This article has been updated from a previous version to include remarks made during an earnings call.
NEW YORK (GenomeWeb) – Becton Dickinson reported today that its fiscal second quarter revenues rose 42 percent year over year, reflecting the acquisition of CR Bard. On a comparable, currency-neutral basis, Q2 revenues grew 5 percent, BD said.
For the three months ended March 31, BD posted revenues of $4.22 billion compared to $2.97 billion in the year-ago quarter, beating analysts' average estimate of $4.12 billion.
BD's Medical segment was up 20 percent to $2.17 billion from $1.82 billion a year ago. BD Life Sciences revenues rose 12 percent to $1.10 billion from $982 million in the prior-year quarter. Within the segment, preanalytical systems revenues rose 5 percent to $381 million from $363 million, while diagnostic systems revenues rose 17 percent to $410 million from $350 million, and biosciences revenues increased 14 percent to $307 million from $269 million.
Growth in the US Life Sciences segment was attributed to strength in the diagnostic systems and biosciences units, while revenues in the preanalytical systems unit were negatively impacted by a production issue in one of its product lines that was resolved in the quarter. Life Science growth in the US was also aided by flu-related revenues in the diagnostic systems unit resulting from a strong flu season.
"Our results this quarter mark a significant milestone in our 120-year history, as we welcomed CR Bard to BD," Vincent Forlenza, BD chairman and CEO, said in a statement. BD completed the acquisition of Bard for $24 billion in late 2017 after the two firms divested certain medical device product lines as required by the US Federal Trade Commission.
On a conference call to discuss the earnings, Forlenza noted that BD continues the targeted expansion of its BD Max menu within its life science segment. The firm is "starting to gain traction" with an enteric viral panel launched in Europe at the end of the quarter, Forlenza said, adding that the US Food and Drug Administration clearance of the BD Onclarity HPV assay also further differentiates the firm's women's health offering. The firm also obtained CE marking on an assay to detect carbapenemase-producing organisms (CPOs) in the quarter, and in a slide presented during the call, BD also listed a BD Max tuberculosis assay, BS Synapsys informatics platform, and BD AbSeq assays for protein expression, among planned product launches for FY '18.
BD currently has approximately 30,000 Veritor immunoassay systems placed, said Alberto Mas, the firm's executive vice president and president of the life science segment. Mas noted that the firm is taking shares primarily from the manual testing space with Veritor. "We launched our connected version of Veritor recently as well, which has enabled us to penetrate more on the retail segment," he said, adding that, in terms of broader menu, BD is working on additional assays for the system but that it is too early in the process to provide more detail.
Revenues from the company's US business were up 43 percent to $2.33 billion from $1.63 billion a year ago, while revenues from international markets rose 41 percent to $1.90 billion from $1.34 billion in Q2 2017.
Internationally, revenues outside the US grew about 8 percent on a comparable, currency-neutral basis, the firm said, reflecting strong performance across the Medical, Life Sciences, and Interventional segments.
BD's net loss for the quarter was $12 million, or $0.19 per share, compared to net income of $344 million, or $1.58 per share, a year ago. Adjusted EPS for the recently completed quarter was $2.65, beating the consensus Wall Street estimate of $2.63.
BD's R&D expenses rose 23 percent to $230 million from $187 million for Q2 2017, and its SG&A costs jumped 46 percent to $1.06 billion from $724 million. The costs for products sold also increased, 70 percent year over year to $2.62 billion from $1.54 billion, while costs associated with acquisitions and other restructurings rose 37 percent to $104 million from $76 million.
The company increased its full fiscal year 2018 revenue and adjusted earnings per share guidance. It now expects 31 to 31.5 percent revenue growth compared to a previous estimate of 30 to 31 percent growth. On a comparable, currency-neutral basis, the company raised its revenue guidance to 5. to 5.5 percent growth, which it said is the high end of its previous guidance range.
BD also raised its guidance for fiscal year 2018 earnings per share to be between $10.90 and $11.05, which represents growth of approximately 15 percent to 17 percent, due to an increase in the estimated benefit from foreign currency. On an adjusted basis, EPS is anticipated to be in the range of $10.85 to $11.00.
BD shares were down 3 percent to $223.10 in morning trading on the New York Stock Exchange.