C.R. Bard
$2.2 Billion
KEY EXECUTIVES:
Timothy M. Ring, Chairman and CEO
John H. Weiland, President and COO
Todd C. Schermerhorn, Sr. VP, CFO
Brian P. Kelly, Group VP
Amy S. Paul, Group VP
John A. DeFord, PhD, Sr. VP – Science, Technology and Clinical Affairs
NO. OF EMPLOYEES:
10,200
GLOBAL HEADQUARTERS:
Murray Hill, NJThe 100th anniversary of C.R. Bard brought with it a most welcome birthday gift: The company achieved a milestone in which it surpassed $2 billion in annual revenues for the first time. Net sales for the company were up 11% to $2.2 billion in 2007, compared with $1.98 billion in 2006. Grateful for being able to build stronger financial growth every year, the company commemorated its centennial by sharing the wealth in a most altruistic way. Employees volunteered to perform 100 “Acts of Kindness” throughout 2007, and they ended up surpassing their original goal by completing nearly 250 acts (eg, food drives, walks to raise money for cancer research, etc.) by the end of the year. It’s only fitting for a company that, once again, met its stated goal of meeting or exceeding its adjusted earnings-per-share growth objective of 14% for its shareholders.
Most of the company’s product groups achieved double-digit sales increases in 2007. The largest contributor was the Urology division, which had net sales of $658.9 million, a 13% increase from $582 million reported for 2006. This division, which added 30% of total net sales for the company in 2007, has had a five-year compound growth rate of 9.4%. The end of the year brought a new launch for this group in the form of infection control endotracheal tubes. Moving forward, the company is focusing heavily on its infection control products, citing the elimination of Medicare reimbursement to hospitals for the treatment of hospital-acquired infections as a strong opportunity for Bard to help customers control costs and improve patient outcomes. Toward the end of 2007, Bard initiated a clinical study of its next-generation Foley catheter and anticipates launching it in 2009.
The next most profitable unit for 2007 was the Oncology business, which added 25% of total sales at $558.5 million, a 16% increase compared with $481.3 million in 2006. This particular division has boasted the largest five-year compound growth rate at 18.6%. In late 2007, Bard launched its PowerPICC Solo catheter, which reduces the need for daily flushing with a saline-heparin solution to prevent clotting and thrombosis. The company’s advanced catheter in specialty venous access technology only needs to be flushed once weekly with saline only. Advancements continue, with the 2008 upgrade of Bard’s proprietary Sherlock catheter tip location system to facilitate use with Bard’s Site-Rite bedside ultrasound guidance system. In terms of acquisitions, Bard purchased the UltraClip breast tissue marker, used in ultrasound-guided breast biopsies, from Inrad, Inc.
The Vascular division, with a healthy five-year compound growth rate of 15.7%, continued to prosper with total net sales of $539.6 million—a 13% increase compared with $479.6 million in the previous year. This business group contributed 24% of the total net sales for Bard. The G2 vena cava filter line was a key growth driver in 2007, and the product recently was cleared by the FDA as a removable filter; later this year, the company expects to follow this up with the clearance and launch of the G2 Express filter. The company also was notably pleased by the 2007 rollout of its HD mesh ablation catheter (and its clinical performance) in Europe and was looking to enter the US market in the future to position Bard as a leader in the diagnosis and treatment of electrophysiology disorders. The more recent launch of the Dorado catheter family also is a strategic move to increase the company’s stance in the standard PTA catheter segment.
Accounting for 17% of all net sales, Bard’s Surgical Specialties business reported flat sales in 2007, with net sales of $363.5 million—2% growth compared with $357.4 million in 2006. However, the five-year compound growth rate for this division has been 9.6%. Notably for 2007, Bard’s Davol subsidiary was granted a license from Genzyme Corp. to market and manufacture its SepraMesh hernia repair product line to its offerings, giving it added ammunition to conquer the estimated $585 million soft tissue hernia repair market. The company also is looking to make inroads in the hernia fixation market with its PermaSorb resorbable fixation device, acquired in mid-2007 from A.M.I. GmbH.
Within all these units, Bard collectively generated $250 million in revenue from business development activities completed within the prior five years.
One of the company’s larger investments in the future was announced in December 2007, when Bard said it would acquire the LifeStent self-expanding, highly flexible, fracture-resistant stent system from Edwards LifeSciences Corp. Bard paid approximately $74 million at closing in January and will pay up to an additional $65 million depending on the achievement of certain milestones (such as regulatory approvals). “The acquisition of the LifeStent product family is a significant strategic addition to our portfolio of non-coronary stent and stent graft products. Pending FDA approval, the Lifestent SFA product, the Flair Arteriovenous Access Stent Graft and E-Luminexx Iliac Stent will together give Bard one of the broadest product offerings for peripheral vascular stenting,” noted Chairman and CEO Timothy Ring at the time of the announcement.
Along with strategic purchases, the company continues to invest in R&D, with $136 million poured into these initiatives (note: this figure includes purchased R&D). Executives reported that 333 patentable ideas were generated, 264 patent applications were filed and 71 patents were issued in 2007.
The investments continue to pay off in 2008, if the company’s first-quarter results are any indication. Net sales were $584 million, an 11% increase from the same period in 2007. The US contribution was $399.2 million (7% growth), while overseas net sales totaled $184.8 million (20% growth). Net income was down, though, at $78,000, compared with $101,600 in the first quarter of 2006. The Vascular and Oncology units posted double-digit gains at 18% and 17%, respectively, and Urology was steady with 9% growth. Surgical Specialties sales were down 4%.
“Despite a challenging quarter in our hernia fixation business, we continue to deliver healthy earnings. These results demonstrate the benefits of a diverse product portfolio and the strength of our vascular, urology and oncology franchises. Our focus remains on sustaining growth through the execution of our R&D and business development strategies,” Ring said.
It appears the company is right on target with meeting this focus, given its March announcement that it would acquire Specialized Health Products International, Inc., a maker of vascular access products, for approximately $68 million.
