After nearly a century spent building out its portfolio of insulin pens and syringes, BD is finally ready to let its diabetes care business leave the nest.
While reporting financial results for the second fiscal quarter of the year, during which revenues grew more than 15% to $4.9 billion, BD also laid out its plans to spin off its diabetes-focused segment.
The split is expected to be completed in the first half of 2022, after which the segment will become a completely separate, publicly traded company, tentatively dubbed "NewCo."
The independent venture will be based in New Jersey and Massachusetts, with manufacturing sites throughout the U.S., Ireland and China. It will be led by CEO Devdatt Kurdikar, who joined BD in February as president of BD Diabetes Care, and Chief Financial Officer Jacob Elguicze, who joined BD this month and is the former treasurer and head of investor relations for Teleflex.
The new company will aim to build on BD’s established footprint in the diabetes care market, where it reported revenues of nearly $1.1 billion for fiscal year 2020. BD currently produces around 8 billion injection devices each year for 30 million patients, leaving plenty of room for NewCo to expand operations to reach the approximately 463 million people around the world with diabetes.
The company said isolating its diabetes business will give it the space it needs to accumulate the resources and leadership necessary to meet the rising global demand for insulin delivery devices.
“I am fully confident that, as a standalone business, NewCo will have the flexibility to invest in the right areas to become a more nimble, agile and innovative company in the rapidly growing diabetes space,” Kurdikar said in a statement.
BD, meanwhile, will focus on its other core business areas, including its life sciences and interventional divisions, as well as the remainder of BD Medical, its diabetes programs' former home.
Going forward, the company said it hopes to redouble its efforts across three categories: using advanced technology such as artificial intelligence and robotics to improve care; establishing new points of care to enhance the patient experience and save on costs; and increasing investments in the development of diagnostics and treatments for chronic diseases.
“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,” BD CEO Tom Polen said.
“As a standalone public company, we believe NewCo will be better positioned to leverage its leadership position in insulin delivery to advance vital, innovative solutions to the large and growing number of people living with diabetes worldwide,” Polen added.