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BD (BDX) Inks New Deal to Strengthen Foothold in STI Space

Becton, Dickinson and Company BDX, commonly known as BD, recently announced an agreement with Italy-based Euroclone for the development and global distribution of molecular assays. The molecular assays are exclusively formulated to detect sexually-transmitted pathogens.

In fact, BD has been a leading player in providing solutions for women's health and sexually transmitted infections (STI).

Notably, the company’s latest development closely follows its recent launch of BD Ultra-Fine micro pen needle 6mm x 32G for use with pen injection devices. The needles offer comfortable injection experience, enhancing customer satisfaction. The device is slated for distribution this month.

Coming back to the news, BD and Euroclone plan to launch these molecular assays outside of the United States from 2018.

The molecular assays leverage on the company’s flagship platform BD MAX System to detect infectious genital mycoplasmas, including Mycoplasma and Ureaplasma species, which are generally unidentifiable by the conventional methods. However, the assays are currently not available for sale in the United States.

Per management, the addition of these assays to the existing BD MAX portfolio along with the company’s other assays like BD SurePath and the BD Onclarity HPV assay is likely fortify the company’s foothold in clinical laboratories for testing STI.

Impressive Stock Performance

Share prices of BD inched up 0.5% to close at $194 following the news release. Over the last year, the company has outperformed the broader industry. While the stock was up 6.9%, the broader industry gained just 5.9%. Nonetheless, the current return is relatively lower than the S&P 500’s addition of 14.5% over the same time frame.

Also, this Zacks Rank #3 (Hold) company’s focus on expanding into overseas markets, in particular, the emerging markets followed by new product launches and its acquisition-driven strategy are its significant growth catalysts.

Our Take

BD has a diversified product portfolio, which reduces the risk of exposure to any one specific product. Additionally, a diverse revenue base and increased adoption of the company’s new and existing products are expected to drive its top-line growth.

Meanwhile, the latest development is likely to maintain the company’s international footprint. Evidently, BD witnessed a 4.7% increase in revenues to $1.433 billion outside the United States on comparable currency-neutral basis in the last quarter.

According to a report by Allied Market Research, the global sexually transmitted diseases testing market is anticipated to reach $167.4 billion by 2021, at a CAGR of 8.5%. Markedly, after considering the huge potential of the market, we believe the latest development to be a strategic fit.

Stocks to Consider

A few better-ranked stocks in the broader medical sector include Edwards Lifesciences Corp. EW, IDEXX Laboratories, Inc. IDXX and Cogentix Medical, Inc. CGNT.

While Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), IDEXX Laboratories and Cogentix Medical hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences delivered an average earnings beat of 10.8% over the last four quarters. The company has a long-term expected earnings growth rate of 15.2%.

IDEXX Laboratories pulled off an average earnings beat of 9.3% over the trailing four quarters. It has a long-term expected earnings growth rate of 19.8%.

Cogentix Medical came up with a positive earnings surprise of 200% in the last quarter. The stock represented a stellar return of 100.9% over the last year.

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IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis Report
 
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