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Medical technology major Becton, Dickinson and Company (BDX - Analyst Report) and JDRF reported that together they are hastening the creation of new offerings that amalgamate Becton’s glucose monitoring and insulin infusion expertise. The latest 3-year agreement builds upon a pre-existing relationship between the two parties to tackle type 1 diabetes.

JDRF is the biggest charitable financier for research into type 1 diabetes. It aims to eventually eliminate type 1 diabetes. In 2012, JDRF provided over $110 million for type 1 diabetes research. It is at present the sponsor of $530 million in scientific study in 17 nations.    

Those suffering from type 1 diabetes use an insulin pump to receive insulin which requires usage of a catheter. They must also monitor the level of glucose by using a continuous glucose monitoring device, which again requires a catheter-type sensor.

BDX and JDRF will strive to create a solitary device which will carry out both functions, without requiring catheters. This capability to carry out separate metabolic processes in a systematic manner, while curtailing human interference, leads to the concept of an artificial pancreas.  

We remain cautious about Becton Dickinson due to the lack of major short-term catalysts. The rising demand for safety-needle products (with higher price points and margins) was the primary driver of the company’s past growth. This is not expected to continue, given that the U.S. market is already largely penetrated.

On the positive side, Becton Dickinson’s preeminent global healthcare products franchise is partly insulated from volatile macroeconomic conditions and structural deficiencies elsewhere in the healthcare delivery field.

The stock retains a Zacks Rank #3 (Hold). We are more positive about other stocks. CONMED Corporation (CNMD - Analyst Report), Heartware International Inc. (HTWR - Snapshot Report) and The Cooper Companies Inc. (COO - Analyst Report) each carry a Zacks Rank #2 (Buy) and are expected to do well.

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