Good day, and welcome to the Boston Scientific Investor Update. All participants will be in listen only mode. Please note this event is being recorded. Would now like to turn the conference over to Susan Lisa, Vice President, Investor Relations. Please go ahead.
Thank you, Andrew. Good morning, everyone, and thanks for joining us. With me on today's call are Mike Mahoney, Chairman and Chief Executive Officer Dan Brennan, Executive Vice President and Chief Financial Officer Doctor. Ian Meredith, Global Chief Medical Officer and Joe Fitzgerald, Executive President, Executive Vice President and President, Interventional Cardiology. We issued a press release earlier this morning announcing the voluntary recall and product discontinuation of the LOTUS Edge aortic valve system and will spend the duration of this morning's call discussing our decision.
Before we begin, I'd like to remind everyone that on the call, operational revenue excludes the impact of foreign currency fluctuations and organic revenue further excludes the impact of certain acquisitions, including BTG through August 15, as there are no prior period related net sales, as well as the divestiture of the Global Embolic Microspheres portfolio and the intrauterine health franchise. On this call, all references to sales and revenue unless otherwise specified are organic. Of note, this call contains forward looking statements within the meaning of federal securities laws, which may be identified by words like anticipate, expect, believe, estimate and other similar words. They include, among other things, the impact of the COVID-nineteen pandemic upon the company's operations and financial results, statements about our growth and market share, new product approvals and launches clinical trials cost savings and growth opportunities our cash flow and expected use our financial performance, including sales, margins and earnings as well as our tax rates, R and D spend and other expenses. Factors that may cause such differences include those described in the Risk Factors section of our most recent 10 ks and subsequent 10 Qs filed with the SEC.
These statements speak only as of today's date, and we can disclaim any intention or obligation to update them. At this point, I'll turn it over to Mike for his comments. Mike?
Thanks, Suzy. Good morning, everyone, and thanks for joining us on short notice. Earlier today, we announced initiation of a global voluntary recall of all unused inventory of the Lotus Edge aortic valve system due to complexities associated with the product delivery system. Importantly, the voluntary recall is related solely to the delivery system and not the valve. The valve continues to achieve positive clinical performance post implant, and there is no safety issue for patients who currently have 1 implanted.
The complexity of the LOTUS Edge delivery system has resulted in the valve's current niche role in the market despite our commercial efforts. Given the additional product development work required to reintroduce an enhanced delivery system to the market and reduce the training and case support necessary to scale clinical use and ensure competitiveness, we've made the difficult decision to retire the entire LOTUS platform immediately. While we are confident in the differentiated benefits of the LOTUS Edge Valve and its positive clinical outcomes, we have determined that it's not prudent to sustain the level of investment required for delivery system change and the increase in burden of training and case support requirements. In addition, we face increases in both manufacturing complexity and the investment required for clinical scalability, which has led us to decide to stop all investments, including all commercial, clinical, R and D and manufacturing activities on the LOTUS product platform. After much analysis and careful consideration, we've determined that we can better serve patients by prioritizing and focusing our financial and employer resources on one valve platform, the Accurate Neo2 system.
Accurate Neo2 offers customers ease of use, low rates of PBL, best in class pacemaker rates and exceptional hemodynamics. It also features a much more flexible and straightforward manufacturing profile than LOTUS Edge both today and longer term. We're very encouraged by our ongoing launch in Europe and confident that this platform that will best serve patients, customers and shareholders over the long term. We are as committed as ever to growing our structural heart valve footprint, including ACURATE neo2, SENTINEL, Safari Guidewire and an early stage mitral millipede program. And we're making these difficult but necessary decisions now so that we can place greater emphasis upon this portfolio and ensure strong execution moving forward.
In addition, our structural heart franchise has its core foundation, the market leading watchman flex device. We estimate the left atrial appendage closure market will represent a $1,500,000,000 opportunity in 2024 and over $3,000,000,000 by 2026 and beyond, given the ability of WATCHMAN FLX to reduce the risk of stroke discontinue lifelong oral anticoagulant therapy for over 33,000,000 atrial fibrillation patients worldwide. We continue to advance our core LAC technology as Flex uniquely offers the ability to reposition and retrieve the device as well as our body of clinical evidence in the currently enrolling Option in Champion AF studies. Option seeks to expand indication for WATCHMANFLEX in the post afib ablation patients, while Champion AF will expand into lower bleeding and risk patients. Beyond structural heart, we've made important growth drivers across each of our business units with a robust cadence of new product launches across the portfolio, such as Ranger DCB, Exalt D and B, PolarX, Acura Neo2, WaveWriter Alpha, Versys Genus and LuxDx.
We also have important recent reimbursement wins in key areas of the portfolio, including Axalt D, Eluvia and ECOS. Our pipeline in 2021 and beyond also positions us well in high growth markets with new adjacencies with category leading portfolios that offer us access, partnership and expansion of our customer reach. Financially, this decision is expected to result in estimated total pretax GAAP charges of approximately $225,000,000 to $300,000,000 due to inventory, fixed intangible asset and certain other exit charges. Approximately $100,000,000 to $150,000,000 of these charges will impact the company's adjusted results. The vast majority of these charges will be recorded during the Q4 of 2020.
The LOTUS decision is expected to be accretive to GAAP and adjusted earnings per share in 2021 by $1 to 0 point 0 $2 and neutral to EPS thereafter. Importantly, this decision gives us the ability for greater commercial, clinical and development emphasis upon the other aspects of the IAC portfolio, including ACURATE NEO2, SENTINEL, our Millipede mitral program and our suite of complex PCI products as well as other areas. This has been a challenging decision, and we're confident that we can better serve patients by prioritizing and focusing our financial employee resources on 1 valve platform, the ACURATE NEO2 system as well as the multiple high growth opportunities across the broader Boston Scientific portfolio. We remain highly confident in our ability to grow at the high end of our peer group, improve operating margins, deliver double digit EPS growth and strong free cash flow. I'll be joined by Doctor.
Meredith, Joe and Dan and I, and we're happy to take any of your questions.
The first question comes from Bob Hopkins of Bank of America. Please go ahead.
Great. Thanks and good morning. Good morning. Good morning. Two quick questions, I'll just state them upfront.
First to level set, I had modeled about 1 $150,000,000 of LOTUS Edge sales for 2021. Is that ballpark where you guys were thinking before this as well? And then the second question, just to get it out there, is that I hear you that it's I treated the earnings for next year, but by a little bit. But one potential concern is that with no U. S.
TAVR program until 2024, you have a less attractive interventional cardiology portfolio overall relative to your peers. And so wouldn't it make sense in your view to maybe temper expectations around the interventional cardiology growth opportunity until you're back in the TAVR market in 2024? Thank you.
Sure, Bob. Why don't I take the first one and give you the raw numbers. So in 2019, Lotus was approximately $60,000,000 in revenue. In 2020, it's on track for approximately $75,000,000 in revenue. And in 2021, our expectations were $125,000,000 in revenue.
Yes. And so just a broader cardiology question and maybe Joe can also pipe in. So Dan just gave you the numbers for 2020 estimate, 75,125 is our AOP target for 2021. And so broadly in cardiology, you've got basically 3 businesses here. The largest being our coronary business, which is really led by our business in Asia Pac.
DES continues to get smaller across the company. Bob, you're also aware of the WATCHMAN program, and that continues to exceed expectations in 2020. We've got big plans for that in 2021 and beyond. And clearly, in TAVR, we have a hole in the U. S.
We'll do everything possible, Joe and the team, to enroll the and our clinical team to enroll the ACURATE study in the U. S. And we're launching that platform now. So we clearly would rather have a TAVR platform right now in the U. S, but we think this is the right decision based on the script that I just read you.
And we have a lot of confidence that we can really now resource properly and effectively the ACRA NETO2 program as well as other opportunities in complex coronary. And also just improve the focus on other areas of BSC that are very exciting in terms of our growth profile. So we'd rather have a TAVR valve in the U. S, we think this is the best long term decision for
the company. Yes, Mike, and I would add, we showed a lot of the things that are coming at our TCT call on the complex PCI front. We've still got launches coming on the DES front. We talked about our imaging growth platform and you've already mentioned it. We are very bullish on WATCHMAN FLX.
We're call it 4 or 5 months into that launch right now and we told you some of the statistics and some of the KPIs that we were looking at and those all continue to trend. So I think it's just refocusing the group on our growth priorities that we have, which are many across our Interventional Cardiology group. We will maintain a structural heart sales force to drive SENTINOL, our accessories, our safari wire. And I think this allows us to again challenge ourselves on the accurate neo2 timing in the U. S, I.
E, the IDE enrollment being the primary driver in terms of determining the timing on that as well.
Thank you.
The next question comes from David Lewis of Morgan Stanley. Please go ahead.
Sure. Just a couple for me. I want to just stick with growth here, Mike, for a second. I think for the last couple of years, the company has talked about the 6% to 9% profile. And I think right or wrong, there's been a view that WATCHMAN and TAVR gets you to the high end of that plan.
Some people I think initially thought it could get you sort of over that plan. And on the facts, I think TAVR is worth or LOTUS itself is worth a little over a point of growth, a point to point in a quarter. So you still could sort of be in that range. But given investors are still focused those two platforms and the view that got you
to the higher end of
the range, how should investors sort of now think about it? Is it as simple as just saying it's 6% to 9%, we take out a point and we're still within that range? How can you sort of convince people that the upper half of that 6% to 9% is sort of still on the table if you had this sort of issue in the TAVR program? And then I have a couple of follow ups.
Sure. Yes. If you picture a world where there's no COVID and you take away all the comp challenges, because obviously, we're going to have very easy comps in 2020. And then so if you neutralize for that, the 6% to 9% company that we said before, we would take one basis point off the high end to 6 to 8. If you look at LOTUS, it kind of contributes about 50 to 60 basis points of growth.
And we also talked about the delays with our Accurate Neo2 platform. So on a combined basis there, we would clip off one point at the high end, which would take us to 6% to 8%. And we feel like there's many other growth accelerators across the company with the new product launches. So going forward, if you model that BSX ex COVID impact, we would call it a 6% to 8% versus a 6% to 9% based on the two movements in the structural heart category.
Okay. Very helpful. And then Mike, the other question is for more strategic. And I think when the company made a decision to
have a 2 valve platform, a lot
of investors questioned about what that said for LOTUS. So there's been a series of issues around sort of LOTUS, and to a lesser extent, extent accurate seemingly one after another. So I guess wonder just in your mind as you think back, what are some of the key learnings about the decisions that were made around LOTUS? And what would you say to investors to convince and this is very isolated to just a bad chapter with a bad product or a challenging product and it's not really related to the strategic thinking where there's not other issues in the core portfolios where these learnings, right, they could bleed into other parts of the business or other products?
Sure. I think if you look at the other parts of the business, they're doing ex COVID. We had strong improvement as
you know in Q3. Other businesses are
really growing faster than in their peer group. You look at our endo business, our euro business, the strength of the PI business, the neuromod business and really everything within cardiology except TAVR. So the rest of the business is performing extremely well. And we have struggled with TAVR, with the LOTUS platform for a number of years and now making a decision going forward that that's the best use of our resources to focus on accurate and complex PCI. So the other parts of the business are executing really enable us to really enable us to focus our resources in cardiology to best growth areas to get them back to the growth levels that we want.
So the LOTUS chapter has been a difficult one for the company. In terms of learnings, the biggest learning, I would say, overall is just the complexity of the manufacturing process with this delivery system. So the delivery system itself brings some very unique benefits to doctors in terms of its repositioning, but the ability for us to enhance this product in a profitable way for the future to be competitive just wasn't feasible. So rather than continuing to try to do that and dilute other company resources, we felt it's best to kind of cut bait now and really focus on other areas of the portfolio. So I think LOTUS is really a kind of a separate challenge for the company.
And we look forward to moving on beyond it. But the rest of the business, although the BUs and our product life cycle and cadence of pipeline approvals are pretty
strong. And Mike, it doesn't change the way you think about Accurate and the rollout of Accurate over time in the U. S? No.
I think if anything, it just allows our team that's the challenge with the dual valve portfolio is we had quite a bit of resources on both platforms. And so with ACURATE, with the performance we're seeing and the enhancements with NEO-two and the PBL and Doctor. Meredith can comment on it or Joe, we're very excited about that platform. It's a platform that can be the simplicity of manufacturing is significantly easier and more repeatable than LOTUS and has excellent valve characteristics. We have our next gen neo2, which we believe will improve the PVL, which has been so far the Achilles heel, I would say, the only Achilles heel of Vacker Neo2.
So we're excited to launch that in Europe. It will allow us to focus our R and D and manufacturing efforts just on one platform and kind of pull any overhang in terms of having to dual valve platform in terms of internal resources.
Great. Thanks so much.
The next question comes from Matt Taylor of UBS. Please go ahead.
Hi, good morning. Thank you for taking the question. So I guess I wanted to ask 2 things about NEO2. The first is, could this allow you any flexibility to pull forward that recent timeline that you gave for approval in 2024, if you could focus more resources on it? And then secondly, you gave us the numbers for LOTUS.
Could you just level set and give us your expectation for Neo2 in the historical so we can understand how that matched or didn't match our models?
Joe, you want to comment on the first one?
Yes. So obviously and it's not just the clinical trial enrollment that we're focused on, on NEO-two. So I think a couple of things are going to happen as a result of this decision. It will allow us because for instance in the U. S.
We have both the REPRISE IV study and an accurate NEO2 IDE. So this decision will put more resources on the enrollment of that IDE for sure. 2nd part on the product development, I don't want to underestimate the impact of going from supporting 2 valves to just getting after things like Accurate Neo2 Prime XL. That program has been ongoing and this will allow us to throw more people, more dollars, more effort into that. As well, it allows us when we think about true next generation products beyond Neo2, it allows us because we won't be chasing 2 valve platforms to have more resources and more focus on that.
I think in terms of framing up the second part of your question, we talked about what experience we had with LOTUS in the United States. I think we needed to get that experience, that 1st year of commercialization with Lotus Edge. But truth be told, the Europe team NIO2 in Europe than we did Lotus globally. So I think that kind of speaks to the customer reception and the ease of execution in Europe where we're primarily focused on accurate and accurate neo2. So we are convinced and have been convinced of the workhorse capability and the share taking capability of Accurate Neo2 globally.
And so Matt, we won't give you exact numbers on that, but I think Joe answered that relative to the Neo2, the European Neo2 outsold LOTUS globally in 2020.
Yes, Dana, that was helpful. Maybe just one follow-up. So with Neo2 now being going after another valve? Or do you think you're set on sticking with Neo2? And maybe just talk about your confidence in it in light of the recent scope results?
Joe, let me handle that one.
Yes. So I think Mike hit on it. Across all of the design characteristics of Neo2 and Acura with the original platform, there's a ton to like pacemaker rates, access to coronaries simplicity of use, ease of use. And if there is an Achilles heel, I don't like that term, but it's the PBL rate that we've seen with the accurate version 1. And we know that was the primary design element to NEO2 and I'll let Doctor.
Meredith weigh in, but we think ACTRATE NEO2 will have best in class PBL rates And maybe, Ian, you can comment on that as well.
Thanks, Joe, and thanks for the question. I fully support what you've just said with respect to ACURATE NEO2. As you know, the ACURATE NEO2 has 60% larger skirt. And in previous study that we performed with core lab adjudication, we saw that the PBL rates were consistent with best in class valves today with a 3% rate at 30 days and moderate severe PBL at 30 days and 2.5% at 1 year. So substantially better than the results that we saw with ACCURATE NEO, the original platform in the SCOPE trials.
Feel that the results in the SCOPE-one and SCOPE-two trials are accounted for by the PBL. And this has been addressed with the largest SCIRT. And in combination with all the other points that Joe mentioned, the rapid, efficient, simple deployment, the low pacemaker rate, in fact, best in class pacemaker rate for super expanding superannular valves, self expanding valves and the excellent hemodynamics all point to the possibility of very good outcomes in the U. S. Accurate IDE.
So we are confident that this could fulfill the workforce capability.
The next question comes from Robbie Marcus of JPMorgan.
Great, thanks. I was hoping you could walk us through the impacts down the P and L of how this will impact or benefit you. Where were you in terms of profitability on the LOTUS Edge program? When did you expect it to happen? And how should we think about the different P and L
0.1 $1 to $0.02 for 2021, so bottom line net. As we've talked about for a long time, LOTUS has dilutive gross margins to the overall Boston Scientific profile. And we also had, as you've heard today as well relative to R and D and manufacturing, just long term challenges around the manufacturing of the delivery system and a lot of R and D to go with that. So that $0.01 to $0.02 that you see is in 2021. At the bottom line, EPS is a net of all the different elements of what was LOTUS.
I'm not going to give the specific numbers on LOTUS as you go through that, but it was overall a drag on the bottom line for the company.
And Dan, I imagine you're not pulling all the R and D dollars out of the business that were associated with LOTUS. Where are they going to be reallocated and how should we think about the shift in priority here of where those dollars were going to be spent? Thanks.
I think Mike covered that well. Part of it's going to go into complex coronary and focus there. Part of it will go into Neo. And then part will go into the robust pipeline and portfolio and the rest of the company, whether it's MedSurg or PI or neuromod or other areas within the overall pipeline of the company.
So think of it as pull everything out ex R and D, R and D gets reallocated for the most part?
I think that's the goal is to take the R and D that we were spending on LOTUS and put it in other high growth, highly differentiated platforms across the company.
Great. Thanks a lot.
The next question comes from Danielle Antalffy of SVB Leerink. Please go ahead.
Hey, good morning guys. Thanks so much for taking the question. Just a follow-up if I could on Bob's question. And I guess this is less about the portfolio itself, but sort of more about the Boston Scientific brand and the strength of that brand and preventing this from sort of frustrating customers across the brand and the product portfolio in interventional cardiology. Could you talk about that a little bit?
Sure. So we have I'll touch on it first, Joe, then you can. So first of all, across Boston Scientific, there's many divisions and we're talking about interventional cardiology here. So we don't see this having any impact really across our call it our EP customers, our neuro, our pain physicians, our endo customers, our uro customers and so forth. So isolated to interventional cardiology, and Joe can comment further, we don't see a halo impact on our coronary business.
With our complex coronary business, the larger of the 2, we have very unique product platforms. We're really the leader in complex coronary calcium and we have a strong pipeline behind that. So we don't see an issue there. And most customers really are doing RFPs and so forth on product specific or category areas. So we don't see a halo impact on coronary.
And also WATCHMAN is just doing extremely well. WATCHMAN is used by both EP physicians and interventional cardiologists. Those physicians are choosing the best possible product to treat that disease or treat AFib with patients of high risk of stroke. And so we don't really see a concern in terms of a sales negative on either one of those platforms. And I think if anything else, it does allow us that team to really focus in on ACRA and EO2 and put the appropriate R and D investments across that IC portfolio.
But I see that this decision not impacting the other businesses that we compete in given the call point and the focus there of our products.
Dan, I would just add to that, Danielle, that when you look at it, we do run the business as 3 franchises, structural heart valves, coronary therapies and WATCHMAN. And there's probably less crosstalk and less cross contracting When you think about valves into coronary therapies, virtually none. So I think the brand impact on those other franchises will be minimal. And then obviously with our structural heart KOLs, we've got some work to do. We're maintaining that sales force in the U.
S. To sell cerebral protection, Sephora guide wires to run our IDE the United States on Acurate Neo2. And I, for 1, think that this will allow us in Europe to go faster and deeper, focusing that team down on a one dial strategy that being accurate neo2.
Got it. That makes sense. And can I just ask one quick follow-up and I apologize if I missed this? The U. S.
Lotus sales force, are they being redeployed or what's
heart valve sales force in the United States. It will be smaller without a LOTUS marketed product, but we need that to drive our market leadership in the therapy in cerebral protection. And we're going to need that in the future when we go to launch ACURATE neo2 and we need them now because some of them are involved in the IDE from a field clinical support standpoint. And we also will take the opportunity for those that are displaced to move them into growth areas like WATCHMAN and complex PCI calcium management.
Thank you so much.
The next question comes from Larry Biegelsen of Wells Fargo. Please go ahead. Hey guys, thanks for taking
the question. First on NEO-two, when will you guys be able to disclose the U. S. Pivotal trial design or the updated design? And how much of the LOTUS sales in Europe do you think you can capture with NEO2?
And I had one follow-up question.
So we're working with the FDA, Larry, on the final design of the revised design of the U. S. Pivotal trial.
Okay.
Joe, do you
want to Yes.
And Larry, I would say probably not before our Q4 call or our Q1 call somewhere in that timeframe, we should be able to have a definitive answer to that question. Right now, with everything we know, I think there's no reason to move that 2024 date. But if there's an update, it will come probably in Q1 during our Q1 call. On LOTUS sales, it's a good question in Europe. And I think if you look and I won't give away the exact numbers, but when you look at the ratio of LOTUS sales to accurate sales, the vast majority of our sales in Europe are ACURATE or ACURATE NEO2 here in the past few months.
The segments not getting too complex, but there are 2 distinct segments in valves and that's superannular or intraannular. So it's a hard question to answer and I'm not going to try to guess at it in terms of what percentage of the low LOTUS volume we have that we can capture with Neo2.
Thanks, Joe. And just for my follow-up, Dan, I'll take a shot here at a broader question, to see if you can answer. But with the spike in cases, how do you feel about growing sales in Q4 year over year and 2021 consensus numbers? Any reaction kind of minus LOTUS, if you're willing to give anything on this call? Obviously, we'll take it.
If not, I understand. So thanks for taking the question.
Yes. I think broadly speaking, Mike talked about the impact overall to that 6% to 9% mantra that we had, which you could think of as 6% to 8% in a non COVID world 6% to 8% revenue growth. I think relative to Q4, we'll see where the cases and the spikes go. That could make it more challenging to grow in the Q4. We'll have to see how the last part of November December go, but that's probably a fair point there.
And relative to other, 2021 guidance we'll hold that. Assuming the conditions are favorable for it, our goal is to give that on our call in February, Q4 call.
The next question comes from Chris Pasquale of Guggenheim.
Thanks. Can you clarify whether this decision was driven primarily by manufacturing challenges and really your ability to make the delivery system? Or was it pushback from customers who found it too complex to deploy? And just want to understand, is this in any way related to the pin release problem, which drove the issues back in 2017?
Yes. So to answer the second question first, no, it's not related to the PIN release system that led to the recall previously. And to answer the first question, yes, there is a perception that the delivery system is indeed complex because there are moving parts to the valve and delivery system until the valve is actually locked. And this requires physicians to follow a step by step process to allow the valve to be deployed and deployed effectively and safely. This perception means that the valve is seen as more complex.
That required training and significant case oversight. So to overcome that, we have been looking at design enhancements to the delivery system that might simplify the training burden and the case oversight burden. And those enhancements are not forthcoming and thus scaling to more commercially was going to be difficult without a design enhancement that would reduce the burden of training, education and clinical case oversight.
Yes. Chris, I would add to that this is Joe. I would add to that that comprehensively the manufacturing challenges, the clinical support challenges, the repeatability, the scalability, the overall COGS profile, all of those kind of went into this. And when we pull all of that together and then you say, okay, after this voluntary recall, the unknowns on the timing, the complexity and how do we reenter the market, you throw all of that together and that really made the decision clear.
That's helpful. And then can you just speak to the timing of the decision between TCT and the 3Q call? We've spoken a couple of times in the last month. Was there some event that occurred that caused you guys to make this decision now? Thanks.
I can take that, Mike, if you want me to.
Please.
So I think I'll put it in this perspective. So we just rounded the corner right at around TCT of the 1 year anniversary of launching in the U. S. We're going through our annual operating plan process and we're really challenging. We're trying to figure out what's our global number, what's our U.
S. Number. And we're we have done a really good job of both training and retraining around the complexities of the delivery system. But we came to the conclusion that to scale this, to go from sub-one hundred accounts today in the United States to hundreds of accounts, right, we really were going to struggle in replicating that deep technical clinical support as we scale cases and go 2, 3, 4, 5x without a design enhancement. So I think it was the proper thing for us to do to really be our own worst critics after the 1st full year of having LOTUS Edge on the market and commercialized in the U.
S. And it became very apparent that without a design enhancement that our program wasn't scalable and that LOTUS would ultimately remain as a niche device in a pretty expensive space to operate. So let me pull up there, Chris, maybe that was Chris Nattic.
That's great. Thank you.
The next question comes from Joanne Wuensch of Citibank. Please go ahead.
Good morning and thank you for taking the questions. I have 2 quick ones. Gross margins, are you able to share with us what that metric is or was on LOTUS? And do you think in any way this will impact your physician relationships, either for current products or when ACURATE NEO comes to the U. S.
Market? Thank you.
Joanne, I can take the first one. Yes, we're not going to quantify the specifics, but we have said that for years here on LOTUS that the overall gross margin is very dilutive to the overall Boston Scientific margin. And parenthetically, NEO2 is actually kind of at company margins. So that's another good reason for Neo2 in the future.
Yes, I'd say it was significantly dilutive to gross margin, LOTUS. So Joe, you want to touch on the physician relationship question?
Yes. I talked about this answering one of the earlier questions, right. I think it has very minimal impact in our coronary therapies and in our WATCHMAN franchise. We will and we have plans on how to communicate and how to kind of put our arms around the structural heart valve implanters. I think in Europe that really allows them to more focus on the potential of ACURATE neo2.
In the U. S, obviously, this puts a gap in our relationships for actual valve implantation between this decision today and whenever we can get accurate NEO2. But I do like the fact that if you take a look and you say, well, look at our SENTINEL business and our push as the market leader on cerebral protection, the vast majority of those the uses of sentinel actually occur in non LOTUS cases. So I think the ability with our safari Guidewire, with our offense on SENTINOL, I think it really allows us to stay in the game with the TAVR implanting positions. Obviously, I'd like to be there with the valve and all that other stuff, but we'll get there with Neo2 and we'll use those 2 key accessory products as a way to maintain those relationships.
Thank you very much. Andrew, we'll take one final question, please.
Thank you. And that question comes from Vijay Kumar of Evercore ISI. Please go ahead.
Hey, guys. Thanks for taking my question. I guess, 2 related questions, I'll roll them into 1. On the ACVATE near to the 2024 launch timing, is that for high risk or is there perhaps we could see a trial design inclusive of high risk and intermediate risk patients? And the reason I ask is by 2024, your competition will have all the risk classes, perhaps moderate and asymptomatic.
If you come in with a valve with a very niche labeling, how does that impact adoption? And is there a place for Boston to play in this market? Thank you.
Well, perhaps the short answer, Vijay, is that the current U. S. Accurate IDE trial already includes intermediate risk patients. And any redesign that we discussed before we'll announce going forward. But we already have intermediate high and extreme risk patients in that design and we are looking at options to lower risk.
Thanks guys.
All right. With that, we'd like to conclude the call. Thanks for joining us today and we appreciate your interest in Boston Scientific. Andrew, please give all the details for the replay.
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