BD
(NYSE: BDX)
announced that its board unanimously authorized management to pursue the separation of its Life Sciences business.
Shares of BDX fell 1.3% to $241.85 apiece in pre-market trading today.
The company plans to separate its Biosciences and Diagnostic Solutions unit from the rest of BD. It hopes to enhance strategic focus and growth-oriented investments and capital allocation to improve value creation for shareholders. This announcement comes days after a Financial Times report outlined investor interest in separating the businesses.
BD said the decision comes as part of a comprehensive portfolio evaluation launched in early 2024. It wants BD to be recognized as a focused, innovative and growth-oriented medtech leader with four segments aligned to essential needs and higher-growth trends in healthcare. The company expects the separated business to become a differentiated leader in life sciences tools and diagnostics.
This business brought in nearly $5.2 billion in 2024, contributing 25.7% of the medtech giant’s overall revenues for the year. The unit includes the company’s Integrated Diagnostic Solutions (IDS) and Biosciences (BDB) business nuts. IDS includes specimen management technologies, while BDB offers technologies like cell analyzer technology and cancer reagents. Specimen Management, which is part of the Life Sciences segment, is staying with New BD.
“Our BD 2025 strategy has transformed the company into a faster-growing, more profitable organization positioned at the forefront of long-term growth trends in health care, and we believe today’s announcement is an exciting next step in unlocking significant potential value for all our stakeholders,” said Tom Polen, chair, CEO and president of BD. “We believe the separation will position New BD as a differentiated medtech leader and enable optimized investment to accelerate our innovation pipeline and ongoing margin enhancement through BD excellence to further fund growth.
“We believe Biosciences and Diagnostic Solutions is expected to deliver substantial value as a pure-play leader in life sciences and will be well-positioned to execute on its unique and compelling solutions and growth opportunities. This transaction is designed to position both businesses to thrive in our respective sectors and deliver value for shareholders.”
BD to become pure-play medtech innovator
This separation would mark the second significant business sale by BD in recent years after it spun off Embecta, its diabetes unit.
Following the separation, BD expects to become a pure-play medtech company with four new operating segments poised for growth. BD bolstered these offerings with the addition of Edwards’ Critical Care business last year as well.
Medical Essentials, which includes Medication Delivery Solutions and Specimen Management, offers IV catheters, PICCS, flush and other essential vascular access and management solutions, blood collection solutions, syringes and advanced needle technologies.
Connected Care includes Medication Management Solutions and Advanced Patient Monitoring. It features smart devices using automation, AI and analytics to improve patient care.
BioPharma Systems, with a name change from Pharmaceutical Systems, delivers biologic drug delivery and develops and manufactures drug delivery devices for the pharmaceutical industry. The company said this includes transitioning to biologics like GLP-1 treatments.
Finally, BD Interventional includes the company’s Urology and Critical Care, Peripheral Intervention and Surgery businesses. These units offer solutions for chronic conditions like urinary incontinence, peripheral vascular disease, cancer and hernias.
With the changes, BD expects 2024 revenues to total approximately $17.8 billion.
Details of the planned separation
BD said its board is committed to exploring all opportunities to execute the separation. That could include a Reverse Morris Trust, sale, spin-off or other transaction. It expects more specifics by the end of fiscal 2025 with completion earmarked for fiscal 2026.
The company said that, as it pursues this sale, it remains focused on execution. It intends to continue operating the business and other units in alignment with its strategy. That includes continued investments in commercial growth, innovation, M&A and other initiatives.
As a result of the announcement, BD decided to postpone its investor day, previously scheduled for Feb. 26, to focus on the transaction. It expects a comprehensive update on strategy closer to the separation.
What about BD’s first-quarter results?
In addition to the planned sale, BD announced financial results for the first quarter of 2025.
The Franklin Lakes, New Jersey-based company company reported profits of $303 million. That equals $1.04 per share on sales of $5.168 for the three months ended Dec. 31, 2024.
BD recorded a 7.8% bottom-line gain on a sales increase of 9.8%.
Adjusted to exclude one-time items, earnings per share came in at $3.43. That landed 44¢ ahead of expectations on Wall Street. Sales also topped estimates as experts forecast $5.11 billion in revenue.
“We delivered strong operational performance in Q1, with revenue growth, margin expansion and earnings per share all ahead of our expectations,” said Polen. “We continue to transform our company through BD 2025, and our intention to separate Biosciences and Diagnostic Solutions builds on the strong foundation and momentum of our strategy. This separation is designed to unlock significant value for both ‘New BD’ and Biosciences and Diagnostic Solutions as each focuses on maximizing growth, delivering leading innovation and operational excellence in their respective markets. Our talented teams continue to drive solid execution of BD 2025 and meaningful innovation in these businesses and across BD.”
BD expects adjusted EPS to range between $14.30 and $14.60 for the full year, a slight rise at the back end from previous forecasts for between $14.25 and $14.60. It projects between $21.7 billion and $21.9 billion in sales, cutting its previous range of $21.9 billion to $22.1 billion.
