Leading global medical technology company Becton, Dickinson and Company (BDX) recently disclosed its commitment to “Pink Ribbon Red Ribbon”, in an effort to exploit private and public investments in worldwide healthcare. Their focus will be to fight breast and cervical cancer. Leadership will be provided by the President's Emergency Plan for AIDS Relief (“PEPFAR”), George W. Bush Institute, the Joint United Nations Programme on HIV/AIDS (UNAIDS) and Susan G. Komen for the Cure.
Pink Ribbon Red Ribbon is an effort to harness private and public investments in healthcare to fight breast and cervical cancer in Sub-Saharan Africa and Latin America. The organization will increase the availability of cervical cancer monitoring and treatment among at-risk women in less developed nations. The effort will harness the platform of the PEPFAR model. Pink Ribbon Red Ribbon has received commitment for $80 million for 5 years.
Cervical cancer is a major killer among young women in the less developed nations. It is the third most frequently occurring cancer among women and the most common in Africa. Cervical cancer is also widely prevalent in certain parts of Latin America. Over 85% of the worldwide burden from cervical cancer occurs in the developing world, where it constitutes 13% of all cancers striking women; yet, less than 5% of the afflicted have access to screening even once in their lives.
Becton Dickinson’s cervical cancer diagnostic methodologies use liquid-based cytology, a process of readying cervical cells for scrutiny in a lab. The centrifuging mechanism in liquid-based cytology leads to better samples which are easier for lab technicians to analyze.
Becton Dickinson will support Pink Ribbon Red Ribbon to provide sustainable and dispersed access to modern cancer diagnostic know-how for patients residing in nations aided by PEPFAR. To achieve its purpose, Becton Dickinson will provide steeply discounted pricing on critical cervical cancer diagnostic tests in low income nations.
The discount may be quantified at about $10 million for every 1 million women tested. In addition, Becton Dickinson will impart training to lab technicians on screening for cervical cancer. It will also cooperate with Pink Ribbon Red Ribbon staff to formulate country-based guidelines for proper screening modalities.
For its part, a spokesperson for Becton Dickinson stated that the company shares a vision with U.S. Government, UNAIDS and The George W. Bush Institute to fight cervical cancer. A representative of the George W. Bush Institute said that one of its goals is to cut down mortality from cervical cancer by about 25% among women monitored and treated under this initiative.
Based on the anticipated favorable foreign exchange impact, Becton Dickinson has hiked its revenue and earnings forecasts for fiscal 2011. The company now expects sales for the year to grow near the higher end of its previously communicated range of 5% to 6% year over year. On a currency neutral basis, sales are expected to increase by about 3% (versus 3.5% earlier) on account of lower sales in Western Europe.
Moreover, the company has raised its earnings per share (on a reported basis) from continuing operations to a new range of $5.65 to $5.70 from its prior view of $5.55 to $5.65, reflecting about 15% to 16% year-over-year growth. Earnings per share from continuing operations for fiscal 2011 are expected to be 14% to 15% higher than adjusted earnings per share from continuing operations of $4.94 in fiscal 2010.
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, which is not expected to continue, given that the U.S. market is already largely penetrated. On the positive side, Becton Dickinson’s pre-eminent 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) in certain niches, in each of its three business segments. We currently have a long-term Neutral recommendation on the stock, backed by a short-term Zacks #3 Rank (Hold).
BAXTER INTL (BAX): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment