NEW YORK – Despite expected declines in COVID-only testing, Becton Dickinson raised its full year 2023 guidance in anticipation of continued growth in its core business.
The Franklin Lakes, New Jersey-based firm reported fiscal 2023 first quarter revenues of $4.59 billion for the three months ended Dec. 31, compared to $4.72 billion in the prior year.
On a call with investors to recap the results, Tom Polen, BD's CEO, reiterated that the firm is continuing to strengthen its position in "attractive and higher growth end markets."
He highlighted the firm's product pipeline that is expected to drive future growth, such as the launch of its multiplex respiratory viral panel on the BD Max automated PCR system outside of the US. The panel detects COVID-19, flu A and B, and respiratory syncytial virus in a single test. It is "an ideal solution for endemic respiratory testing," Polen said, and "aligns to our strategy to accelerate growth in the $4 billion molecular diagnostics end market that is growing about 9 percent."
The firm is also further investing in point-of-care testing, which Polen called "one of the fastest growing categories in diagnostics today." To this end, BD expects to file for 510(k) clearance for a capillary blood collection device by the second half of the year.
Revenues exceeded Wall Street analysts' average estimate of $4.52 billion. Excluding revenues related to COVID-19-only diagnostic testing, BD said its base revenues increased a fraction of a percent year over year to $4.55 billion from $4.53 billion a year ago.
The life sciences segment recorded $1.30 billion in revenues, down 12 percent from $1.48 billion in Q1 2022. The results reflect a decline in COVID-only testing that BD said was offset by growth in the base business, particularly respiratory testing.
Specifically, the firm realized $31 million in COVID revenues in the quarter, down from $185 million in the prior-year first quarter.
Dave Hickey, president of the life sciences business, said the firm sees combination respiratory testing as a significant unmet need going forward. The respiratory virus panel is currently under Emergency Use Authorization review at the US Food and Drug Administration, Hickey said, and the firm has also filed an EUA for an at-home combination test.
In terms of COVID testing, Hickey said COVID-only testing has shifted to combination tests, and the firm anticipates that will become the standard of care. "We've built a [combination testing] portfolio across BD Max, BD Cor, and Veritor, and potentially Veritor At-Home," he said. In the at-home market, the firm is continuing to pursue digital-enabled home testing, rather than visually read testing. Polen added that this strategy seems likely to lead to "durable revenue" in the future.
Within life sciences, integrated diagnostic solutions revenues were down 17 percent to $952 million from $1.15 billion, while biosciences revenues increased 3 percent to $349 million from $338 million.
BD medical segment revenues grew approximately 2 percent to $2.15 billion from $2.12 billion, while BD interventional segment revenues rose 1 percent to $1.13 billion from $1.12 billion.
Revenues from the company's US business increased 1 percent to $2.73 billion from $2.70 billion a year ago. Revenues from international markets were down 8 percent to $1.86 billion from $2.02 billion.
BD recorded net income for the quarter of $509 million, or $1.70 per share, compared to net income of $677 million, or $2.28 per share, a year ago. On an adjusted basis, the company reported Q1 EPS of $2.98, beating the consensus Wall Street estimate of $2.68 per share.
The company finished the quarter with $612 million in cash and cash equivalents and restricted cash of $133 million.
The firm said it is raising its guidance for fiscal year 2023 to a range of $19.10 billion to $19.30 billion from the $18.6 billion to $18.8 billion previously announced.
The revenue guidance assumes approximately $50 million to $100 million in COVID-only diagnostic testing revenues, which is a decrease of approximately $75 million at the midpoint, compared to approximately $125 million to $175 million previously announced.
Expected adjusted EPS for the full fiscal year was also increased to a new range of $12.07 to $12.32 compared to the range of $11.85 to $12.10 previously announced. Analysts' average estimate is for $11.95 for the year.
BD shares were up a fraction of a percent to $254.66 in early Thursday morning trading on the New York Stock Exchange.