07.20.22
Rank: #5 (Last year: #6)
$20.25 Billion
Prior Fiscal: $17.12 Billion
Percentage Change: +18.3%
R&D Expenditure: $1.34B
Best FY21 Quarter: Q1 $5.32B
Latest Quarter: Q2 $5.01B
No. of Employees: 75,000
Global Headquarters: Franklin Lakes, N.J.
KEY EXECUTIVES:
Tom Polen, Chairman, CEO, and President
Christopher DelOrefice, Exec. VP and CFO
Simon D. Campion, Exec. VP and President, Interventional Segment
Dave Hickey, Exec. VP and President, Life Sciences
Alberto Mas, Exec. VP and President, Medical Segment
James Lim, Exec. VP and President, Greater Asia
Roland Goette, Exec. VP and President, EMEA
What one company views as a high growth segment for their business, another sees as an expendable piece that can be divested or spun out to stand on its own. Neither company has an incorrect view of the division; rather, it’s a matter of focusing on core competencies. One company may see a unit as complementary while another views that same clinical focus as something just outside their true scope.
In May 2021, BD announced it thought it best to separate from its Diabetes Care business to allow the firm to “focus on innovation and priority growth markets.” Embecta Corp. (what would be announced as the new company’s name) has roots within diabetes care going back to 1924 when it introduced the world’s first specialized insulin syringe. According to BD, it is now responsible for producing approximately 8 billion devices annually and serves about 30 million patients; these figures put it near the top among companies providing technology for diabetes care.
In 2021, it was reported the unit took in revenues of $1.16 billion, originating almost 50/50 from U.S. customers versus international. According to the International Diabetes Foundation, in 2020, the estimated diabetic population was 463 million and that figure is anticipated to grow to 700 million by 2045.
“The decision to spinoff our Diabetes Care business is part of our active portfolio management and consistent with our BD 2025 strategy to Grow, Simplify and Empower,” said Tom Polen, chairman, CEO, and president of BD. “The spinoff will allow BD to strengthen its growth profile, enables a greater investment focus on our other core businesses and high-growth opportunities, and makes a greater impact for our customers and patients.”
At the time of the split announcement, the leadership team for Embecta was also introduced. Serving as president and CEO would be Devdatt Kurdikar. Kurdikar had been the worldwide president of BD Diabetes Care. He previously served as president and CEO of Cardiac Science before the company was sold to Zoll Medical, and also held positions at Boston Scientific and Baxter.
Coming from Teleflex where he served as former treasurer and head of investor relations, Jacob Elguicze was announced as a new hire and would become Embecta’s CFO. Elguicze began at accounting firm Coopers Lybrand before joining Motorola and, eventually, Teleflex.
ANALYST INSIGHTS: After successfully spinning off its diabetes business unit (named Embecta) in the first half of 2022, it was known that BD had cash for M&A to support its “BD 2025 Strategy.” They quickly flexed that muscle with a recent announcement to acquire Parata Systems, an innovative provider of pharmacy automation solutions, for $1.525 billion. Expect BD to continue to invest in Smart and Connected Care solutions to enhance its growth opportunities.
BD’s Board of Directors approved the transaction in February 2022 for an April 1 spinoff date, establishing one of the largest “pure-play” diabetes technologies firms in the world. “The completion of this spinoff is a significant achievement for both BD and embecta,” Polen said on the date of the spinoff’s completion. “While BD is proud of its heritage in the diabetes care category, we are just as excited to see our legacy advanced by Embecta as a newly independent, publicly-traded corporation.”
The Diabetes Care segment and its $1.16 billion revenue contribution leaves behind its former home within BD’s Medical Segment, which accounted for the largest portion of BD’s $20.25 billion 2021 fiscal revenue figure ($9.48 billion; a 9.2% gain year over year). Within this group, Medication Delivery Solutions notched the largest contribution at $4.06 billion, a 14% gain over 2020. The growth was attributed to strong demand for core offerings, including U.S. demand for catheters and vascular care products, as well as increased global demand for syringes resulting from COVID-19 vaccination efforts.
The Medication Management Solutions unit, on the other hand, decreased almost 1% compared to 2020. Its $2.43 billion in revenue reflected a loss due primarily to a decline in healthcare utilization, particularly in the United States, China, and Europe, according to BD.
The remaining segment of the division—Pharmaceutical Systems—ballooned by 15.2% to finish the fiscal at $1.83 billion. These gains were attributed to continued growing demand for pre-filled devices.
According to BD, demand for pre-filled devices is being aided by the vial to pre-filled device conversion for biologics, vaccines, and other injectable drugs. As such, in December 2020, the firm announced it was investing $1.2 billion in its manufacturing capacity for these technologies over a four-year period. The investment will impact six manufacturing locations and also add a new facility in Zaragoza, Spain. The new location is expected to be operational by the end of 2023 and will create approximately 600 jobs by 2030. The financial investment will also be put toward new product innovation, manufacturing technology enhancements, and business continuity improvements.
Further seeking to keep this division strong within the medical device space, the company announced it had submitted a 510(k) application for its BD Alaris System, a widely used infusion pump for acute care hospitals in the U.S. The regulatory submission was initiated to bring the technology “up to date, implement updated features, and address open recall issues, including through a new version of BD Alaris System software that will provide clinical, operational, and cybersecurity updates,” according to the firm’s news release from April 2021. The recall issues harken back to concerns that were brought to light during the prior year.
While Medication Delivery Solutions was the largest revenue-generating unit within the Medical Segment, the Life Sciences Segment was home to BD’s largest contributor. Integrated Diagnostic Solutions exploded by almost 48% in fiscal 2021 to close at $5.23 billion. Even Life Sciences sister division—Biosciences—enjoyed double digit gains (14.2%) to post $1.31 billion in revenue. While both saw a return of sales after pandemic-related declines in fiscal 2020, the enormous increases seen for the diagnostic unit were attributed primarily to COVID-19 testing solutions. Similarly, many of the company’s product announcements were related to this same area.
Soon after the start of the 2021 fiscal period, BD announced (alongside CerTest Biotec) a CE mark had been gained for the VIASURE SARS-CoV-2 (N1 + N2) Real Time PCR Detection Kit adapted for the BD MAX System. The kit enables users to run a single module that tests concurrently for COVID-19, influenza (flu), and Respiratory Syncytial Virus (RSV).
In February, BD gained an FDA EUA (emergency use authorization) and CE mark for a combination molecular diagnostic to detect SARS-CoV-2, as well as influenza A+B in a single test. The EUA included updated information for the test to be used in detection of both U.K. and South African variants. Like the VIASURE test, this diagnostic is run on the company’s MAX system.
Just a month later, the organization gained another EUA for a similar test (detection of SARS-CoV-2, influenza A, and influenza B) in the form of a rapid antigen test that provided results in 15 minutes. This test was developed to run on the Veritor Plus System and provided definitive positive or negative individual digital display readouts for all three diseases.
Yet again, the firm gained an EUA for a COVID-related testing solution; this time for its rapid antigen test to be used for screening through serial testing (i.e., at least twice a week) of asymptomatic individuals. The Veritor Plus System supports this approach in everyday locations such as schools and businesses, along with serial testing in other situations, such as athletes and teams to ensure safe games and competitions.
In April 2021, CerTest and BD once again announced news regarding their collaborative development efforts. Saliva specimens were added to the CE mark the firms gained for testing with the VIASURE SARS-CoV-2 Kit on the MAX System. This marked the third type of specimen that could be run using these technologies (nasopharyngeal and oropharyngeal samples were the first two types).
In other efforts, BD teamed with organizations to leverage a digital health aspect alongside their testing solutions. In one such agreement, BD sought to pair an at-home lateral flow antigen test for the detection of SARS-CoV-2 with Scanwell Health’s (a provider of smartphone-enabled at-home medical tests) mobile app. The app provides step-by-step instructions on how to collect and transfer a nasal swab sample and use the mobile device’s camera to analyze and interpret results. The test result is displayed onscreen, and there were plans to develop functionality to assist in automated reporting to public health agencies. The at-home test gained an FDA EUA in late August 2021, and in December 2021 (FY2022), it was announced BD had completed the acquisition of Scanwell Health.
In a separate arrangement, ImageMover (a software platform that automates and simplifies medical data collection and management) was used by BD to create a companion mobile app that enabled more streamlined reporting of SARS-CoV-2 antigen testing results performed on its Veritor Plus System at everyday testing locations, such as schools and businesses. The ImageMover app empowered organizations performing point-of-care testing to efficiently capture required demographic details of those being tested, upload COVID-19 test results, report results to appropriate stakeholders, and automate reporting to federal and state agencies.
While the COVID testing solutions were the most prominent announcements regarding diagnostic solutions during the 2021 fiscal year, BD did provide news on a number of other testing-related products. A 510(k) clearance was granted for its FACSLyric Flow Cytometer with newly integrated FACSDuet Sample Preparation System. The technology enables clinical laboratories to fully automate the sample-to-answer process and improve their efficiency by reducing errors and limiting the manual user interactions required to run assays on the cytometer.
The firm also declared it obtained CE mark status for the self-collection of samples for HPV screening. This claim permitted laboratories and facilities to process self-collected samples via a BD diluent tube using the Onclarity HPV Assay on either the Viper LT or COR System. According to BD, adding at-home collection as an option to cervical cancer screening programs has been demonstrated to increase participation.
BD also announced the U.S. launch of a Urine Culture Application for use with its Kiestra lab automation incubation and imaging system. Designed using artificial intelligence and leveraging the quality of the firm’s BBL plated media, the application uses digital imaging and software algorithms to determine the amount of growth on a urine culture plate from clean caught and catheterized samples.
The BD FACSymphony A1 Cell Analyzer is a fluorescence-activated cell analyzer that offers advanced research capabilities in a compact design, which helps improve access to instrumentation for complex scientific research to more labs. The unit from the Biosciences division was launched in August 2021. Fluorescence-activated cell sorter technology enables the precise isolation of selected single cells from complex samples.
Within the same month, the company launched a fully automated, high-throughput diagnostic system using robotics and sample management software algorithms. The COR PX/GX System integrates and automates the complete molecular laboratory workflow from sample processing to diagnostic test result. The system is modular and scalable, and designed to address multiple needs within laboratories for expanding molecular testing and increasing test volumes. It gained a CE mark in 2019.
BD’s third segment—Interventional—also enjoyed auspicious gains due primarily to the return of more elective surgical procedures as the delays faced in 2020 began to subside. Its $4.24 billion contribution as a total segment represented a 12.7% increase over the prior fiscal. More specifically, each of the three units within the segment saw favorable growth. Surgery presented a final figure of $1.30 billion in revenue, representing a 15.7% rise. Next, Peripheral Intervention celebrated a 13.2% elevation to reach $1.71 billion for the fiscal. Finally, Urology and Critical Care enjoyed a high single-digit percentage gain in FY2021 to finish the 12-month period at $1.23 billion, a 9% expansion.
The segment made a couple of product declarations during the timeframe. One was the 510(k) clearance of its Pristine Long-Term Hemodialysis Catheter, which was developed with a unique side-hole-free symmetric Y-Tip distal lumen design. As a result, it can help minimize thrombus adhesion that can be associated with side-hole catheters and help facilitate blood clot aspiration prior to hemodialysis treatment.
The BD Surgiphor sterile wound irrigation system delivers simplified sterility and helps hospitals comply with national and international guidelines. According to the company, it is the first and only (at the time) ready-to-use aqueous povidone-iodine irrigation solution that mechanically loosens and removes wound debris. The product came to BD as part of its acquisition of Orthophor in November 2020.
BD announced several other acquisitions during its 2021 fiscal period. Also in November 2020, it purchased the Medical Business assets of CUBEX LLC, a privately-held company that developed cloud-based software offerings for advanced medication management. The deal expanded BD’s medication management offerings into the care continuum space and provided deeper integration with electronic health records.
In March 2021, the organization further expanded its medication management capabilities in a transaction for GSL Solutions Inc. A privately-held company, GSL developed smart medication devices for the storage and tracking of controlled substances and patient-specific medications that improve the security, efficiency, and compliance of medication storage. In addition, it provided analytic capabilities to further improve inventory management, including of controlled substances, regulatory compliance, and patient safety.
July 2021 saw the inclusion of Tepha Inc., a developer and manufacturer of a proprietary resorbable polymer technology. The technology platform provides additional innovation potential that can accelerate the growth of BD’s surgical mesh portfolio and drives the company into potential new areas within soft tissue repair, reconstruction, and regeneration.
$20.25 Billion
Prior Fiscal: $17.12 Billion
Percentage Change: +18.3%
R&D Expenditure: $1.34B
Best FY21 Quarter: Q1 $5.32B
Latest Quarter: Q2 $5.01B
No. of Employees: 75,000
Global Headquarters: Franklin Lakes, N.J.
KEY EXECUTIVES:
Tom Polen, Chairman, CEO, and President
Christopher DelOrefice, Exec. VP and CFO
Simon D. Campion, Exec. VP and President, Interventional Segment
Dave Hickey, Exec. VP and President, Life Sciences
Alberto Mas, Exec. VP and President, Medical Segment
James Lim, Exec. VP and President, Greater Asia
Roland Goette, Exec. VP and President, EMEA
What one company views as a high growth segment for their business, another sees as an expendable piece that can be divested or spun out to stand on its own. Neither company has an incorrect view of the division; rather, it’s a matter of focusing on core competencies. One company may see a unit as complementary while another views that same clinical focus as something just outside their true scope.
In May 2021, BD announced it thought it best to separate from its Diabetes Care business to allow the firm to “focus on innovation and priority growth markets.” Embecta Corp. (what would be announced as the new company’s name) has roots within diabetes care going back to 1924 when it introduced the world’s first specialized insulin syringe. According to BD, it is now responsible for producing approximately 8 billion devices annually and serves about 30 million patients; these figures put it near the top among companies providing technology for diabetes care.
In 2021, it was reported the unit took in revenues of $1.16 billion, originating almost 50/50 from U.S. customers versus international. According to the International Diabetes Foundation, in 2020, the estimated diabetic population was 463 million and that figure is anticipated to grow to 700 million by 2045.
“The decision to spinoff our Diabetes Care business is part of our active portfolio management and consistent with our BD 2025 strategy to Grow, Simplify and Empower,” said Tom Polen, chairman, CEO, and president of BD. “The spinoff will allow BD to strengthen its growth profile, enables a greater investment focus on our other core businesses and high-growth opportunities, and makes a greater impact for our customers and patients.”
At the time of the split announcement, the leadership team for Embecta was also introduced. Serving as president and CEO would be Devdatt Kurdikar. Kurdikar had been the worldwide president of BD Diabetes Care. He previously served as president and CEO of Cardiac Science before the company was sold to Zoll Medical, and also held positions at Boston Scientific and Baxter.
Coming from Teleflex where he served as former treasurer and head of investor relations, Jacob Elguicze was announced as a new hire and would become Embecta’s CFO. Elguicze began at accounting firm Coopers Lybrand before joining Motorola and, eventually, Teleflex.
ANALYST INSIGHTS: After successfully spinning off its diabetes business unit (named Embecta) in the first half of 2022, it was known that BD had cash for M&A to support its “BD 2025 Strategy.” They quickly flexed that muscle with a recent announcement to acquire Parata Systems, an innovative provider of pharmacy automation solutions, for $1.525 billion. Expect BD to continue to invest in Smart and Connected Care solutions to enhance its growth opportunities.
—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors
BD’s Board of Directors approved the transaction in February 2022 for an April 1 spinoff date, establishing one of the largest “pure-play” diabetes technologies firms in the world. “The completion of this spinoff is a significant achievement for both BD and embecta,” Polen said on the date of the spinoff’s completion. “While BD is proud of its heritage in the diabetes care category, we are just as excited to see our legacy advanced by Embecta as a newly independent, publicly-traded corporation.”
The Diabetes Care segment and its $1.16 billion revenue contribution leaves behind its former home within BD’s Medical Segment, which accounted for the largest portion of BD’s $20.25 billion 2021 fiscal revenue figure ($9.48 billion; a 9.2% gain year over year). Within this group, Medication Delivery Solutions notched the largest contribution at $4.06 billion, a 14% gain over 2020. The growth was attributed to strong demand for core offerings, including U.S. demand for catheters and vascular care products, as well as increased global demand for syringes resulting from COVID-19 vaccination efforts.
The Medication Management Solutions unit, on the other hand, decreased almost 1% compared to 2020. Its $2.43 billion in revenue reflected a loss due primarily to a decline in healthcare utilization, particularly in the United States, China, and Europe, according to BD.
The remaining segment of the division—Pharmaceutical Systems—ballooned by 15.2% to finish the fiscal at $1.83 billion. These gains were attributed to continued growing demand for pre-filled devices.
According to BD, demand for pre-filled devices is being aided by the vial to pre-filled device conversion for biologics, vaccines, and other injectable drugs. As such, in December 2020, the firm announced it was investing $1.2 billion in its manufacturing capacity for these technologies over a four-year period. The investment will impact six manufacturing locations and also add a new facility in Zaragoza, Spain. The new location is expected to be operational by the end of 2023 and will create approximately 600 jobs by 2030. The financial investment will also be put toward new product innovation, manufacturing technology enhancements, and business continuity improvements.
Further seeking to keep this division strong within the medical device space, the company announced it had submitted a 510(k) application for its BD Alaris System, a widely used infusion pump for acute care hospitals in the U.S. The regulatory submission was initiated to bring the technology “up to date, implement updated features, and address open recall issues, including through a new version of BD Alaris System software that will provide clinical, operational, and cybersecurity updates,” according to the firm’s news release from April 2021. The recall issues harken back to concerns that were brought to light during the prior year.
While Medication Delivery Solutions was the largest revenue-generating unit within the Medical Segment, the Life Sciences Segment was home to BD’s largest contributor. Integrated Diagnostic Solutions exploded by almost 48% in fiscal 2021 to close at $5.23 billion. Even Life Sciences sister division—Biosciences—enjoyed double digit gains (14.2%) to post $1.31 billion in revenue. While both saw a return of sales after pandemic-related declines in fiscal 2020, the enormous increases seen for the diagnostic unit were attributed primarily to COVID-19 testing solutions. Similarly, many of the company’s product announcements were related to this same area.
Soon after the start of the 2021 fiscal period, BD announced (alongside CerTest Biotec) a CE mark had been gained for the VIASURE SARS-CoV-2 (N1 + N2) Real Time PCR Detection Kit adapted for the BD MAX System. The kit enables users to run a single module that tests concurrently for COVID-19, influenza (flu), and Respiratory Syncytial Virus (RSV).
In February, BD gained an FDA EUA (emergency use authorization) and CE mark for a combination molecular diagnostic to detect SARS-CoV-2, as well as influenza A+B in a single test. The EUA included updated information for the test to be used in detection of both U.K. and South African variants. Like the VIASURE test, this diagnostic is run on the company’s MAX system.
Just a month later, the organization gained another EUA for a similar test (detection of SARS-CoV-2, influenza A, and influenza B) in the form of a rapid antigen test that provided results in 15 minutes. This test was developed to run on the Veritor Plus System and provided definitive positive or negative individual digital display readouts for all three diseases.
Yet again, the firm gained an EUA for a COVID-related testing solution; this time for its rapid antigen test to be used for screening through serial testing (i.e., at least twice a week) of asymptomatic individuals. The Veritor Plus System supports this approach in everyday locations such as schools and businesses, along with serial testing in other situations, such as athletes and teams to ensure safe games and competitions.
In April 2021, CerTest and BD once again announced news regarding their collaborative development efforts. Saliva specimens were added to the CE mark the firms gained for testing with the VIASURE SARS-CoV-2 Kit on the MAX System. This marked the third type of specimen that could be run using these technologies (nasopharyngeal and oropharyngeal samples were the first two types).
In other efforts, BD teamed with organizations to leverage a digital health aspect alongside their testing solutions. In one such agreement, BD sought to pair an at-home lateral flow antigen test for the detection of SARS-CoV-2 with Scanwell Health’s (a provider of smartphone-enabled at-home medical tests) mobile app. The app provides step-by-step instructions on how to collect and transfer a nasal swab sample and use the mobile device’s camera to analyze and interpret results. The test result is displayed onscreen, and there were plans to develop functionality to assist in automated reporting to public health agencies. The at-home test gained an FDA EUA in late August 2021, and in December 2021 (FY2022), it was announced BD had completed the acquisition of Scanwell Health.
In a separate arrangement, ImageMover (a software platform that automates and simplifies medical data collection and management) was used by BD to create a companion mobile app that enabled more streamlined reporting of SARS-CoV-2 antigen testing results performed on its Veritor Plus System at everyday testing locations, such as schools and businesses. The ImageMover app empowered organizations performing point-of-care testing to efficiently capture required demographic details of those being tested, upload COVID-19 test results, report results to appropriate stakeholders, and automate reporting to federal and state agencies.
While the COVID testing solutions were the most prominent announcements regarding diagnostic solutions during the 2021 fiscal year, BD did provide news on a number of other testing-related products. A 510(k) clearance was granted for its FACSLyric Flow Cytometer with newly integrated FACSDuet Sample Preparation System. The technology enables clinical laboratories to fully automate the sample-to-answer process and improve their efficiency by reducing errors and limiting the manual user interactions required to run assays on the cytometer.
The firm also declared it obtained CE mark status for the self-collection of samples for HPV screening. This claim permitted laboratories and facilities to process self-collected samples via a BD diluent tube using the Onclarity HPV Assay on either the Viper LT or COR System. According to BD, adding at-home collection as an option to cervical cancer screening programs has been demonstrated to increase participation.
BD also announced the U.S. launch of a Urine Culture Application for use with its Kiestra lab automation incubation and imaging system. Designed using artificial intelligence and leveraging the quality of the firm’s BBL plated media, the application uses digital imaging and software algorithms to determine the amount of growth on a urine culture plate from clean caught and catheterized samples.
The BD FACSymphony A1 Cell Analyzer is a fluorescence-activated cell analyzer that offers advanced research capabilities in a compact design, which helps improve access to instrumentation for complex scientific research to more labs. The unit from the Biosciences division was launched in August 2021. Fluorescence-activated cell sorter technology enables the precise isolation of selected single cells from complex samples.
Within the same month, the company launched a fully automated, high-throughput diagnostic system using robotics and sample management software algorithms. The COR PX/GX System integrates and automates the complete molecular laboratory workflow from sample processing to diagnostic test result. The system is modular and scalable, and designed to address multiple needs within laboratories for expanding molecular testing and increasing test volumes. It gained a CE mark in 2019.
BD’s third segment—Interventional—also enjoyed auspicious gains due primarily to the return of more elective surgical procedures as the delays faced in 2020 began to subside. Its $4.24 billion contribution as a total segment represented a 12.7% increase over the prior fiscal. More specifically, each of the three units within the segment saw favorable growth. Surgery presented a final figure of $1.30 billion in revenue, representing a 15.7% rise. Next, Peripheral Intervention celebrated a 13.2% elevation to reach $1.71 billion for the fiscal. Finally, Urology and Critical Care enjoyed a high single-digit percentage gain in FY2021 to finish the 12-month period at $1.23 billion, a 9% expansion.
The segment made a couple of product declarations during the timeframe. One was the 510(k) clearance of its Pristine Long-Term Hemodialysis Catheter, which was developed with a unique side-hole-free symmetric Y-Tip distal lumen design. As a result, it can help minimize thrombus adhesion that can be associated with side-hole catheters and help facilitate blood clot aspiration prior to hemodialysis treatment.
The BD Surgiphor sterile wound irrigation system delivers simplified sterility and helps hospitals comply with national and international guidelines. According to the company, it is the first and only (at the time) ready-to-use aqueous povidone-iodine irrigation solution that mechanically loosens and removes wound debris. The product came to BD as part of its acquisition of Orthophor in November 2020.
BD announced several other acquisitions during its 2021 fiscal period. Also in November 2020, it purchased the Medical Business assets of CUBEX LLC, a privately-held company that developed cloud-based software offerings for advanced medication management. The deal expanded BD’s medication management offerings into the care continuum space and provided deeper integration with electronic health records.
In March 2021, the organization further expanded its medication management capabilities in a transaction for GSL Solutions Inc. A privately-held company, GSL developed smart medication devices for the storage and tracking of controlled substances and patient-specific medications that improve the security, efficiency, and compliance of medication storage. In addition, it provided analytic capabilities to further improve inventory management, including of controlled substances, regulatory compliance, and patient safety.
July 2021 saw the inclusion of Tepha Inc., a developer and manufacturer of a proprietary resorbable polymer technology. The technology platform provides additional innovation potential that can accelerate the growth of BD’s surgical mesh portfolio and drives the company into potential new areas within soft tissue repair, reconstruction, and regeneration.