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BD's (BDX) Buyout of Venclose to Improve Patient Outcome

Becton, Dickinson and Company BDX, popularly known as BD, recently announced its acquisition of Venclose, Inc. However, the terms of the transaction have not been disclosed.

It should be noted that the impacts of this buyout are expected to be immaterial to BD's fiscal 2022 financial results.

For investors’ note, Venclose is a provider of solutions for the treatment of chronic venous insufficiency (“CVI”), which results from malfunctioning valves and can lead to varicose veins (twisted and enlarged veins).

The latest buyout is expected to significantly strengthen BD's existing venous disease portfolio, thereby boosting its Peripheral Intervention arm on a global scale.

Significance of the Buyout

Per current estimates, CVI impacts up to 40% of women and 17% of men in the United States, thereby representing a growing therapeutic need within the healthcare system.

Venclose’s provision of CVI treatment via its innovative Radio Frequency (“RF”) ablation technology platform has been developed for versatility, efficiency and simplicity. It should be noted that RF ablation is the predominant treatment of CVI and is widely accepted by physicians. RF ablation catheters can potentially reduce post-operative pain and bruising in patients, unlike the alternative laser treatment therapy for CVI.

The technology of the Venclose System has been created to aid in providing a patient-centric approach to care.

Per management, the Venclose buyout is expected to enable BD to offer a more robust portfolio of solutions to physicians treating the full range of venous conditions. Further, the Venclose RF Ablation System strategically complements the company’s portfolio of venous disease technologies.

Industry Prospects

Per a report by Allied Market Research, the global varicose vein treatment market was valued at $376.64 million in 2017 and is anticipated to reach $589.06 million by 2025 at a CAGR of 5.7%. Factors like the rising incidence of varicose vein problem, rise in elderly population and technological advancements are likely to drive the market.

Given the market potential, the latest acquisition is expected to significantly strengthen BD’s business worldwide.

Recent Developments

Of late, BD has witnessed a few notable developments across its businesses.

In November, the company reported its fourth quarter of fiscal 2021 results, where it recorded robust overall and segmental revenues.

BD, in October, announced the formation of a public-private partnership with the Biomedical Advanced Research and Development Authority (part of the U.S. Health and Human Services Office of the Assistant Secretary for Preparedness and Response) to support the development of a range of COVID-19 combination diagnostic tests for core laboratories, hospitals and at the point of care.

The same month, the company started shipping the first over-the-counter COVID-19 rapid antigen test to use computer vision technology in a smartphone to interpret testing results.

Price Performance

Shares of the company have gained 3.2% in the past year compared with the industry’s 11.1% rise and the S&P 500 composite’s 23.4% growth.

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Zacks Rank & Key Picks

Currently, BD carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Chemed Corporation CHE, Thermo Fisher Scientific Inc. TMO and AMN Healthcare Services AMN.

Chemed, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted earnings per share (EPS) of $5.06, which beat the Zacks Consensus Estimate by 13.5%. Revenues of $538.7 million outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chemed has an estimated long-term growth rate of 7.7%. The company surpassed estimates in the trailing four quarters, the average surprise being 5.59%.

Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank #2.

Thermo Fisher has an estimated long-term growth rate of 14%. The company surpassed estimates in the trailing four quarters, the average surprise being 9.02%.

AMN Healthcare reported third-quarter 2021 adjusted EPS of $1.73, which surpassed the Zacks Consensus Estimate by 29.1%. Third-quarter revenues of $877.8 million outpaced the Zacks Consensus Estimate by 12.3%. It currently sports a Zacks Rank #1.

AMN Healthcare has an estimated long-term growth rate of 16.2%. The company surpassed estimates in the trailing four quarters, the average surprise being 19.51%.

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Becton, Dickinson and Company (BDX): Free Stock Analysis Report
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