Shares of Boston Scientific Corp. (NYSE: BSX) reached a 10-year high Thursday after the company reported a global restructuring program to cut its annual expenses anywhere from $115 million to $150 million by the end of 2020. The stock climbed 2.28 percent (52 cents) to close at $23.32 Thursday, the highest it has been since Feb 1, 2006 when the stock closed at $24.42.

Few details about the restructuring plan were disclosed, but the Marlborough, Mass.-based company said its overall employee base will remain "relatively unchanged," because of new job creation in growth areas. The plan will include some headcount cuts though and Boston Scientific expects to pay somewhere between $175 million and $225 million in restructuring costs.

Rick Wise, a Stifel analyst, said the plan provides greater assurance that Boston Scientific will reach its operating margin targets. But assuming the company captures $113 million, the midpoint of the projected savings, and reinvests 75 percent of the benefit in various potential growth initiatives, additional margin expansion opportunities and global expansion, Wise estimated roughly $0.01 to $0.02 to EPS annually compared to Stifel's current EPS projects. The company said it does plan to reinvest a "substantial portion" of the savings in growth initiatives.

"We are taking these steps to build on our momentum and meet the challenges of affordable health care around the globe," said CEO Mike Mahoney. "We will continue to invest in strategic growth opportunities that enhance our reach, capabilities and efficiency to sustain our global competitiveness. These initiatives can help us deliver innovative solutions to more patients and enable profitable growth over the long term."

The company said it will initiate several program activities immediately and all activities are expected to be substantially completed by the end of 2018.

A WHOLE NEW BALLGAME

Boston Scientific has been having an exciting year so far, which started in April when the company knocked its first quarter sales out of the park. reporting organic revenue growth of 8 percent (taking out the impact of an acquisition benefit and foreign currency exchange rates). Shares jumped 11.7 percent that day to close at $21.89, higher than it had been since the company closed on its $27.2 billion Guidant acquisition in April 2006, a move that saddled the company with enormous debt. (See Medical Device Daily, April 28, 2006).

Earlier this week, Susie Lisa, Boston Scientific's vice president of investor relations, shed some light on the companies recent growth activity during the Jefferies Healthcare Conference and fielded questions by Raj Denhoy of Jefferies.

"I think we're all still struggling with the 8 percent growth you put up last quarter," Denhoy told Lisa. "I guess medical device companies of your size aren't supposed to grow 8 percent."

Denhoy said one thing that was particularly surprising about Boston Scientific's first quarter results was where that growth came from. Endoscopy, urology and pelvic health all were up about 11 percent and 12 percent, he said, and those are not the typical businesses analysts have traditionally focused on for the company.

Lisa said those results reflect a key strategy of overall portfolio diversification, away from slower growth end markets to faster growth end markets where there is more diffuse competition and less pricing pressure and strong demographics. "And I think endoscopy, urology and pelvic health check the box on all of those," she said.

Demographics are driving growth in those segments, Lisa said, as well as a strong lineup of new technologies.

She pointed to Boston Scientific's Sypglass DS visualization system in endoscopy and the Lithovuew single-use ureteroscope in urology and public health as examples of some of the company's recent home run products.

With the Spyglass, she said, "instead of having to guess where you are in time and space in 2-D fluoroscopy, now you have a digital image in 3-D exactly at the point in the bile duct where you are trying to figure out where your biopsy should be taken from or how to remove stones or what a stricture is."

Similarly, the Lithovue is a visualization system that is helping drive pull through of the entire portfolio, Lisa said. "And I think one thing that we try and remind the Street about is that [in terms of] emerging markets growth ... some of our strongest growing divisions have been endoscopy and urology."

Those are the markets where there is still an ongoing conversation about the standard of care from open surgical procedures, she said, adding that 1 million bile duct stones procedures are done as open surgery in China each year while they are done as minimally invasive endoscopic procedures anywhere else.