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BD's (BDX) Latest Buyout to Enhance its Digital Capabilities

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Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, recently completed the acquisition of privately held Scanwell Health Inc. However, the terms of the transaction were not disclosed.

The acquisition is expected to be immaterial to BD's fiscal 2022 financial results. The financial results of Scanwell, which is a well-known player in the smartphone-enabled at-home medical tests, will be reported under BD’s Integrated Diagnostic Solutions business within the broader Life Sciences segment.

The latest buyout is expected to significantly strengthen BD’s foothold in the global Life Sciences space.

Rationale Behind the Buyout

Earlier, BD had partnered with Scanwell to develop the app used with the BD Veritor At-Home COVID-19 Test. The test is the first at-home COVID-19 test that uses a smartphone camera and app to capture and interpret results, thereby eliminating the human subjectivity prevailing in other visually-read at-home antigen tests.

Per BD’s management, the pandemic accelerated the shift to new care settings. Management believes that the acquisition will enable the company to expand and scale up its digital capabilities in-house in order to speed up the time to market transformative at-home solutions at present as well as in the future.

Following the closure of the buyout, Scanwell is expected to become the foundational digital platform upon which BD plans to develop at-home diagnostic tests for various infectious diseases, including COVID-19/influenza A+B, group A strep, and an additional menu for detecting infections and managing chronic disease.

Industry Prospects

Per a report by Data Bridge Market Research published on GlobeNewswire, the global at-home testing kits market is expected to reach $8,154.74 million by 2028 with a CAGR of 5.3% between 2021 and 2028. Factors like growing health awareness among people, as well as convenience and rapid results are likely to drive the market.

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

Recent Developments in Life Sciences Arm

Of late, BD has witnessed a few notable developments across its Life Sciences segment.

This month, the company announced the BD Veritor At-Home COVID-19 Test is now available for purchase through Everly Health, Southeastern Grocers (parent company of Fresco y Más) Harveys Supermarket and Winn-Dixie stores. The test is also available for purchase on Amazon.com.

The same month, BD announced that it has expanded the BD COR System to include a new MX instrument for high-throughput molecular testing for infectious diseases.

In November, the company reported its fourth-quarter fiscal 2021 results where it reported robust overall top-line growth. Performance of the Life Sciences arm was also impressive, driven by strong double-digit growth in the company’s base business in both Integrated Diagnostic Solutions and Biosciences.

Price Performance

Shares of BD have lost 0.1% in the past year against the industry’s 13.2% growth and the S&P 500's 26.1% rise.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank & Key Picks

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

Some better-ranked stocks in the broader medical space are Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp, Thermo Fisher Scientific Inc. (TMO - Free Report) and AMN Healthcare Services (AMN - Free Report) .

LabCorp, flaunting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 10.6%. LH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.73%. You can see the complete list of today’s Zacks #1 Rank stocks here.

LabCorp has gained 49.2% compared with the industry’s 13.2% rise over the past year.

Thermo Fisher has an estimated long-term growth rate of 14%. TMO’s earnings surpassed estimates in the trailing four quarters, the average surprise being 9.02%. It currently carries a Zacks Rank #2 (Buy).

Thermo Fisher has gained 42.3% compared with the industry’s 7.3% rise over the past year.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.51%. It currently sports a Zacks Rank #1.

AMN Healthcare has gained 75.1% against the industry’s 59.8% fall over the past year.