Good morning and welcome to the Boston Scientific third quarter 2026 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Lauren Tankler, Vice President, Investor Relations. Please go ahead.

Thank you, Drew, and thanks to everyone for joining us. With me today are Mike Mahoney, Chairman and Chief Executive Officer, and Jon Monson, Executive Vice President and Chief Financial Officer. During the Q&A session, Mike and John will be joined by Joe Fitzgerald, Executive Vice President and Group President, Cardiology, and our Chief Medical Officer, Dr. Ken Stein. We issued a press release earlier this morning announcing our Q3 2026 results, which included reconciliations of the non-GAAP measures used in this release. The release, as well as reconciliations of the non-GAAP measures used in today's call, can be found on the investor relations section of our website. Please note that on the call, operational revenue excludes the impact of foreign currency fluctuations and organic revenue further excludes certain acquisitions and divestitures for which there is less than a full period of comparable net sales. Guidance excludes our previously announced agreement to acquire Penumbra, which we expect to close in early 2027. For more information, please refer to the Q3 financial and operating highlights deck, which may be found on the investor relations section of our website. On this call, all references to sales and revenue are organic and relative growth is compared to the same quarter of prior year unless otherwise specified. This call contains forward-looking statements regarding, among other things, our financial performance, business plans, market expectations, and product performance and development. These statements are based on our current beliefs using information available to us as of today's date and not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect or certain risks or uncertainties materialize, actual results could vary materially from those projected by the forward-looking statements. Factors that may cause such differences are discussed in the earnings release we issued earlier this morning and our periodic reports and other filings with the SEC, including the risk factor section of our most recent annual report on the Form 10-K. Boston Scientific disclaims any intention or obligation to update these forward-looking statements In addition, this call does not constitute an offer to sell or the solicitation of an offer to buy any securities or solicitation of any vote or approval in connection with the proposed transaction with Penumbra. Boston Scientific has filed with the SEC a registration statement on Form S-4 containing a proxy statement of Penumbra and a prospectus of Boston Scientific that contains important information about Penumbra, Boston Scientific, the proposed transaction, and related matters. At this point, I'll turn it over to Mike.

Thanks, Lauren. Thank you, everyone, for joining us today. I want to begin by walking through our third quarter results, provide some fourth quarter outlook, and then assumptions behind our updated view of 2027. I'll then provide more details on both the region and business unit performance and outlook. Q3 total company organic sales grew 1.5% versus our original guide of 3% to 5%. Q3 adjusted EPS of 73 cents declined 3% versus our guidance range of 80% to 82%. Our Q3 results were impacted by our previously reported cybersecurity incident, which we estimate reduced our sales growth by approximately 300 basis points and adjusted EPS by 7 cents in the quarter. Importantly, after a two-week outage as a result of the cyber incident, all operations are back up and running as of September 8th. I'm very proud of our team's resiliency and the efforts they made to help us return as quickly as possible to supporting physicians and their patients for their products. Turning to Q4, We anticipate that it will be a 200 to 300 basis points of impact from the cyber incident as we work through elevated customer orders at the end of Q3 to replenish inventory levels. Additionally, since our second quarter earnings call, EP share pressure has intensified, further accelerated by the cyber incident. We have also seen pricing dynamics in China become more challenging. To that end, we are guiding to organic revenue declines of minus one to minus 3% for fourth quarter 26, and adjusted EPS of 77 cents to 79 cents. This results in a full year 26 organic revenue growth guide of approximately 4% and EPS of 316 to 318. Boston Scientific has enjoyed several years of exceptional growth, driven by strategic investments and strong execution globally, particularly within our EP and Watchman franchises. In 26, we've seen that cycle turn and those two businesses are now weighing on our total company growth as we navigate competition and market dynamics. We believe that 2027 will be the trough in this cycle, and we have several investments and new innovations coming over the course of the next three years that we expect will support stabilization and growth for both the EP and Watchman businesses. And while the remaining 75% of our business has grown consistently, we anticipate there will be additional price headwinds in China in 2027 and the growth likely won't be enough to offset the pressure from EP and Watchmen next year. As a result, we believe we'll be challenged to grow sales and adjust EPS in 27, excluding our pending acquisition of Penumbra. Having said all that, we are taking immediate actions to prepare for the future, including through our previously announced restructuring program and the evolution of our operating structure, while ensuring that we continue to make the right strategic investments across a number of growth platforms. We have a very strong cadence of launches in 27 and 28 and anticipate entering several new markets over the next few years that will unlock $25 billion in new market opportunity by 2030. Importantly, we expect these actions to drive meaningful improvement in both our revenue and adjusted EPS performance as we aim to exit this cycle in 27 and return to delivering high performance in 28 with further improvement expected in 29. I'll now provide some more details on Q3 and full year 26. Turning to our regional performance, the U.S. was flat year over year on an operational basis driven by ICBT, IONE, and neuromodulation. Europe, Middle East, and Africa grew 6% on an operational basis with strong performance across many of our businesses. But within the quarter, there was some impact from cyber offset by a transient headwind in third quarter 25 from our ERP platform GoLive. Asia Pacific declined 1% operationally with growth impacted by the cyber incident, as well as price pressure in China. Pricing dynamics in China continue to evolve and the number of our businesses seeing VBP and other pricing impacts as a result. We expect growth in this market will moderate to single-digit growth. Turning to our business units, I'll start with neuromodulation. Sales grew 13%. In pain, growth was broad-based across the portfolio with exceptional performance with our NALU PNS technology. But within the quarter, data was presented from the IMPROVE study, evaluating our intracept technology with real-world outcomes showing improvements in pain function and quality of life at three months. In brain, growth was driven by our Cartesia X-Lead and Illumina 3D software, which enabled more precise placement and programming. Urology declined 3% this quarter, with impact from the cyber incident, as well as expanding pricing pressure in China. In stone management, we have received a number of approvals for key products, including FDA clearance of our Navigator Flex suction seat, CE mark and FDA clearance for distribution of the 7.5 slim scope, and FDA clearance of our LithoView Elite single-use ureteroscope. As we look forward, we expect these new stone launches, as well as stabilization and productivity, from our S&M Commercial Organization to help our urology performance improve its growth profile over the course of 2027. Endoscopy sales declined 1% versus Q3 2025, inclusive in impact from China VBP and cyber. Importantly, the underlying performance of this business continues to be strong, led by Axios, our differentiated technology. And as we look ahead, we expect our endoscopy performance to be slightly pressured, closer to mid-single-digit market growth until we annualized the impact from the China VBP in fourth quarter 27. Cardiovascular sales delivered growth of 2% and interventional cardiology and vascular therapies sales grew 12%. Our interventional cardiology business had another exceptional quarter growing 19% with continuous strength in our global imaging franchise and drug-eluting technologies. We had another outstanding quarter of our agent DCB which is backed by strong clinical evidence and now has been used to treat over 400,000 patients to date. We remain focused on both the near and longer term growth opportunities for this business. And last quarter received ID approval of the vital PCI trial that is studying our vital circulatory support technology in the high risk PCI population. However, considering the evolving clinical evidence in the space, we've made the decision to shift our strategy and focus our development clinical efforts on the AMI cardiogenic shock indication. We believe that our device design has the potential to be well suited to treat patients experiencing cardiogenic shock and look forward to initiating clinical efforts in 27. Our Vitalis program is one of the largest internal R&D programs and an important long-term growth driver. To solidify funding for the AMI shock program, we have entered an agreement with Blackstone Life Sciences and aim to bring this important technology to market in 2030. Our vascular therapies business grew 1% with some impact from cyber as well as TCAR supply constraints. Importantly, we anticipate that our TCAR supply to improve throughout fourth quarter with full resolution by early next year. Our seismic launch continues to go well and within the quarter we received FDA clearance for seismic IVL, sorry, seismic IVL to treat patients with severely calcified peripheral artery disease in small vessel. expanded our size matrix to now treat above the knee and below the knee. We also received FDA approval for the Ranger 035 drug-coated balloon offering an expanded size and providing a highly complimentary offering as most IVL procedures that are performed in lower limbs are also followed by drug-eluting technologies. We remain excited about the opportunity to add the Penumbra team and they're highly differentiated in the complementary portfolio to Boston Scientific. We continue to work with regulators and now expect to close in early 27 subject to the receipt of the remaining regulatory clearances. Our interventional oncology and embolization business grew 5% driven by strong performance in our cancer therapies franchise, partially offset by some supply constraints that we anticipate will be resolved in early 2027. We continue to see strong adoption of any day dosing on TheraSphere 360 as well as momentum with our hepatic artery infusion technology providing a portfolio of options for cancer treatment. Cardiac rhythm management sales declined minus 2% with some impact from the cyber incident as we navigated usage and activation of technologies that leverage remote monitoring while our systems were down. In Q3, our diagnostics franchise grew high single digits Our low voltage business declined mid single digits and high voltage business declined low single digits. We anticipate that our performance will improve over the course of 27 with new launches and ongoing momentum. Before I turn to Watchman and EP, I want to acknowledge the pressures in these two businesses and the impact that it has on our overall growth. We are acting now to strengthen the LAC market and focus our EP resources where we can compete most effectively. while investing in innovation that we believe can improve over time. On Watchman, sales declined minus 6%, declining 7% in the US and growing 4% internationally. Within the US, concomitant procedures grew approximately 35% and standalone procedures declined high teens versus third quarter 25. We continue to believe that the overall LAC market slowdown primarily reflects changes in patient identification and referral patterns. as physicians assess the clinical evidence published over the last year. Importantly, we're executing against our investment priorities that we laid out in our 2Q call. We held over 200 MedEd events in second quarter and third quarter, providing an opportunity for more than 2,000 referrers and implanters to gain a deeper understanding of the clinical evidence available. We've added more dedicated commercial resources to Watchmen to support both concomitant and standalone procedures and support the referral pathway. In the third quarter, we saw increased patient engagement, further reinforcing the strong demand for alternatives to oral anticoagulation, and highlighting the significant unmet need among patients who can't, shouldn't, or won't take lifelong OAC. We continue to believe that focusing on these priorities will support improvement in the LAC market over time. With our third quarter performance largely in line with expectations despite the cyber incident, we are maintaining our previous outlook for our Watchman business. In fourth quarter, within the U.S., we anticipate no improvement in the year-over-year standalone procedure performance and continued deceleration and concomitant procedure growth against a very high baseline. Internationally, we anticipate similar performance in Q3 and Q4, resulting in sequential flat, low single-digit declines versus Q3 26 globally. Turning to 27, we believe our investments, along with a potential label change, will improve the market over time, However, until we see the market improve, we are assuming that the market performance will be similar to Q4 with additional pressure due to a new competitive launch. We believe in the benefit of this therapy and continue to innovate and invest for the future. Within the quarter, we commenced enrollment in the Elite AF clinical trial to evaluate the safety and effectiveness of the next generation Watchman Elite platform. We anticipate bringing this fourth generation technology to market in 29. Additionally, we look forward to the late-breaking data presentation of our simplified trial at TCT, studying post-implant drug therapy using Watchman FlexPro and assessing whether a less intensive drug regimen may help mitigate post-implant bleeding risk. Turning to EP, sales declined 5% with a decline of 8% in the U.S. and 2% growth internationally. We estimate that the cyber incident contributed to roughly half our MIS primarily within our international region. But within the quarter, we continue to expand our OPAL footprint and drive more utilization of our mapping systems with our fair wave and fair point catheters. The EP market has transformed over the past few years led by our differentiated fair pulse platform. We have seen our strong market share position erode as new technologies are introduced and adoption of these different PFA form factors has been highly dynamic. While the cyber incident has accelerated some of the share shift, we do expect continued erosion of our PFA share position until we launch Ferrowave Ultra, now expected in early 28. We expect our EP performance to meaningfully improve in 28 as we expand our PFA ecosystem with 2D Ice in the second half of 27 and Ferrowave Ultra in 28 and Ferriflex, a wide area focal catheter, in 29. In the near term, we're focusing our teams where we know we can win. We have the most utilized and studied technology for de novo atrial ablation procedures with our fairway catheters. We have a differentiated portfolio available including our VersaCross transseptal needle and Watchman technology and we continue to invest to bring differentiated innovation to this large and fast-growing market. In closing, I want to restate that I remain very confident in Boston Scientific's long-term outlook. We operate in attractive markets with approximately 75% of our business historically growing approximately 66% for many quarters. We have an impactful cadence of future growth catalysts anticipated in 27 and 28 that we expect to drive meaningful improvement to our growth profile in 28 and beyond. We remain focused on execution, delivering our updated 26 guidance, taking appropriate action to evolve our organization that will create greater focus, speed, and accountability while ensuring we are continuing to invest in our long-term growth drivers. I'm incredibly grateful to our global employees for their resiliency and winning spirit. And across all of our businesses and regions, I've seen our colleagues step up in extraordinary ways, adapting quickly and supporting one another and doing what it takes to ensure we are focused on what matters, improving patient lives through a relentless pursuit of innovation. With that in hand, I'll hand over to John to provide more details.

Thanks, Mike. Before I provide details on our third quarter financial performance, I want to express my gratitude to our customers, physicians, and employees for their patience and partnership as we work through the recent cyber incident. I'm very proud of our global teams who have worked diligently to restore operations and continue to support our customers and the patients that they serve. The cyber incident caused significant disruption to our business operations and it materially impacted our third quarter financial results. Despite these challenges, we remain focused on taking the necessary actions to drive improved financial performance. So turning now to the quarter, third quarter consolidated revenue of $5,138,000,000 represents 1.5% reported growth versus third quarter 2025 and includes a neutral impact from foreign exchange, which was in line with expectations. As a result, operational and organic revenue growth were also 1.5% in the quarter, Thank you for joining us today. declined 3% versus 2025, below our third quarter guidance range of 80 to 82 cents. As Mike mentioned, third quarter results include an approximate 7 cent unfavorable impact from the cyber incident, primarily driven by lower than expected sales and the additional manufacturing and operating costs associated with the cyber incident. Adjusted gross margin for the third quarter was 68.0%, representing a 300 basis point decrease versus the third quarter of 2025, primarily driven by unfavorable manufacturing absorption during the cyber related disruption. Third quarter adjusted operating margin was 26.5%, contracting 150 basis points versus the third quarter of 2025, primarily driven by the impact of the cyber incident on gross margin. On a gap basis, Third quarter operating margin was 16.1%. These results include an approximate $80 million charge primarily related to certain product liability cases. Moving to below the line, third quarter adjusted interest and other expenses totaled $124 million, which was in line with expectations. On an adjusted basis, our tax rate for the third quarter was 14.3%. which was higher than expected due to certain discrete tax items. Fully diluted weighted average shares outstanding ended at $1,452,000,000 in the third quarter and free cash flow for the third quarter was $867,000,000 with $1,047,000,000 from operating activities less $180,000,000 in net capital expenditures. As of September 30th, 2026, We had cash on hand of $609 million and our gross debt leverage ratio was 1.9 times. Our capital allocation approach remains disciplined and growth-oriented. Our top priorities remain strategic tuck-in M&A and opportunistic share repurchases while we continue to evaluate and fund the opportunities that we believe will create the greatest long-term value for our shareholders. We look forward to closing our acquisition of Penumbra, which we believe will strengthen our long-term growth profile through its innovative portfolio and strong strategic fit within our cardiovascular business. In addition to Tuck and M&A, we're leveraging strategic partnerships to advance innovation, ensuring we're directing capital toward high growth opportunities. Consistent with this approach, we recently entered into an agreement with Blackstone Life Sciences, to co-fund the development of our Vitalist circulatory support system for the treatment of patients with cardiogenic shock. Under the agreement, Boston Scientific will receive funding from Blackstone, which will be recognized as a reduction to R&D expense as the related costs are incurred. Upon achievement of certain milestones expected starting in 2030, Blackstone will be eligible to receive a return on the actual amount funded for the program plus royalties on sales of Vitalist. This agreement allows us to continue advancing Vitalist while accelerating investments in other high growth opportunities. Before I discuss guidance, I want to acknowledge that we need to rebuild confidence in our forecasts. We've implemented meaningful enhancements to our forecasting process, which we believe provide a stronger foundation for more accurate forecasting going forward. So now I'll walk through our guidance for the fourth quarter and full year 2026. We now expect full year 2026 reported revenue growth to be approximately 4.25% versus 2025. Excluding an approximate 50 basis point tailwind from foreign exchange based on current rates, we expect full year 2026 operational and organic growth to be approximately 3.75%. We expect fourth quarter 2026 reported revenue to decline in a range of down 3%, We anticipate no impact from foreign exchange based on current rates and therefore expect fourth quarter 2026 operational and organic revenue to also decline in a range of down 3% to down 1%. As Mike mentioned, our fourth quarter guidance contemplates a headwind from the cyber incident reflecting elevated customer ordering at the end of the third quarter, which we expect to normalize over the course of the fourth quarter. We expect full year 2026 adjusted gross margin to be below full year 2025, reflecting a less favorable product mix, investment in our global supply chain and quality systems, and the additional impact of the cyber incident. We now expect full year 2026 adjusted operating margin to be approximately 27.6% reflective of gross margin pressures. We continue to expect full year 2026 adjusted below the line expense to be approximately $485 million. Under current legislation, including enacted laws and issued guidance, we now expect a full year 2026 adjusted tax rate of approximately 12%. We expect full year 2026 free cash flow to be approximately $3.6 billion reflecting a reduced operating income outlook. We expect full year 2026 adjusted earnings per share to be in a range of $3.16 to $3.18, representing growth of 3% to 4% versus 2025, including an approximate $0.06 headwind from foreign exchange. We expect fourth quarter adjusted earnings per share to be in a range of $0.77 to $0.79. As Mike outlined, we anticipate continued top line pressure into 2027, which we expect will make it challenging to grow revenue and Adjusted Earnings Per Share, excluding Penumbra. We expect our underlying business dynamics in Q4 to persist into 2027 and believe our fourth quarter guidance provides a reasonable baseline for next year's revenue and adjusted earnings per share outlook. Importantly, we're taking decisive actions to drive greater focus, speed, and accountability, most notably through our company-wide restructuring program. This comprehensive initiative is focused on org structure evolution, supply chain optimization, back office transformation, and reductions in other categories of spend. We expect these efforts to deliver sustained cost efficiencies while allowing us to prioritize investments that support long-term growth. In closing, we believe we're well positioned in attractive markets, we're making the right investments, and taking the necessary steps to strengthen our financial performance. I'm confident that these actions will position us to stabilize Boston Scientific in 2027 and then drive improved revenue and adjusted earnings per share growth in 2028 and then further acceleration in 2029. For more information, please check our investor relations website for third quarter 2026 financial and operational highlights, which outlines more details on third quarter results and 2026 guidance And so, Lauren, with that, I'll turn it back to you to moderate the Q&A.

Thanks, John. Drew, let's open it up for questions for the next 30 minutes or so. In order for us to take as many questions as possible, please limit yourself to one question. Drew, please go ahead.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star then 2. Again, please limit yourself to only one question. At this time, we will pause momentarily to assemble our roster. The first question comes from Robbie Marcus with JP Morgan. Please go ahead.

Hi, good morning. Thanks for taking the question. A lot to dig into. I'll stick with one here and focus on guidance. Maybe you could, and there's a lot of questions I'm getting from investors, so hopefully this will help clarify. How do we think about sort of the actual underlying impact from Thanks a lot. John, do you want to take the cyber question?

Sure. Yeah, thanks, Robbie. So let me lay out the impacts of cyber. So in Q3, we estimate a roughly 300 basis point headwind to our revenue from cyber. So call it roughly $150 million of headwind on the top line and then bottom line impact to EPS of $0.07. So at the impact of the lost sales, we did have unfavorable manufacturing absorption that contributed to the $0.07 of EPS as well as other direct costs, expedited shipping, cost of experts that impacted Q3 cyber. For the fourth quarter, we expect an ongoing impact of approximately 200 to 300 basis points. And so what we saw, Robbie, coming out of the cyber incident is a level of stocking of from customers. And over the fourth quarter, we'll burn off some of those inventory levels. So that's why you see the ongoing impact into the fourth quarter of that 200 to 300 BPS. And that drops through down to EPS roughly four to five cents of impact in the fourth quarter.

Yeah, maybe just some comments on the 27 question. You know, when we think about it, we obviously aim to... We really do expect some of the underlying business dynamics that we see in the fourth quarter to persist in 2027. So if you look at that, you've got a number of our businesses doing extremely well, interventional cardiology, vascular, IONE, endoscopies, underlying business is doing quite well despite the pressures in China. So the overall base business, we feel, is consistently growing about 6%. We expect about a point of impact due to the comprehensive China pricing issues, and that represents about 75% of the business. So the two key areas, questions are, what will be the impact of Watchmen and EP in 2027? So for the basis of our early framing of guidance, we wanted to be appropriately conservative. So we're assuming that the Watchman market dynamics do not improve over current state. And we're obviously doing a lot to turn that around. But those underlying markets today are growing about negative seven, negative eight-ish percent in that area. And we do have a competitive launch coming in 2027. So the error bars around the market, around the Watchman assumptions are quite wide, given that we are assuming no improvement in the market, despite some of our efforts. and anticipated label change, where we're assuming that the market baseline stays similar to Q4 with competitive entry in 27. Similarly in EP, EP will be a challenging year for us in 27 and we're very optimistic about 28 and 29 based on our product launch cadence. But in 27, we are lacking new product launches. The market continues to be fairly healthy, but we expect to continue to see share in 2027 in EP similar to the rates that we've seen in the second half of 2026. Until we successfully launch a ICE program in second half of 27, an excellent platform upgrade with FerriPulse Ultra, ideally late fourth quarter, early first quarter 27. And as you know, we've initiated our clinical trial of our FerriFlex platform, which will be early 29 launch. So hopefully that gives you some context for 2027.

Thank you. The next question comes from Larry Beagleson with Wells Fargo. Please go ahead.

Hey guys, thanks for taking the question. So super helpful, you know, color on 2026 and 2027. Mike, just talk about your confidence in improving sales and EPS growth in 28. I'm not looking for specifics, obviously, but what are the drivers of It looks like Ferriflex, the launch, was pushed out to 2029 in the slides, if I'm reading that correctly. And I think there are some concerns about new PFA competition coming in 28 with a novel waveform. And so how are you factoring that in? Thank you.

Yeah, thank you. Just a backdrop a bit, and maybe not new news. 23 to 25, we experienced a very high growth cycle, much on the heels of our base business being strong. and the tremendous growth of Watchman NDP. We also had a decent first half despite some of our forecasting challenges growing 8% in the first half of 2026. We are clearly in the middle of a down cycle which is a short-term phenomenon for Boston Scientific that you will see that we predicted in fourth quarter based on our guide in 2027. We are very confident about the return to growth and kind of pushing off the bottom in 27 as we enter 28. and a high level formula for growth in 28, you know, potentially below our WAMGR, but solid growth and growth above our WAMGR in 29 really are the, if you look at our three segments, our biggest segment as you look at 2028 will be our interventional cardiology, vascular and penumbra business. We expect that collection of businesses to comfortably grow above their market WAMGR as penumbra goes organic and they continue to drive excellent momentum and with a very strong portfolio cadence in that business with our IVL platforms and peripheral and vascular potentially hypertension in 2028 and a strong cadence of imaging capabilities as well as launches within our VT IONI platform. So that will represent our biggest segment very much on offense growing above WAMGR and propelling the growth of the company. Our med-surg business with a number of key launches. You saw a couple of key approvals just this quarter in our geology business. We expect our med-surg segment businesses to essentially grow at our market WAMGR or grow at their market WAMGR, call it mid-single digits. So then it really comes down to what happens to EP and Watchman and CRM. The good news in CRM is we'll be launching a significant platform launch with Denali, our defibrillator platform. which we expect CRM will comfortably return to growth in 2028 to help that segment. And then in Watchmen, we will anniversary a competitive launch in 2028. We'll be in the midst of a trial of our fourth generation platform. As you know, we've got very, very strong share in Watchmen and we expect to maintain that strong leadership position during this case. We'll also aim to have a approved label change ideally by 2028. So we see the Watchmen business Maximum down is in 2027 and will return to healthier position in 2028. Similar with our EP business, again, it's driven by portfolio and cadence. And as I mentioned before, we'll have our ICE platform launch, our full year of Ferropulse Ultra and pending approval of our Flex business. So we expect the overall Rhythm Solutions business with a stronger growth in CRM and improving cadence of effective launches in EP and Watchman to significantly improve the growth profile of Rhythm in 28, whereas 2027, that segment's driving the challenges.

Thank you. The next question comes from Joanne Wench with Citi. Please go ahead.

Good morning and thank you for taking the questions. Two parts. One part is internally, it sounds like you're doing quite a bit to build the bridge between today and 2028, which could include any number of things, such as Salesforce realignment, expense reduction, et cetera, et cetera. Could you please address what you're doing internally to build that bridge? And then second of all, the pre-numbered delay, is there a way to share the steps to that resolution and thank you.

Sure. We're certainly, and John, you can comment a bit more. As you'd expect, we're aligning our cost structure to our reality of what we see in fourth quarter in 2027. So the team has gotten ahead of that, you know, about six months ago and are implementing a pretty meaningful restructuring program, both in terms of, you know, where our discretionary spend Headcount, we want to de-layer the company a bit more, increase some of the spans and layers in the organization, and get after some SG&A offsets. So that program is very much in flight. Importantly, we maintain the really important cultural values of Boston Scientific that makes it a special place to work and focus on advancing science for life and our winning spirit. So we believe we will continue to drive an important culture. within Boston Scientific focused on the future despite the needed restructuring initiatives. Importantly, while we're doing that, we're also continuing to invest in these big growth platforms that will drive the company's growth back to decent growth in 28 and above market WAMGIR and entering all these new markets that we're taking on. So I think it's important that we show the discipline to drive those cost savings and invest in our growth drivers at the same time.

I just add with the restructuring program, I'll fill in a couple pieces there. So anticipate to achieve over $500 million of savings from the program over the next three years. Been some tough decisions, but I've been very pleased with how we've been tracking. We're a little ahead of where I thought we'd be at this point in the program. I expect to achieve over half of those savings exiting 2027. So back to Larry's question. that contributes to our confidence in 2028. Mike went through the top line, but from an EPS perspective as well. Program itself focus on streamlining org structures, back office transformation to streamline our processes, leverage shared services. There's a supply chain optimization looking across our global supply network to better leverage technology, AI and streamline across supply chain and then a broader initiative just looking at other pools of spend like T&E meetings, like use of external vendors to reduce our spend there. So it's a very broad initiative, but very focused. And again, I've been pleased with how we've been tracking. We're a little ahead of schedule there.

I'm sorry, Joanne, on the Penumbra comments, maybe some good and bad news. Overall, we're super impressed with the Penumbra results. for 2026. And the good news is, with a bit of an extended closing period, we've continued to get to know the Penumbra team extremely well, how they run the business, the synergies that are very obvious on growth side and some on the cost side when you combine two powerful businesses with interventional cardiology vast from the Penumbra business. So we're very bullish on the Penumbra team, the progress, the innovation pipeline they have. and how they will work very seamlessly within Boston Scientific to drive ongoing strength and number in our ICBT business. And the regulatory process has taken a bit of time. We're still very confident in closing the transaction, but based on some of the discussions with the regulatory authorities, we anticipate an early first quarter close.

Thank you. The next question comes from Rick Wise with Stiefel. Please go ahead.

Good morning. Mike, I was hoping maybe you could further unpack the med-surg outlook a little bit. You said, I think just a moment ago, you expected the combined business to grow mid-single digits sort of in line with the way I'm aware market growth. But maybe Talk us through each piece. Historically, these are businesses that in totality grew seven or 8%. Why can't we dream or aspire for you to get back to that kind of range? And maybe what needs to happen in urology and endoscopy and neuro to get back there? And what are the key drivers here? as we look ahead to the next year or two. Thank you.

Yes, I would agree. You know, five to six mid-single-digit growth is not what we want MedSearch to be and not what it's been and not what the potential is. Just to break through the three of them really quickly, neuromodulation is doing very well. Our brain franchise is doing well. We've really diversified our pain business into more minimally invasive alternatives in addition to spinal cord stem. And we continue to have additional programs growth drivers in that business with a whole new SCS launch that will happen in 2028. So overall, I would assume kind of over a period of time, the neuromod business will continue to be accretive to the MedServe's growth profile. Our endo business is very strong. We've got a list of quite a few product launches in that area with scopes and a versatile platform and a number of others. The headwind in 2027 for endo is China. Significant pricing erosion we will see in our China business in 2027. So the endo business will anniversary that China pricing impact in in fourth quarter 2027. So we expect, you know, kind of our endo business to be that mid single digit growth range in 27 accelerated 28 based on launching and getting lapping that that China piece. The challenge, quite frankly, has been urology. And we've been wrong on calling the growth trend in urology. Obviously, a lot of efforts are going on in that area. So we expect the urology business to improve in 2027, not back to its previous levels, but certainly not at a negative growth profile that we see in 2026. And this business is all about people and portfolio. We just announced in our script there, we've got three stone launches that are three stone approvals, which has been the one segment that's been lagging the growth for that franchise. So we expect our core stone business to improve in 2027. And as you know, you've heard for many quarters now, we've struggled a bit with the Axonix integration. We've done great with the Silk Road integration, with the Nalo integration, but we've struggled with Axonix based on significant commercial turnover. We've done a lot to hire a lot of new reps and clinical people in that area. It takes a bit of time for them to get seasoned in their territories. We expect to see improvement in that in 2027. So in short, you know, 27, we think endo-euro will be in that kind of lower to mid single digit range and neuro slightly higher. And endo and euro both lapping significant China BBP pricing in fourth quarter 27 to have a stronger 28. But overall, we do aim to get back So kind of that seven to eight-ish numbers that we used to see.

Thank you. The next question comes from Travis Steed with Bank of America. Please go ahead.

Hey, thanks for the question. I wanted to ask on the pipeline, there was a lot of things kind of across the board pushed out. Is there something bigger picture going on on the pipeline, like a de-risking the pipeline? And also, John, you mentioned better forecasting abilities. So just curious if you can elaborate on that as well. Thanks a lot.

Yeah, Travis, I'll start on the forecasting question and then turn to Mike and Joe's in the room here to go through the pipeline. 2026 has been a challenging year for us. As Mike said, after several years of exceptional growth, driven in large part by EP and Watchman, we've seen that cycle turn. So we're in a tough business cycle now because of the dynamics predominantly within those two businesses. And we've struggled to forecast that this year. And we need to be better. I recognize that. Mike knows that. Joe knows that. The whole team here knows that. We feel we've got a clearer picture of the business dynamics now. We've laid that out. We're taking action with the restructuring program. We have our new operating model, which will drive greater focus, greater speed. And from a forecasting process perspective, we've made a number of enhancements implemented more sensitivity and scenario analysis, more objective models, more third party data that we pull in. So we feel with all of that together, you'll see improved forecasting actually from us on a go forward basis. And, you know, with the guidance that we put forth for the fourth quarter here and the framework for 2027. Very, very focused on delivering on that.

Mike, Joe, pipeline? Maybe just the quick things. We pride ourselves in executing. 26 has not been the year we've executed so well. So we've done a lot to tighten our performance. John just went through some of our forecasting areas. In terms of overall business, the business has gotten larger. So one of the reasons for Joe now becoming COO and breaking into the sector is to have even more focus on these sectors so we improve our efficiency and reliability in terms of the dates that we give you for these big launches. We do have a very impressive pipeline that's coming for the company. We're down for a bit, but we're far from out. And these pipeline products will come through and Return Boston Scientific to its high performance reputation that we want to earn back with you. Some of these products are complicated with clinical trials and regulatory processes. So we've kind of seen about a six month delay in some of these big platforms. We want to make sure we launch them at high scale with high quality and we aim to do that. But the pipeline is very rich and we can go through some of those elements or Joe can provide more detail. but we're not happy with some of these slips. We put a lot of focus on it and we know the impact that it has in the business.

Thank you. The next question comes from Josh Jennings with TD Cowan. Please go ahead.

Good morning. Thanks for taking the questions. Mike, I was hoping to just clarify just the outlook for the WAMGRA as you've given Good high-level color on 27 and 28. It's 2026, WAMGR is 7%. You've got some pipeline products potentially could expand, but is the assumption baked into some of your high-level color in the out years that that WAMGR is sustainable at that 7% level? And then just a side question, maybe just hoping to get an updated outlook on WAMGR. Thanks for taking the question.

Yeah, on the WAMGR, we're not used to growing below our WAMGR. We think it's still about 7%. We've seen some pressure overall in maybe the euro market and endo markets that have pushed it down a bit to that 7% level. EP market continues to remain very strong. Obviously, the Watchman market has pulled that WAMGR to that 7% range, but the Watchman market's about a $2 billion market overall. Importantly, as you look at the LRP, we're entering markets that grow faster than our WAMGR. The IVL market, potentially the hypertension market, and some big launches in EP and segments that we don't play in today with ICE and also with Ferriflex. So I think overall, kind of that 7% WAMGR today and then you're adding Penumbra which is at scale a creative WAMGR to the business or at least in line. So I think that kind of 7% range now and maybe 7 to 8 over the next three years is about the right way to call it. When we look at 27 based on the comments that we made, I'm sorry, when we look at 27 obviously growing below the WAMGR based on the comments that we made and then 28 we aim to get back to closer to those WAMGR numbers and beyond.

Thank you. The next question comes from Marie Thiebaud with U.S. Bank BTIG. Please go ahead.

Hi there. I wanted to circle back to the commentary on no growth for 2027 when it comes to EPS. We heard John talk about some of the restructuring efforts that are being put in place. I know this quarter you were able to offset things like expedited shipping costs. Related to the cyber attack, you were able to offset some of that with better OPEX control. So thinking about all of this, when we think about no growth and adjusted EPS next year, is it really about product mix and some of those less profitable products being the contributors to sales growth? Or why else shouldn't we expect some adjusted EPS growth given some of the efforts you're putting in place? Thanks for taking the question.

Mix is the biggest factor, Marie. As we talked about, do you see pressure on the top line? That pressure predominantly is with Watchman and EP. So we'll feel the mixed impact of that within gross margin. And then with the China pricing pressure that we see escalating, that will also impact gross margin in 2027 as well. And we do have some investment that we continue to make across supply chain, our quality systems. So as you look ahead to 2027, and we'll give the guide and all the detail in the Q4 earnings call, but expect significant pressure and gross margin next year. And we'll continue to invest in the portfolio. We have a lot that we're excited about in the portfolio and want to make sure we're fully funding those initiatives. Again, we will have restructuring that will help to offset some of those costs. We'll continue to be very disciplined with spend in 2027. But as you put that all together, I'd expect our EPS next year to be roughly in line with revenue. And again, on our commentary, expect to be challenged to grow next year.

Thank you. The next question comes from Pito Chickering with Deutsche Bank. Please go ahead.

Hey, good morning, guys. Thanks for taking my question. Can you talk about what's causing the delay of the Thrive data and therefore the Vivius launch and on Vitalist? I think you said you weren't looking at high-risk PCI. Can you talk about what you're seeing with the product and do you think the market is still attractive with JustShot? Thanks.

Yeah, Pito, it's Ken. Maybe let me start with Vitalist. So, you know, they're was data from a competitor released last year that I think called into question the broad use of mechanical circulatory support for high-risk PCI. We still believe that there is a role for that therapy there, but we do, I think as a field, need to figure out better patient selection. The pivot to first studying cardiogenic shock, I think it's very important to realize just how much of an unmet medical need there is in AMI cardiogenic shock. There is still mortality approaching 50% in patients who present with acute MI in shock, and it occurs in up to 10% of patients who are having ST elevation MI. Data was presented a couple of years ago. The danger shock trial showed Beyond a doubt that mechanical circulatory support can reduce mortality in those patients. So this is both an area of major need and an area where we know that mechanical circulatory support can improve outcomes. And we believe that with our Vitalist platform, we have differentiated advantages over the current incumbent in terms of dealing with shock. Vitalist has a novel catheter design that improves positional stability. That's particularly important in dealing with shock patients where the catheter needs to stay in place in the CCU for a longer period of time, along with strategies aimed at just minimizing the complexity of managing these patients and minimizing vascular complications. And so that's why we're so excited about the potential for the Vitalis platform and why actually we like the move into AMI shock as the first trial.

and then on Thrive.

On Thrive, really, again, it's just a matter of continuing to execute on enrollment in clinical trial. Enrollment, I think, frankly, has been a little bit slower than we would have hoped as we navigated the transition and the integration of the SamaV team into the Boston scientific ecosystem. But again, you know, are confident that we can get that on track and that we will eventually, finish enrollment in the trial, believe in the technology. We do believe that ultrasound is the best of the energy sources that we can use for doing renal denervation. And we continue to believe that the Thrive platform has differentiated advantages over the two current approved devices for renal denervation for hypertension.

Thank you. The next question comes from Matthew O'Brien with Piper Sandler. Please go ahead.

Morning, thanks for taking that question. Just to follow up on the pushback on the pipeline, because that's what we're all kind of banking on at this point is the pipeline coming through. You just mentioned Tybus and what's happening there, but with Ultra and with Flex, is it product related? Is it enrollment? Is it manufacturing? What's slowing things down in terms of getting those to market, and then just anything more you can provide on Penumbra and the modest push on the timing there. Is it more regulatory questions, specific product-related questions, just anything on those things? Thanks so much.

Yeah, we won't provide any more updates on Penumbra other than what I commented on. We're very bullish on the transaction, and we're aiming to close that as early as we can. Likely it'll be pushing into early 2017. In terms of some of the product delays, Joe's here. Joe, you can leave your comments.

Yeah, I'll take Ultra first. As you know, Ultra is a PMA supplement, does not require a clinical study. So most of the issues we have there are just on getting through what we call design verification and validation. And if you look at Ultra, that's a hardware, software, and a catheter project. So the, let's call it one quarter delay that you see is just a summary of issues that we have to work through with DV has nothing to do with anything on the clinical trial because we don't need clinical data to get ultra approved. On Ferriflex, I would call it three things. It is related to our negotiations with FDA on getting the actual are all IDE approved. We've had slight delays with CMS full approval and there are some operational challenges getting everything that's needed to complete a Fairflex case done to expand the number of sites. So we believe we will have that largely. We just got CMS and we believe our supply chain to support the study will be pretty robust by end of year. So I think when we get on the Q4 call, a good question for us will be how is enrollment going in the Fairflex study, which we expect that to ramp each successive week and month going forward.

Thank you. I understand there's time for one last questioner. That would be from Matt Taylor with Jefferies. Please go ahead.

All right, thanks for taking the question. I wanted to follow up on the number, not on the timing, but could you talk about the kind of growth that you expect from that platform? And before you had said in the first year it could be six to eight cents dilutive, but some of the math there has changed. I was wondering if you could update us on that at all. It's decelerated a little bit in the last couple quarters, so I just wanted to get an update.

Yeah, thanks, Matt. I'll take the dilution piece, and then Mike and Joe can give quick comments on the growth profile. But we're excited to add Penumbra. You can see from their results, they're performing very well, high growth. It'll be a great addition to our cardiovascular portfolio. So we announced Penumbra in mid-January. We anticipate... closing in early 2027 at this point. At the time of announcement, we had said we expected 6 to 8 cents of dilution. That assumes no divest shares. That assumes interest rates that were in place at that time. We have seen increases in interest rates since then, so that will drive Thank you so much, John.

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