U.S device maker Becton, Dickinson and Company plans to spin off its diabetes care business to focus on other businesses while the company continues to grow its diagnostic testing, medication delivery and other businesses.
BD’s announcement Thursday comes as the company beat Wall Street analysts’ earnings expectations for the company’s second fiscal quarter on strong sales of Covid-19 tests and vaccine delivery devices. BD now has commitments to make more than 1.7 billion syringes for Covid-19 vaccinations around the world, the company said.
BD reported quarterly net income of $277 million, or 95 cents a share, compared to $145 million, or 53 cents a share, in the year-ago quarter. Revenues rose more than 15% in the quarter to $4.9 billion.
“The spinoff will allow BD to strengthen its growth profile, enables a greater investment focus on our other core businesses and high-growth opportunities, and makes a greater impact for our customers and patients,” BD chairman and chief executive Tom Polen said.
Polen told analysts on a call Thursday morning that the spinoff, which will be a new publicly traded company they have yet to name, will be a more effective way to grow both companies and be an “operating catalyst” for the diabetes care business. He expects the new spinoff to be completed in the first half of 2022.
“We are proud of BD’s leadership in driving innovation to support people with diabetes and believe this transaction will empower (the spinoff) to advance a more focused strategy and capital allocation policy to further advance innovation and growth specific to its unique market,” Polen said. “As a standalone public company, we believe (the spinoff) will be better positioned to leverage its leadership position in insulin delivery to advance vital, innovative solutions to the large and growing number of people living with diabetes worldwide.”
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