Alaris pump clearance
Becton Dickinson touted its long-awaited clearance for its revamped Alaris infusion pump, which has been the “No. 1 priority” for the company, CEO Tom Polen said in a Thursday earnings call.
BD received 510(k) clearance for the device on July 21, allowing the company to start selling its Alaris pumps again after a series of recalls. The modifications include hardware, software and cybersecurity updates.
The company will either upgrade or replace the older devices, starting with its existing customers.
“Given the breadth of our footprint, this effort will happen over a multi-year period,” Polen said.
The Alaris pumps aren’t expected to add much to BD’s 2023 revenue, but are expected to contribute to its 2024 revenue by about 50 basis points, or about $100 million above current sales. J.P. Morgan analyst Robbie Marcus called this a “conservative stance” in a research note on Thursday, estimating the pumps will contribute about $140 million more in sales.
The device is expected to have a bigger impact on BD’s revenue in the longer term. CFO Christopher DelOrefice said that with Alaris’ return to market, “we are increasingly confident in achieving our BD 2025 long-term targets of 5.5%-plus organic revenue growth and double-digit EPS growth.”
Surgical instrumentation sale
BD sold its surgical instrumentation platform to Steris for $540 million. The companies had announced plans for a sale back in June. The divestiture is expected to cause a hit to BD’s earnings per share in 2023, offset by growth in the company’s base business.
BD reported revenue growth in each of its segments except for its life sciences business, which declined because of lower COVID-19 testing sales. The company’s medical segment, its largest by revenue, grew by 11% to $2.4 billion in revenue, driven by its medication management solutions and pharmaceutical systems.
The company’s life sciences business declined by 6.3% year-over-year to $1.2 billion in revenue. BD reported just $8 million in sales from COVID testing, a decline from $76 million last year, DelOrefice said.
BD’s interventional segment, which includes surgery, peripheral intervention, urology and critical care, grew sales by 6.7% to $1.2 billion in the quarter.
BD increased its forecast for 2023 revenues to $19.3 billion, from a prior range of $19.2 billion to $19.3 billion. The company’s expectations for adjusted earnings per share remain unchanged, at a range of $12.10 to $12.32.