Blackstone Funds Can Cover Up To $455 Million Of Boston Scientific's Heart-Pump Development Costs
The payback to Blackstone is capped at 2.5 times what it funds, plus royalties, and nothing has been booked yet.
Boston Scientific, the medical device maker, signed a deal that lets Blackstone-managed funds pay up to $455 million of the development costs of its VITALYST heart-pump system, according to its quarterly report filed Monday. In return, Blackstone can collect fixed milestone payments of up to 2.5 times what it actually funds, plus royalties on sales.
How the Blackstone deal works
The agreement was signed October 2, 2026, after the quarter closed. It covers VITALYST, a temporary circulatory-support system for patients with acute myocardial infarction with cardiogenic shock, and the funding runs from signing through U.S. regulatory approval, based on qualifying development costs.
Because the filing says risk transfers genuinely to Blackstone, the money will be booked as a reduction to research and development expense as costs are incurred. As of September 30, no amounts had been recognized.
Blackstone's payoff depends on U.S. approval. If the device wins it, Blackstone becomes eligible for regulatory and commercial milestone payments, the commercial one tied to a cumulative net sales target, along with royalties. In certain termination circumstances Boston Scientific could owe continuing payments or a multiple of the amount funded, which it considers remote.
What it does to reported R&D
Research and development expense was $520 million in the third quarter, against $514 million a year earlier. For the first nine months it was $1,589 million, up from $1,483 million. Blackstone funding would offset those costs, while the milestone payments would not run through R&D.
The prior quarterly filing carried no such arrangement, since the deal came after that report.
A rough quarter around the deal
Boston Scientific makes medical devices sold mainly to hospitals and physicians. A cybersecurity incident identified in August disrupted manufacturing and order shipping and, the filing says, materially hit third-quarter results. Net sales rose 1.5% to $5,138 million, while net income attributable to common holders fell to $582 million from $755 million.
In its October 28 earnings release the company guided fourth-quarter net sales down 3.0% to 1.0%, with adjusted earnings of $0.77 to $0.79 a share. A restructuring plan approved July 21 targets about $500 million in annual gross pre-tax savings.
The company held $609 million in cash at September 30. The $14.5 billion Penumbra acquisition, which received an FTC request for more information in March, is now expected to complete in early 2027. The earlier quarterly filing expected completion in the second half of 2026. Market value was $60.8 billion as of Monday's report.
The first Blackstone offset to R&D expense would appear in a future quarterly report, and the Penumbra review continues with completion targeted for early 2027.
Sources
- 10-Q Filing — Boston Scientific (BSX) — SEC EDGAR
- 10-Q Filing — Boston Scientific (BSX), Q2 FY2026 filed 2026-08-03 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, earningsrelease_live.htm) — Boston Scientific, filed 2026-10-28 — SEC EDGAR
- Boston Scientific Corp (BSX) (Q3 2026) Earnings Call Highlights: Cyber Incident Slashes Growth ... — Yahoo Finance
- Boston Scientific (BSX) Could Be 27% Below Fair Value After Earnings Guidance Cut — Yahoo Finance
- BSX Q3 Earnings Call Flags Growth Challenges Through 2027 — Yahoo Finance
- Boston Scientific Faces Tough Challenges Ahead: 2027 Profit Projections Drop Amid Pricing Pressure, ETHealthworld — health.economictimes.indiatimes.com
- BSX Stock Looks To Snap 3-Week Winning Streak: Analysts Downgrade Boston Scientific As Cyberattack And Slowing Growth Cloud Outlook — Yahoo Finance
