By Jof Enriquez,
Follow me on Twitter @jofenriq
C.R. Bard Inc. posted better-than-expected Q4 2016 results, driven by all four product divisions and strong performance in U.S. and emerging markets. The company plans to increase investments in emerging markets to help sustain its momentum throughout 2017 and beyond.
The New Jersey-based manufacturer of catheters, stents, and surgical grafts reported fourth quarter 2016 net sales of $967.1 million, up 11 percent over the same period the prior year, which exceeded most analysts’ estimates. U.S. sales rose 8 percent to $655.0 million, while net sales outside the U.S. surged 18 percent to $312.1 million. For the entire year 2016, the company reported profit of $531.4 million, or $7.03 per share, while total revenue reached $3.71 billion, according to AP/Yahoo! Finance.
“Our strong performance in 2016 once again demonstrated the effectiveness of the execution of our strategic investment plan. We are seeing a broad contribution to growth across our portfolio, from each of our four businesses both domestically and internationally. We remain in investment mode and continue to focus on providing shareholders with above-average revenue growth and attractive profitability,” Bard CEO Timothy M. Ring said in prepared remarks.
Bard has four divisions and more than 15,000 products in the disease areas of vascular, urology, oncology, and surgical specialty.
Ring told analysts in a conference call that the company’s vascular unit, in particular, had an “excellent” fourth quarter.
“I think the strength of it was based on biopsy in general up 13%, really great execution in emerging markets with our biopsy products continued great penetration with drug-coated balloons around the globe,” said Ring, according to Seeking Alpha.
He added that prospects for Lutonix, the first drug-coated balloon (DCB) in the U.S., “continues to be very exciting”, and that the anticipated premarket approval (PMA) of their arteriovenous (AV) Access DCB later this year will “be significant and helpful both to the end of 2017 and also position us very nicely moving into 2018.”
“We’re continuing to see very strong momentum. And obviously, what we love about our positioning from here forward is, we’ve got leadership and the follow-on indications that are going to be critical to continue to expand that market,” said Ring. “So the franchise that Bard in DCBs we think is unique and positions us we think in a way that makes us very exciting from growth in 2017, 2018, 2019, and 2020, and the teams are focused on executing against all of those follow-on indications.”
In addition, vena cava filters were up 27 percent, and stents grew 12 percent during the fourth quarter, rounding out a strong showing across Bard’s vascular devices portfolio.
Oncology, which Ring described as “globally our most significant opportunity”, also delivered in the fourth quarter with sales of $259.4 million, up 9 percent year-over-year, with the U.S. up 4 percent and international sales growing 15 percent. Urology rose 16 percent with sales topping $253 million; U.S. inched higher by 1 percent and international rose 7 percent. Surgical specialty reached $167.2 million, which was up 9 percent overall; U.S. grew 5 percent and international sales were up 17 percent.
Overall, BARD posted solid fourth-quarter growth in the U.S., but numbers were even more impressive for emerging markets, which accounted for 11 percent of total sales in the quarter. Ring said their strategy of growing sales forces worldwide by over 30 percent in the last three years has resulted in “excellent execution in all the emerging markets right now.” In 2017, half of the company’s 160 new customer-facing reps and clinical specialists will be assigned in emerging markets.
“We’ll continue to run the same playbook in terms of expansion of our footprint, excellent training of clinicians, and the resulting sales force growth. I think that you’ll see that continued focus on 2017 and in the future, we like what our productivity is in these markets. We like the uptake of our sales team and we’re optimistic that we will continue to drive excellent growth for us in those spaces,” said Ring.