07.22.14
$8.05 Billion
KEY EXECUTIVES:
Vincent A. Forlenza, Chairman, President & CEO
Gary M. Cohen, Exec. VP
Christopher R. Reidy, CFO & Exec. VP of Administration
Richard J. Naples, Sr. VP, Regulatory Affairs
William A. Kozy, Exec. VP & Chief Operating Officer
John E. Gallagher, VP & Treasurer
Patti E. Russell, VP & Chief Ethics and Compliance Officer
Jeffrey S. Sherman, Sr. VP & General Counsel
Stephen Sichak Jr., Sr. VP, Integrated Supply Chain
Alexandre Conroy, President, Europe, EMA and the Americas
James Lim, President, Greater Asia
Linda Tharby, Group President
NO. OF EMPLOYEES: 29,979
GLOBAL HEADQUARTERS: Franklin Lakes, N.J.
Charles Darwin would have made for a phenomenal entrepreneur. The English naturalist/geologist not only had the drive, determination and intelligence to succeed, he also conceived a winning business formula, though it originally was intended to explain the process of evolution by natural selection.
Darwin believed that life arose by common descent through a branching pattern of evolution, where species lineages—derived from common ancestral clans—changed over time through natural selection and other mechanisms. Survival, he famously theorized, depends not on strength or intelligence, but rather on adaptability to environmental factors.
Since its 1859 publication, business executives have used Darwin’s evolutionary thesis as the basis of their own survival strategies. “Over the past century, BD’s success depended on our ability to adjust to changes in the healthcare environment and continue to deliver value to our customers,” Becton Dickinson and Company Chairman/President/CEO Vincent A. Forlenza noted in his fiscal 2013 shareholders letter. “In order to remain a relevant healthcare leader and to help our customers address their biggest challenges, we are committed to evolving again.”
BD is ensuring its survival by partnering with customers, governments and other healthcare stakeholders to help solve the industry’s most pressing challenges. The company formed several new alliances in fiscal 2013, including a union with the prestigious Harvard Business School and non-profit consulting firm FSG to establish an executive training curriculum that helps enterprises create new opportunities for growth by focusing specifically on addressing unmet societal needs.
BD also aligned itself with Direct Relief and the National Association of Community Health Centers to expand healthcare services to America’s underserved and vulnerable populations. The company is funding care models for diabetes management and cervical cancer prevention at community clinics throughout the country, and supplying health centers with its insulin syringes to help treat uninsured and under-insured diabetics.
Additionally, BD teamed up with the College of American Pathologists to improve laboratory quality in China and India.
Specifically, the joint effort aims to improve access to external quality assurance/proficiency testing (PT), raise awareness of global practice standards, and help more labs achieve their quality improvement goals. BD has promised to manage PT distribution, including sales, shipping and first-line client service.
Perhaps the most notable collaboration, however, occurred in late September (near the end of BD’s fiscal year) with the World Health Organization agreement to develop and launch the Odon device, a new obstetrical instrument designed to gently maneuver fetuses through the birth canal during complicated second-stage labor. C-sections extensively are performed to address prolonged labor in high-income markets like the United States and Western Europe, but the procedure is far less accessible in developing countries, where most maternal and newborn deaths occur.
“Healthcare is often described as a stable industry, but I do not agree with that assessment,” Forlenza said. “What became abundantly clear to me in the last few years is that no matter where you are in the world, healthcare is under significant pressure and scrutiny. I strongly believe that by partnering with our customers and other industry stakeholders we are more effective in facing the pressure head-on, innovating and evolving to deal with such challenges. I’m confident that despite the challenges and shifts in healthcare, we have positioned ourselves for ongoing success. Throughout BD’s entire history, we have always adapted to meet the needs of our customers and demands of the industry.”
Such adaptability helped BD grow sales 4.5 percent to $8 billion in fiscal 2013 (ended Sept. 30), boost net income 10.5 percent to $1.2 billion and increase its dividend to shareholders for the 41st consecutive year. In addition, gross margin climbed 5.5 percent to $4.1 billion and BD’s cash flow of $1.7 billion absorbed the impact of the 2.3 percent medical device excise tax mandated by the Affordable Care Act.
Emerging markets played a key role in BD’s overall fiscal 2013 growth, as revenues swelled 12 percent on strong performances from India, Latin America, the Middle East and certain Asian markets. China led the pack with a 20 percent year-on-year growth, bolstering Asia Pacific revenues 14 percent to $1 billion compared with FY12. Europe bolstered sales 5.6 percent to $2.5 billion while U.S. proceeds succumbed to weaker demand for women’s health and cancer products. Nevertheless, U.S. sales edged up 2 percent to $3.3 billion.
BD’s three business segments also fortified the firm’s FY13 sales gains, turning in solid performances compared with the previous year. The Medical segment made the largest contribution, growing its bottom line 5.3 percent to $4.3 billion due mostly to emerging market sales and a 3.5 percent revenue hike in safety-engineered products. Across-the-board increases within the segment’s three divisions didn’t hurt either: Medical Surgical Systems sales rose 4.3 percent to $2.1 billion, while Diabetes Care and Pharmaceutical Systems revenue both jumped 6.3 percent to $969 million and $1.1 billion, respectively.
Bigwigs attributed Diabetes Care growth to strong pen needle sales, particularly the BD UltraFine Nano and BD PentaPoint products as well as the AB AutoShield Duo Pen Needle. Pharmaceutical Systems, on the other hand, benefited mostly from the buyout of Safety Syringes Inc., a Carlsbad, Calif., company that develops and markets needle guard products for prefillable syringes (the tube is fitted with a safety that automatically locks into place). Analysts claim the buyout will help the company expand its prefilled syringes business.
In a nod to BD’s Business Darwinism corporate philosophy, the Medical segment secured its evolutionary survival through a handful of U.S. Food and Drug Administration (FDA) clearances and product launches, including the approvals of the BD UltraSafe Plus Passive Needle Guard, an anti-needlestick safety device; and the BD PhaSeal Closed System Transfer Device, a product designed to reduce healthcare workers’ exposure to hazardous, parenteral medications. The segment’s launches were spread throughout the year’s second half, with the UltraSafe Plus Passive Needle Guard hitting the market in April 2013, the Neopak Glass Prefillable Syringe System (specifically engineered to administer biopharmaceuticals) and BD UltraFine Nano 4mm Pen Needle with EasyFlow Technology debuting in June, and the BD Sterifill Advance first appearing in mid-August.
The Diagnostics segment followed a similar growth stratagem, boosting sales through strong performances in both of its divisions as well as higher safety-engineered product proceeds. Popular sales drivers included the BD Vacutainer Push Button Blood Collection Set, the BD Affirm system, the BD Bactec blood culture and TB (tuberculosis) systems, and the BD Phoenex ID/AST platform. The company also profited from a stronger flu season in 2013 and the FDA approvals of its BD Max Cdiff Assay in the United States, the BD ProbeTec Trichomonas Vaginalis Qx Amplified DNA Assay, and the nasopharyngeal wash, aspirate and swab in transport media specimens on the BD Veritor System for the rapid detection of respiratory syncytial virus.
The new device approvals and increased demand for safety-engineered products helped push Diagnostics segment sales to $2.6 billion, a 4.3 percent increase compared with FY12. Preanalytical Systems proceeds rose 3.9 percent to $1.3 billion, and Diagnostic Systems profit jumped 4.6 percent to $1.2 billion.
Biosciences segment sales climbed 2 percent to $1.1 billion, but profit was stymied by unfavorable foreign exchange rates and tepid demand in Western Europe.
“We announced a plan at the start of fiscal 2013 to continue delivering earnings growth through increased revenues and improved operating effectiveness,” Forlenza said in the annual report. “I am happy to report that we achieved our goals.”
Those achievements did not come without sacrifice, however. Ongoing legal drama sent FY13 diluted earnings per share (EPS) tumbling 11.8 percent to $4.67. The culprits included a $22 million pre-tax charge to settle four class-action lawsuits that accused the company of violating federal anti-trust laws in an effort to monopolize the market for hypodermic needles. The suits charged Becton Dickinson with crowding out competitors by offering discounts on a bundle of products in return for exclusivity in its hypodermic needle sales. Plaintiffs also argued that BD improperly gave warrants for company stock to group purchasing organizations, which negotiate prices for hospitals.
The other impediment to EPS growth came from a courtroom defeat in the company’s prolonged patent litigation battle with Little Elm, Texas-based Retractable Technologies Inc. A federal jury awarded Retractable Technologies damages after finding that BD attempted to monopolize the market for safety syringes and falsely advertised about the sharpness of its needles and the amount of waste space for its products. BD recorded a $341 million pre-tax charge in relation to the verdict, but Senior Vice President and General Counsel Jeffrey S. Sherman has vowed to appeal the decision.
KEY EXECUTIVES:
Vincent A. Forlenza, Chairman, President & CEO
Gary M. Cohen, Exec. VP
Christopher R. Reidy, CFO & Exec. VP of Administration
Richard J. Naples, Sr. VP, Regulatory Affairs
William A. Kozy, Exec. VP & Chief Operating Officer
John E. Gallagher, VP & Treasurer
Patti E. Russell, VP & Chief Ethics and Compliance Officer
Jeffrey S. Sherman, Sr. VP & General Counsel
Stephen Sichak Jr., Sr. VP, Integrated Supply Chain
Alexandre Conroy, President, Europe, EMA and the Americas
James Lim, President, Greater Asia
Linda Tharby, Group President
NO. OF EMPLOYEES: 29,979
GLOBAL HEADQUARTERS: Franklin Lakes, N.J.
Charles Darwin would have made for a phenomenal entrepreneur. The English naturalist/geologist not only had the drive, determination and intelligence to succeed, he also conceived a winning business formula, though it originally was intended to explain the process of evolution by natural selection.
Darwin believed that life arose by common descent through a branching pattern of evolution, where species lineages—derived from common ancestral clans—changed over time through natural selection and other mechanisms. Survival, he famously theorized, depends not on strength or intelligence, but rather on adaptability to environmental factors.
Since its 1859 publication, business executives have used Darwin’s evolutionary thesis as the basis of their own survival strategies. “Over the past century, BD’s success depended on our ability to adjust to changes in the healthcare environment and continue to deliver value to our customers,” Becton Dickinson and Company Chairman/President/CEO Vincent A. Forlenza noted in his fiscal 2013 shareholders letter. “In order to remain a relevant healthcare leader and to help our customers address their biggest challenges, we are committed to evolving again.”
BD is ensuring its survival by partnering with customers, governments and other healthcare stakeholders to help solve the industry’s most pressing challenges. The company formed several new alliances in fiscal 2013, including a union with the prestigious Harvard Business School and non-profit consulting firm FSG to establish an executive training curriculum that helps enterprises create new opportunities for growth by focusing specifically on addressing unmet societal needs.
BD also aligned itself with Direct Relief and the National Association of Community Health Centers to expand healthcare services to America’s underserved and vulnerable populations. The company is funding care models for diabetes management and cervical cancer prevention at community clinics throughout the country, and supplying health centers with its insulin syringes to help treat uninsured and under-insured diabetics.
Additionally, BD teamed up with the College of American Pathologists to improve laboratory quality in China and India.
Specifically, the joint effort aims to improve access to external quality assurance/proficiency testing (PT), raise awareness of global practice standards, and help more labs achieve their quality improvement goals. BD has promised to manage PT distribution, including sales, shipping and first-line client service.
Perhaps the most notable collaboration, however, occurred in late September (near the end of BD’s fiscal year) with the World Health Organization agreement to develop and launch the Odon device, a new obstetrical instrument designed to gently maneuver fetuses through the birth canal during complicated second-stage labor. C-sections extensively are performed to address prolonged labor in high-income markets like the United States and Western Europe, but the procedure is far less accessible in developing countries, where most maternal and newborn deaths occur.
“Healthcare is often described as a stable industry, but I do not agree with that assessment,” Forlenza said. “What became abundantly clear to me in the last few years is that no matter where you are in the world, healthcare is under significant pressure and scrutiny. I strongly believe that by partnering with our customers and other industry stakeholders we are more effective in facing the pressure head-on, innovating and evolving to deal with such challenges. I’m confident that despite the challenges and shifts in healthcare, we have positioned ourselves for ongoing success. Throughout BD’s entire history, we have always adapted to meet the needs of our customers and demands of the industry.”
Such adaptability helped BD grow sales 4.5 percent to $8 billion in fiscal 2013 (ended Sept. 30), boost net income 10.5 percent to $1.2 billion and increase its dividend to shareholders for the 41st consecutive year. In addition, gross margin climbed 5.5 percent to $4.1 billion and BD’s cash flow of $1.7 billion absorbed the impact of the 2.3 percent medical device excise tax mandated by the Affordable Care Act.
Emerging markets played a key role in BD’s overall fiscal 2013 growth, as revenues swelled 12 percent on strong performances from India, Latin America, the Middle East and certain Asian markets. China led the pack with a 20 percent year-on-year growth, bolstering Asia Pacific revenues 14 percent to $1 billion compared with FY12. Europe bolstered sales 5.6 percent to $2.5 billion while U.S. proceeds succumbed to weaker demand for women’s health and cancer products. Nevertheless, U.S. sales edged up 2 percent to $3.3 billion.
BD’s three business segments also fortified the firm’s FY13 sales gains, turning in solid performances compared with the previous year. The Medical segment made the largest contribution, growing its bottom line 5.3 percent to $4.3 billion due mostly to emerging market sales and a 3.5 percent revenue hike in safety-engineered products. Across-the-board increases within the segment’s three divisions didn’t hurt either: Medical Surgical Systems sales rose 4.3 percent to $2.1 billion, while Diabetes Care and Pharmaceutical Systems revenue both jumped 6.3 percent to $969 million and $1.1 billion, respectively.
Bigwigs attributed Diabetes Care growth to strong pen needle sales, particularly the BD UltraFine Nano and BD PentaPoint products as well as the AB AutoShield Duo Pen Needle. Pharmaceutical Systems, on the other hand, benefited mostly from the buyout of Safety Syringes Inc., a Carlsbad, Calif., company that develops and markets needle guard products for prefillable syringes (the tube is fitted with a safety that automatically locks into place). Analysts claim the buyout will help the company expand its prefilled syringes business.
In a nod to BD’s Business Darwinism corporate philosophy, the Medical segment secured its evolutionary survival through a handful of U.S. Food and Drug Administration (FDA) clearances and product launches, including the approvals of the BD UltraSafe Plus Passive Needle Guard, an anti-needlestick safety device; and the BD PhaSeal Closed System Transfer Device, a product designed to reduce healthcare workers’ exposure to hazardous, parenteral medications. The segment’s launches were spread throughout the year’s second half, with the UltraSafe Plus Passive Needle Guard hitting the market in April 2013, the Neopak Glass Prefillable Syringe System (specifically engineered to administer biopharmaceuticals) and BD UltraFine Nano 4mm Pen Needle with EasyFlow Technology debuting in June, and the BD Sterifill Advance first appearing in mid-August.
The Diagnostics segment followed a similar growth stratagem, boosting sales through strong performances in both of its divisions as well as higher safety-engineered product proceeds. Popular sales drivers included the BD Vacutainer Push Button Blood Collection Set, the BD Affirm system, the BD Bactec blood culture and TB (tuberculosis) systems, and the BD Phoenex ID/AST platform. The company also profited from a stronger flu season in 2013 and the FDA approvals of its BD Max Cdiff Assay in the United States, the BD ProbeTec Trichomonas Vaginalis Qx Amplified DNA Assay, and the nasopharyngeal wash, aspirate and swab in transport media specimens on the BD Veritor System for the rapid detection of respiratory syncytial virus.
The new device approvals and increased demand for safety-engineered products helped push Diagnostics segment sales to $2.6 billion, a 4.3 percent increase compared with FY12. Preanalytical Systems proceeds rose 3.9 percent to $1.3 billion, and Diagnostic Systems profit jumped 4.6 percent to $1.2 billion.
Biosciences segment sales climbed 2 percent to $1.1 billion, but profit was stymied by unfavorable foreign exchange rates and tepid demand in Western Europe.
“We announced a plan at the start of fiscal 2013 to continue delivering earnings growth through increased revenues and improved operating effectiveness,” Forlenza said in the annual report. “I am happy to report that we achieved our goals.”
Those achievements did not come without sacrifice, however. Ongoing legal drama sent FY13 diluted earnings per share (EPS) tumbling 11.8 percent to $4.67. The culprits included a $22 million pre-tax charge to settle four class-action lawsuits that accused the company of violating federal anti-trust laws in an effort to monopolize the market for hypodermic needles. The suits charged Becton Dickinson with crowding out competitors by offering discounts on a bundle of products in return for exclusivity in its hypodermic needle sales. Plaintiffs also argued that BD improperly gave warrants for company stock to group purchasing organizations, which negotiate prices for hospitals.
The other impediment to EPS growth came from a courtroom defeat in the company’s prolonged patent litigation battle with Little Elm, Texas-based Retractable Technologies Inc. A federal jury awarded Retractable Technologies damages after finding that BD attempted to monopolize the market for safety syringes and falsely advertised about the sharpness of its needles and the amount of waste space for its products. BD recorded a $341 million pre-tax charge in relation to the verdict, but Senior Vice President and General Counsel Jeffrey S. Sherman has vowed to appeal the decision.