Timothy R. Ring, Chairman and CEO
John H. Weiland, President and Chief Operating Officer
Christopher S. Holland, Sr. VP.and Chief Financial Officer
David C. Hemink, President, Bard Access Systems
John P. Groetelaars, President, Davol
Kevin D. Kelly, VP and General Manager, Bard Electrophysiology
Peter R. Curry, Bard Medical
Steven S. Williamson, Bard Peripheral Vascular
Daniel W. LaFever, Bard Japan
NO. OF EMPLOYEES: 12,200
GLOBAL HEADQUARTERS: Murray Hill, N.J.
“Permanence, perseverance and persistence in spite of all obstacles, discouragements and impossibilities: It is this, that in all things, distinguishes the strong soul from the weak.”
— Thomas Carlyle
Finally, a light at the end of the tunnel. It wasn’t the most brilliant glint or even the slightest bit consistent, but its intensity and durability were irrelevant compared to the hope it represented for C.R. Bard Inc. executives last year. For many bigwigs, the light—however dim and discontinuous—symbolized the potential end of a near 40-year descent into the rabbit hole of patent jurisprudence.
“This should be the final curtain of the saga,” a federal judge wrote last winter in deciding to uphold a $371.2 million patent award for the Murray Hill, N.J.-based company. “We cannot revisit the facts anew, nor meander through the record and select facts like our favorite jelly beans, nor characterize the facts as the Bard would in a Shakespearean tragedy.”
C.R. Bard’s modern-day dramaturgy opened in 1974 when it accused fluoropolymer manufacturer W.L. Gore & Associates Inc. of violating its vascular graft technology patent. Gore, of course, denied the allegations, contending its own engineer came up with the material.In 2007, an Arizona jury sided with Bard in the dispute, noting the company first applied for the vascular graft technology patent in 1974. Jurors awarded the firm $185.6 million for lost profit and unpaid royalties but the trial judge later doubled Bard’s total payout.
Not surprisingly, Gore appealed the Arizona jury’s decision but failed to persuade higher courts of its role in creating the fluoropolymer. The U.S. Supreme Court declined to consider the company’s appeal earlier this year, leaving intact the jury’s verdict that with interest, royalties and fees, could amount to nearly $1 billion.
While the final act of their melodrama is still being written (an Arizona trial judge currently is revisiting part of the jury award—$185 million for Gore’s intentional patent infringement and related legal fees), Bard bigwigs are encouraged by the most recent legal rulings, particularly the July 2013 affirmation of its invention by the U.S. Patent and Trademark Office. As they await their final curtain call (which shouldn’t be too far off), executives have begun looking ahead to the special role the jury award will play in the company.
“The potential resolution of the W.L. Gore litigation would provide additional cash that we plan to invest in strategic growth initiatives,” Bard Chairman/CEO Timothy M. Ring and President/Chief Operating Officer John H. Weiland told investors in the company’s 2012 annual report. “These key investment opportunities have been identified, and execution has already started. Our objective with this plan is to improve our core growth rate…”
The plan—which involves expanding into “fast-growing geographies” (a.k.a. emerging markets), increasing research and development investments, and diversifying the company’s product portfolio—improved Bard’s core growth rate in 2012 (year ended Dec. 31). Net sales rose 2 percent to $2.96 billion, net income surged 61.5 percent to $530 million and diluted earnings per share nearly doubled, going from $3.69 in 2011 to $6.16 last year.
International market sales jumped 9 percent in constant currency, with 32 percent growth in emerging markets, including Brazil and China. Bard made considerable inroads in Brazil last year, providing training and clinical support to Faculdade de Medicina da Universidade de São Paulo System nurses using the company’s peripherally-inserted central catheters (PICCs). “Patients have been talking to each other, and they are starting to ask specifically for PICCs,” Luci Ferreira, director of Inpatient Services at the Faculdade System’s Heart Institute, noted in Bard’s annual report. “That gives us extra motivation to learn about PICCs and other access devices.”
Such motivation (and partnership with Bard) likely contributed to the company’s 4 percent growth in Oncology net sales last year. Urology product sales climbed 3 percent to $757.8 million, though only basic drainage devices posted a gain (albeit a minimal 1 percent). Continence product sales fell 8 percent while urological specialty equipment proceeds tumbled 6 percent and catheter stabilization devices slipped 2 percent.
Surgical specialty product revenue swelled 1 percent to $455.1 million. Sealant devices such as topical blood clotting products led growth in this division, with sales soaring 32 percent, according to the annual report. Performance irrigation product proceeds increased 6 percent and sales of soft tissue repair products rose 1 percent.
Vascular products comprised the largest percentage of total net revenue in 2012 (29 percent) but turned in the worst performance. Division sales rose a mere $3 million to $845 million, with only endovascular products sales gaining a lead over its 2011 sum. Electrophysiology and graft device proceeds both fell 6 percent.