Back to top

Analyst Blog

Leading medical technology firm Becton, Dickinson and Company (BDX - Analyst Report) recently revealed that its segment BD Medical received FDA clearance for its BD PhaSeal Closed System Transfer Device as per the most recently devised ONB code. The BD PhaSeal system is the sole such approved system under the code, which was devised for devices with indications for use with hazardous substances. The FDA clearance reflects the company’s commitment to provide a safe workplace for healthcare employees.

The approval from the FDA relied on three parameters namely, blockage of entry of microbials, escape prevention of dangerous drugs and blockage of contaminating substances from the environment.  The BD PhaSeal System is the sole Closed System Transfer Device at this time that satisfies all three criteria.

Thus, the BD PhaSeal System curtails healthcare workers’ exposure to dangerous drugs. It physically disallows the escape of substances from the system to the environment as well as the leakage of hazardous material in the surroundings into the device.     

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.

Becton Dickinson faces a wide range of competitors, including Baxter International (BAX - Analyst Report) in certain niches, in each of its three business segments. We currently have a Neutral recommendation on Becton Dickinson. The stock retains a Zacks Rank #2 (Buy) rating.

Please login to Zacks.com or register to post a comment.