Matt’s Mailbag: Most Disconnected Name and Why Did GMED and TNDM Trade Off?

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Matt’s Mailbag: Most Disconnected Name and Why Did GMED and TNDM Trade Off?

SKS

to come (and we still view the Champion data positively for BSX and LAAC market). Competition, Pricing Pressure, Reimbursement

Further, a startup in the LAAC space indicated they believed they could get GMs to 90%

at scale and while we do not believe BSX can get all the way there, we believe the

Watchman is accretive to corporate gross margins and is likely a strong cash generator

too (something that is often lost on investors). There is a slowdown in urology too, but

that is likely fixable in the near term (though some competitive headwinds will likely

remain) but the recently approved PEN acquisition is, in our view, a clear positive for the

revenue outlook at BSX (as a reminder PEN delivered 15% overall revenue growth in

Q1 of this year). Consequently, we believe the outlook for BSX over the next couple of

years is still compelling and, as we have been saying for awhile now, the pipeline at BSX

(IVL, MCS, RDN, Therasphere, and new Agent indications) is the most compelling in all

large cap diversified Med Tech, that is absolutely not reflected in the stock, in our view.

We continue to recommend investors take advantage of the weakness in the stock this

year to accumulate positions in the name.

• Why did GMED and TNDM Trade Off So Much Late Last Week? When both

companies reported Q1 results last week, the stocks for each name rose nicely in after-

market trading as results were strong. However, during the conference calls, a couple

things for each name came out that ended up driving the stocks lower in trading on Friday

(and they have remained depressed since then). Starting with GMED, the pressure

points for investors from the call were NVRO revenue softness and commentary that