% $1.9B, +3% 4
Expanding into Multiple High Growth Adjacencies That Will Approach ~$13B in 2020 BSX 2016 Market Growth Accelerators 2020E Sales • LOTUS Edge - TAVR IC: TAVR + LAAC • ACURATE - TAVR $200M+ $5B • WATCHMAN global expansion • Eluvia - DES PI Drug Eluting • Ranger – DCB ~$25M $2B • Critical Limb Ischemia (CLI) • Heart Failure RM Diagnostics --- $1B • ICM • Pathology Endo new markets • Infection ~$50M $2B • Endo-luminal surgery • Visualization Uro/PH new markets • Cancer ~$50M $2B • Overactive bladder • Vercise – Brain Neuromod - Brain ~$25M $1B • Other indications 2020+ ~$0.3B ~$13B 5
Rhythm Management = CRM + EP + Diagnostics: A Growing Market with Continued Innovation CRM EP Diagnostics Other Ablation ICM & Other ICD/CRT-D Pacemaker Rhythmia HeartLogic Solutions Diagnostics CRM EP ICM Total RM 2016 Market Size $9.3B $4.3B $0.6B $14B+ 5 yr CAGR (2016-2021)** flat +10-12% +8-10% +3-5% **Growth in constant currency 6
CRM Next Gen: RESONATE ™ HV Devices 4 Key Feature Sets to Drive Global Share Gains 1 2 ENDURALIFE ™ Battery Technology MRI Conditional Labeling U.S. Approval late Sept ‘17 3 4 SmartCRT™ Therapy HeartLogic™ Heart Failure Diagnostics (including MultiSite Pacing) First and only company with ENDURALIFE ™ & HeartLogic ™ technologies 7
RESONATE Feature #4) HeartLogic ™ : Improving Heart Failure Management BSX’s Solution: HeartLogic™ Sensitivity (%) Unexplained Alert Rate per patient year (HeartLogic) * The first and only heart failure diagnostic that has • HeartLogic Results 2 : been validated for detecting early indications of 70% sensitivity in detecting HF events • worsening heart failure 34 Days median time to HF event • Multiple sensor inputs without an additional • Only 1.47 unexplained alerts per patient • implant , helping clinicians move from reactive year treatment to proactive care 8
Insertable Cardiac Monitor (ICM): Entering a New ~$750M Adjacency in 2019 Diagnostic-only device platform Arrhythmia Management designed for cardiac monitoring (Syncope and AF) and extensible to other diseases • Unique device design • Algorithms to detect atrial arrhythmia, pause, bradycardia and Tachycardia • System differentiation: seamless patient Insertable Monitor Implant Tools interface and back-end monitoring • Multiple commercial synergies with core CRM global teams • FDA and CE mark expected H1:2019 Mobile Handset with Patient Interface & Connectivity Bridge 9
Differentiate with Modular CRM (mCRM ™ ) EMBLEM ™ MRI S-ICD and Related Systems EMBLEM ™ MRI S-ICD mCRM ™ and Related Systems >29,000 implants • $750M market opportunity • Growing Clinical evidence: U.S. post-approval demonstrates continued • Physician will be able to match device therapy • to clinical need in a modular approach positive outcomes 3 : • Demonstrated pre-clinical in vivo feasibility − 66.6% Primary Prevention, Low EF Patients − 98.7% success in acute conversion of VT/VF − Multiple upcoming abstracts on mCRM ™ arrhythmias • Clinical investments to prove safety − Complication-free rate of 96.2% at 30 days and efficacy: UNTOUCHED : Primary prevention penetration • − EMPOWER MPS and MODULAR ATP IDE PRAETORIAN : TV-ICD/S-ICD Head-to-head • − Clinical start expected in 2019 MADIT S-ICD : Potential indication expansion • 10
RHYTHMIA ™ Mapping System: Winning Placements and Share Gains Setting the Standard in Active in >30 countries, with More Slated High Definition Mapping to Launch Over the Next Two Years 5x faster MAPPING 4 Exponentially more data 25x the DATA POINTS 5 See detail never seen before >19,000 Worldwide 0.01mV CASES >50 NOISE THRESHOLD 6 Peer-Reviewed More accurate & complete mapping JOURNAL ARTICLES 11
RF Balloon Technology Expands Treatment Options The Apama RF Balloon Catheter System delivers differentiated single shot therapy to address a $500M opportunity growing to >$1B in 5 years Global Ablation Procedure Mix • Single shot, multi-electrode RF balloon based technology designed to treat atrial VT 8% fibrillation patients Atrial Fibrillation • Built-in cameras allow for real-time Other SVT (AF) 27% 48% visualization of electrode tissue contact Atrial Flutter • Designed to allow customization of energy 17% delivery around circumference of balloon AF Procedure Mix 600 • Streamlined procedure via integrated # of AF Procedures 500 pacing and sensing electrodes that (Thousands) 400 eliminate need for separate diagnostic 300 Single Shot catheter 200 11% Point RF CAGR 100 • CE mark Q4:18E 0 • U.S. IDE enrollment early 2019E 2017 2022 Year 12
RF Balloon Technology Overview 13
DirectSense ™ Technology: New Tool for Physicians in RX/Therapeutic Catheters DirectSense™ Technology will provide physicians with a new tool that enables more information on the tip-to-tissue interface • Enhanced confidence in the location, stability, and proximity of a catheter relative to tissue • Enabled via a software upgrade to RHYTHMIA HDx ™ when used with the IntellaNav ™ MiFi OI catheter • Europe limited market release Q4:17 • Full commercialization Q1:18E • U.S. launch mid-18E 14
Force Sensing Technology: Expanding Our RX / Therapeutic Portfolio Force Sensing technology will further expand capabilities of RHYTHMIA HDx ™ • Addresses $800M+ global market opportunity • Provides physicians the contact force measurements of catheter- to-tissue • Currently in design verification and validation testing with RHYTHMIA HDx ™ integration • CE Mark H1:19E • U.S. approval timeline pending FDA feedback 15
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