BD beats Wall Street on Q3 earnings, reveals FDA denial of Lutonix PMA for PAD

This article has been updated to include information from the company’s earnings call with analysts.

Becton Dickinson & Co. (NYSE:BDX) posted third-quarter results today that beat the consensus earnings forecast on Wall Street and maintained its FY2019 guidance, citing strong year-to-date results and continued momentum.

On the downside, CEO Vincent Forlenza told analysts that the FDA won’t approve the company’s Lutonix drug-coated balloon catheter for use below the knee, according to a transcript by Seeking Alpha. The agency said in March that its preliminary review of long-term follow-up data found a “potentially concerning signal” of increased long-term mortality in people with peripheral artery disease who were treated with paclitaxel-coated devices compared to those treated with bare devices.

A meta-analysis published in the Journal of the American Heart Assn. last December suggested that PAD patients treated with paclitaxel-coated balloons and stents could be at a higher risk for late death. The agency analyzed all available clinical studies conducted with the FDA-approved devices that were randomized, controlled trials or single-arm registries of at least 200 patients with at least two-year follow-up, including: the Levant 2 trial of BD’s Lutonix DCB; the RCT for Cook Medical‘s Zilver PTX DES; the In.Pact SFA I and II studies of the Medtronic (NYSE:MDT) In.Pact Admiral DCB; and the Illumenate study of the Royal Philips (NYSE:PHG) Stellarex DCB. The analysis compared drug-eluting devices with non-eluting devices.

At two years, the observed mortality rates for the paclitaxel-coated device group were higher for the Zilver PTX, Levant 2 and In.Pact SFA I & II trials, the agency said in June.

“While this determination was based on the clinical evidence provided to-date, we continue to review collaborate and align with the FDA on the path forward regarding our submission, including the need to potentially provide additional clinical data,” Forlenza told analysts. “As a result, the approval process timeline has extended out from our previous expectations and we no longer expect approval this calendar year. We will keep you informed as we work with the FDA and make further progress.

Franklin Lakes, N.J.-based BD reported profits of $413 million or $1.51 per share on sales of $4.35 billion for the three months ended June 30, 2019, sending its bottom line by 25.7% lower on sales growth of 1.7% compared with Q3 2019.

Adjusted to exclude one-time items, earnings per share were $3.08, 3¢ ahead of The Street, where analysts were looking for sales of $4.36 billion.

“Third-quarter performance was strong. Our revenues highlight the breadth and diversity of the growth drivers in our portfolio, and we are seeing strength across all three segments,” Forlenza said in a news release. “As anticipated, our performance has accelerated and we expect this momentum to continue. We remain confident in our outlook for fiscal year 2019 and our ability to deliver value to customers and shareholders.”

In the medical segment, as reported, Q3 sales of $2.311 billion increased 2.9% over the same quarter of 2018, driven by performance in the medication management and delivery solutions and pharmaceutical systems. Sales in the interventional segment increased by 2.9% over Q3 2018 to $981 million, aided by performance in the urology and critical care and surgery units.

BD maintained its earnings guidance at $11.65 to $11.75 per share for the rest of 2019 and its revenue guidance at 8% to 9% growth.

Investors reacted by sending BDX shares up 0.71% to $238.01 apiece in midday trading.