BD CEO Forlenza: Carefusion Synergies, Medtronic Partnership On Track
By Jof Enriquez,
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Becton, Dickinson & Co. (BD) is ramping up product registrations of CareFusion products one year after closing its acquisition of the company.
BD president and CEO Vincent A. Forlenza said in the company's second quarter earnings call recently that the company is well into the registration process, "having successfully registered more than 50 CareFusion products in over 20 countries. In addition, we have submitted registrations and are awaiting approval for an additional 25 products. This is consistent with our plans to achieve revenue synergies and we remain on track for them to begin to materialize in fiscal year 2017."
Acquired by BD for $12.2 billion, CareFusion manufactures automated dispensing systems and infusion pumps that deliver medications through intravenous catheters and syringes, products which BD makes. The transaction strengthened BD into a more well-rounded medication management enterprise, which gained it added leverage with pharmacy and hospital clients.
As a result of the smooth integration of CareFusion, BD upgraded its original cost synergy target by $100 million.
"We remain on track to achieve our FY 2016 cost synergies and continue to expect $325 million to $350 million in total cost synergies as we exit fiscal year 2018," Forlenza told analysts during the call.
When asked what's next after the CareFusion portfolio review, in terms of capital deployment, Forlenza said he's open to "plug-in acquisitions" that will serve both the company's strategy to impact the market and how its creates value for shareholders.
On collaborations, the company said that a partnership with Medtronic on a new insulin infusion set is on schedule for a limited launch by the end of 2016, involving a set group of patients prior to full commercialization.
"We remain excited for the launch of our infusion sets, which we expect will move to broad commercial release with Medtronic in early fiscal year 2017. We believe this product will improve the consistency of insulin delivery by significantly reducing flow interruptions, simplify the users' experience and increase the patients' overall satisfaction with insulin pumping," said Forlenza.
BD executives had told analysts in a previous earnings call in January that they intend to reinvest the savings from the suspension of the medical device tax back into their R&D efforts to boost innovation, and they reiterated that plan in the recent call.
"Since that time, we have already allocated increased R&D dollars to highly strategic initiatives. Not only will this help to fund – drive future growth for the company, but it will also enable better outcomes for our customers and their patients," said Forlenza.
"We expect the second quarter tax timing to reverse and R&D spend to ramp over the back half of the year, which includes reinvestment of the medical device tax," added BD CFO Christopher R. Reidy.
Some of BD's new product launches in the past quarter include the UltraTouch Push Button Blood Collection Sets and the Barricor vacutainer tubes with a gel free separator technology that improves lab sample quality and hastens turnaround time. The company also touted positive uptake for its FACSymphony X-50 and X-20 cell analyzers. On the horizon, BD said it will soon launch its GenCell CLiC library preparation platform and our FACSseq cell sorter for genomics applications.
For the first quarter of FY 2016, BD reported revenues rose 55 percent to $3.07 billion compared to $2.05 billion year-on-year, which was in line with expectations. Revenues in the United States surged 99 percent to $1.71 billion from $863.0 million a year ago, while revenues from international markets rose 14 percent to $1.35 billion from $1.19 billion in Q2 2015, reports GenomeWeb.
"We are pleased with our second quarter revenue growth and strong operating performance," said Forlenza in a statement. "Our results this quarter continue to demonstrate the breadth and diversity of the growth drivers within our portfolio. This performance enables us to continue to create value for shareholders and provides us with the capacity to invest for the future.