CEO: Vincent Forlenza
Based: Franklin Lakes, NJ
2016 sales: $11.4 billion **
2015 sales: $9.2 billion
*Fiscal year ended Sept. 30, 2016
Back in 2014, Becton Dickinson inked a $12 billion deal to acquire CareFusion, securing its entry into the medication management market. And now the devicemaker is set to bolster its presence in the vascular access arena with a $24 billion deal to buy C.R. Bard.
But what has the company been up to between its megadeals?
For starters, it made some key offloads, including that of its ailing Respiratory Solutions business, picked up in the CareFusion deal. In March, it spun the business off in a joint venture with Apax Ventures. While the unit’s sale was expected to yield up to $2 billion, the JV—of which Apax is the majority owner—was ultimately valued at just $500 million.
Becton Dickinson also sold off a pair of CareFusion businesses to “optimize our portfolio,” said CEO Vincent Forlenza on the Q4 2016 earnings call. Stryker picked up CareFusion’s suite of vertebral compression fracture products and Fresenius Kabi bought the BD Rx portfolio, which included the BD Simplest line of prefilled syringe products.
“These actions further enable the organization to prioritize and invest in the most important opportunities for future growth,” Forlenza said.
In September, the company announced it would invest $100 million in its Nebraska plant to boost its insulin syringe manufacturing, which, at the time, exceeded 2 billion insulin syringes a year. And in November, BD rolled out a new dedicated syringe for Eli Lilly’s concentrated insulin, Humulin R U-500. The device is aimed at minimizing dosing errors, which can result from patients and doctors using traditional syringes to deliver Lilly’s concentrated version.
In 2016, Becton Dickinson’s medtech sales grew 24%, on par with the 26% growth it posted in 2015. It was the first full year of CareFusion sales for BD—and it showed. The CareFusion assets are housed in the company’s Medical segment, which posted 34% growth, to $8.7 billion from $6.5 billion. Sales of safety engineered products, self-injection systems and insulin pens also drove Medical segment sales.
More than half of BD’s sales come from the U.S. The company plans to tap emerging markets for growth, particularly in the Middle East and Africa, Forlenza said on the Q4 call. Specifically, it plans to “continue to create new growth opportunities for CareFusion products in these markets,” he said. For 2017, the company expects up to 5% growth in both its Medical segment and its Life Sciences unit, which includes devices for the collection and transportation of diagnostics specimens and other diagnostics tools.
“We've seen significant benefits as a result of [the CareFusion] transaction from a customer, employee, and shareholder standpoint. And we think there's more to come,” Forlenza said on the Q4 call.
** Becton Dickinson’s total medtech sales of $11.379 billion consist of the following segments, per their annual report:
- Medication Management Solutions sales – $2.21 billion
- Medication & Procedural Solutions – $3.413 billion
- Pharmaceutical Systems – $1.199 billion
- Diabetes Care – $1.023 billion
- Preanalytical Systems – $1.409 billion
- Diagnostic Systems – $1.301 billion
- Respiratory Solutions – $824 million