Becton Dickinson prepares to say goodbye to its $1B diabetes care enterprise

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Becton Dickinson, a company that was one of the first to sell glass syringes and then to become a world leader in insulin delivery products, is outsourcing diabetes care to a separate company. The aim is to better position every company to grow.

The new, yet to be named, diabetes company will have corporate offices in New Jersey and Massachusetts. It is led by Dev Kurdikar who is currently the worldwide president of BD Diabetes Care. According to an investor presentation, he will oversee a company that manufactures approximately 8 billion devices annually for an estimated 30 million patients worldwide. The diabetes business has nearly $ 1.1 billion in annual sales, more than half of which are in the United States. After the spin-off has been completed, the new company will be traded on the stock exchange.

The currently structured BD in Franklin Lakes, New Jersey, divides its operations into three divisions: BD Medical, BD Life Sciences and BD Interventional. The largest of the three segments is the medical segment, which had sales of approximately $ 8.7 billion in fiscal 2020.

Diabetes care, which includes syringes, pen needles, and products for injecting insulin and other drugs, belongs to the medical segment. According to BD’s 2020 annual report, diabetes care sales have been steady around $ 1 billion for the past three fiscal years.

The Life Sciences segment, which includes diagnostic products including Covid-19 tests, had sales of $ 4.7 billion in fiscal 2020. The interventional segment, which includes surgical products, had sales of $ 3.7 billion. Much of the interventional segment came to BD in 2017 through the $ 24 billion acquisition of CR Bard.

While the new company will concentrate more on diabetes products, the remaining company is pursuing the “BD 2025” growth strategy, which includes R&D investments and acquisitions, as the investor presentation shows. These steps are carried out in three core areas. The first is the application of smart devices, robotics, analytics and artificial intelligence to health processes. Next up are care setting technologies, such as products that control drug storage and prescription filling, as well as Covid-19 diagnostic tests at home. Last are products that improve the diagnosis or treatment of chronic diseases.

In a prepared statement, Tom Poland, CEO and President of BD, said the spin-off of diabetes care is part of the company’s active portfolio management and fits into BD 2025’s strategy.

“The spin-off will allow BD to strengthen its growth profile, allow a greater investment focus on our other core businesses and growth opportunities, and have a greater impact on our customers and patients,” he said.

The spin-off takes place as a distribution of the shares in the new company to the BD shareholders. BD anticipates this transaction will be tax free for US shareholders. The deal is expected to close in the first half of 2022.

Photo: Kerem Yucel / AFP, via Getty Images