BD Diagnostics, a unit of
Becton, Dickinson and Company
), recently announced that it has received the green signal from
the U.S. Food and Drug Administration (FDA) for nasopharyngeal
wash, aspirate and swab in transport media specimens on the BD
Veritor System for Rapid Detection of Flu A+B.
Becton's latest offering for Rapid Detection of Flu A+B will be
marketed as a laboratory kit to test fluid specimens procured from
nasopharyngeal wash, aspirate or swab in transport media. BD
Veritor System omits the subjective result interpretation by
offering easily observable, digitized objective results. It is the
only FDA approved diagnostic flu test against the high-sensitivity
The FDA approval marks another addition to the company's
diagnostic systems offerings. BD Diagnostics recorded revenues of
$642 million (32% of total revenues), up 1.7% year over year, in
the third quarter of fiscal 2012. Under BD Diagnostics, diagnostic
systems sales were up 2.6% to $308.8 million. However, the company
has been facing faint, unsubstantial 'flu seasons.
With the FDA clearance of the new influenza test, Becton has
expanded its BD Diagnostics portfolio. The company also plans to
launch molecular technology product BD Viper Trich in the European
Union in the current quarter. However, the U.S. launch of the
product is not expected before the fourth quarter of fiscal
We also note Becton's commentary on its BD Diagnostics pipeline
and product launches expected in fiscal 2013. These include BD Max
C. Diff, BD Viper LT with GC/CT and BD SurePath Plus among others.
Management believes that the company's pipeline is the most
flourishing in recent times.
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
) 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.
BAXTER INTL (BAX): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis
To read this article on Zacks.com click here.