BD Medical, a unit of Becton, Dickinson and Company (
), recently announced the U.S. launch of its BD Ultra-Fine Nano Pen
Needle with PentaPoint Comfort. This new product will enhance the
portfolio of BD Diabetes Care products under BD Medical.
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The company believes that the launch of the Nano needle with
PentaPoint will promote treatment progression and adherence of
diabetes patients to insulin injections. Given the finding that 47%
of diabetics in the U.S. are likely to improve their insulin
administration if an injection could lessen affliction and
discomfort, Becton's latest offering presents a considerable market
Revenues from BD Medical edged up 5.6% year over year to $4,007.3
million in fiscal 2011, driven by healthy revenues from Diabetes
Care and Pharmaceutical Systems. Within BD Medical, Diabetes Care
sales moved up 3.5% to $866.5 million, helped by global sales of
Sales of new products accounted for 8% of total revenues in fiscal
2011. Given the company's flourishing pipeline and its undertaking
to commercialize innovative products in the near-term, new products
are expected to provide incremental revenues.
Pursuing the studies which suggest that about one-fifth to
one-third of diabetic patients are prone to needle anxiety and tend
to avoid regular insulin injection, Becton designed its Penta
needle tip to reduce the pressure required for skin permeation by
23%. This reflects advancement over existing 3-bevel pen needles.
The Ultra-Fine Nano Pen Needle with PentaPoint are expected to
address the needs of diabetic patients who are reluctant to
administer their injections regularly due to needle anxiety. The
company's newest offering is expected to improve injection
experience for the burgeoning diabetic population in the U.S.
While we derive comfort from Becton's focus on aggressive portfolio
extension, we remain cautious due to lack of any major short-term
catalyst. The rising demand for safety-needle products (with higher
price points and margins) was the primary driver of the company's
past growth, which is not expected to continue, given that the U.S.
market is already largely penetrated.
On the positive side, Becton's preeminent global healthcare
products franchise is partly insulated from volatile macroeconomic
conditions and structural deficiencies elsewhere in the healthcare
delivery field. However, the company faces a wide range of
competitors, including Baxter International (
) in certain niches, in each of its three business segments.
We currently have a long-term "Neutral" recommendation on Becton.
The stock currently retains a Zacks #4 Rank, which translates into
a short-term Sell rating.