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Inside Becton Dickinson’s Biggest Growth Driver

Sarah Collins

Becton Dickinson: A Force to Be Reckoned With

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Overview

Becton Dickinson and Company (BDX), or BD, has positioned itself to leverage the diversified business segments it operates and to provide end-to-end healthcare solutions to customers. The company has thus been making strategic changes and initiatives including acquisitions, collaborations, and innovative product development.

BD has been increasing its R&D (research and development) expenditure. In 1Q16, the company spent approximately 6.8% of its total revenues on R&D, compared with 6.4% the previous quarter, and it expects to keep increasing its R&D budget through 2016, given the capital that will become available through the suspension of the medical device tax.

Lifesciences segment

The company also plans to expand its BD Max platform menu and launch new assays in its diagnostics business, which is part of its LifeSciences segment. It also has high hopes for its Bruker MALDI Biotyper, an integrated microbiology solution that identifies microorganisms using mass spectrometry, which looks to be a robust and cost-effective device.

Other new product launches include the FACSCelesta flow cytometer, a cell analyzer that was launched in December 2015, which will offer added capabilities and should be able to leverage BD’s reagent portfolio.

Diabetes Care

In 2016, BD’s Diabetes Care segment plans to launch insulin infusion sets, which are being developed in collaboration with Medtronic (MDT) and have been found to reduce blockage resulting from flow interruptions in existing devices.

BD also plans to launch its GenCell Library and UltraTouch push-button blood collection sets. These products are expected to deliver cheap and efficient healthcare and to strengthen the company’s position amid changing business models and intense industry competition.

Abbott Laboratories (ABT) and Stryker (SYK) are also expected to launch breakthrough innovations in 2016. Notably, the First Trust Health Care AlphaDEX Fund (FXH) that tracks the StrataQuant Health Care Index and has around 30% exposure to the medical device industry. BD accounts for ~2.4% of the total holdings of FXH.

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