Boston Scientific likely to face scrutiny on Axonics deal
Boston Scientific’s proposed $3.7 billion acquisition of medical device maker Axonics Inc. will likely be scrutinized by the US Federal Trade Commission because the companies are the dominant providers of some treatments for urinary incontinence, according to antitrust experts.
The deal announced in January would give Boston Scientific — whose urology business brought in $1.96 billion in 2023 — the two leading treatments for stress urinary incontinence in women, a condition where people accidentally urinate in response to bladder pressure caused by laughing, sneezing, exercising, or other activities.
Boston Scientific, based in Marlborough, already is the top maker of vaginal slings, a thin strip of surgical mesh implanted to provide support for the urethra. Acquiring Axonics, a maker of devices to treat urinary and bowel dysfunction, would give the larger company the most popular alternative treatment — Bulkamid, a urethral bulking hydrogel.
“There’s going to be a concern about Boston Scientific owning the No. 1 mesh and the No. 1 bulking agent,” Bloomberg Intelligence analyst Jennifer Rie said.
Boston Scientific’s portfolio of products includes treatments for kidney stones, prostate cancer, and incontinence. In January, the company said acquiring Axonics’s treatments for overactive bladder and other conditions would complement its own urology business.
The two companies said in a regulatory filing they expect to close the deal in the first half of the year. But if they can’t complete it because of opposition from antitrust regulators, the agreement calls for Boston Scientific to pay Axonics a $140 million termination fee.
Antitrust authorities were notified of the deal on Jan. 30, according to a regulatory filing, but so far the companies haven’t disclosed whether the FTC has expanded its initial review to a more in-depth probe.
Boston Scientific didn’t respond to a request for comment on the deal.
As many as 154 million women worldwide experience stress urinary incontinence, which can be caused by pregnancy, menopause, or weight gain. For women, the two most common procedures involve a vaginal sling or urethral bulking hydrogel, a material injected into the organ’s walls to add volume and support.
Boston Scientific offers the most used vaginal sling though Coloplast A/S, Johnson & Johnson’s Ethicon Inc., and Caldera Medical Inc. offer similar products. Meanwhile, Axonics’s urethral bulking hydrogel, Bulkamid, accounted for about 80 percent of the market in 2022, according to an investor presentation, with Boston Scientific’s Coaptite as the second most-used bulking agent followed by Coloplast’s Durasphere.
Axonics reported $74.4 million in revenue for Bulkamid in its last fiscal year.
Because bulking agents are less invasive and cheaper – the procedure can be performed in a doctor’s office with local anesthesia – they have begun to replace slings in some cases. In the same investor presentation, Axonics estimated that bulking agents accounted for one-third of surgical incontinence treatments for women in the United States in 2022.
Boston Scientific would probably need to divest Axonics’s Bulkamid to relieve the concerns of regulators because it wouldn’t be enough to only unload its own, lessused bulking agent products, Bloomberg’s Rie said.
Last year, Boston Scientific called off plans to acquire a majority stake in South Korea’s M.I.Tech Co. because of opposition from the FTC and other regulators. M.I.Tech offers a metallic stent used in the gastrointestinal system and airways. Boston Scientific also makes several types of gastrointestinal and esophageal stents.