Becton, Dickinson and Company (BDX) Earnings Call Transcript & Summary

Great. Good afternoon, everyone. Welcome to our next session here in the MedTech Innovations Virtual Summit. I'm Matt Taylor, UBS' U.S. medical supplies and devices analyst and really pleased to be joined by management from Becton, Dickinson. We're calling this session Fueling Innovation Since 1897, which is not something that we could say for, I think, any other company that we cover, so a long history here. And we're very pleased to be joined today by Tom Polen, who's the President and CEO of BD; and also, we have Patrick Kaltenbach, who's the EVP and President of the Life Sciences segment. So we'll have a robust fireside discussion with the group here focusing in and out on overall Becton innovations but also specifically on some in life sciences. And it's a great opportunity to get a kind of drill down on that segment as well. So Tom and Patrick, thank you so much for joining us today. And thanks for spending the time.

Thanks, Matt. We love the title of the session as well, too. So looking forward to the discussion.

Thanks, Matt.

Yes. Well, good. Well to -- it's a start. I wanted to give you the opportunity to focus on the history of innovations here. And given the title, we probably need to limit it to a few to make sure we get to other topics. But do you want to talk about the long history that you've had as a company, maybe some of the key innovations that investors may not even be aware of that were Becton first to start that you're most known for?

Sure. So let's go a little ways back now, all the way back to 1897, but we'll start in 1949, which was when we invented the evacuated method of drawing blood. It had always been a drawn with syringes before then [ and for a long time until ] the Vacutainer came up. Then -- yes, just as -- we shared this in the past, of course, that's talked about kind of in organic and inorganic innovation, both being levers that we've pulled throughout our history. That's an example of a product that inorganically came into the company. It was licensed from a gentleman named Joe Kleiner that we then obviously did great things with and is the standard for blood collection today. In 1954, we developed the first sterile disposable syringes and needles, so actually some of the basic technology that ended up allowing sterile, disposable medical devices period. We developed and actually licensed then some of that technology again as well and used that. That was actually first produced at the request for the Institute for Infantile Paralysis (sic) [ National Foundation for Infantile Paralysis ], which is now the March of Dimes, to help in large -- work that they were doing. We supplied big trials for the STOP polio vaccine back in that period of time. And obviously, that's had a huge impact going forward, not only on plastic syringes but ended up building the entire business of our Hypak business and pharm systems built on that and the broader impacts across medical devices using some of that single-use disposable device industry that ended up being built up. First flow cytometer, 1972. That was actually partnered and licensed from Stanford University. We really pioneered the use of flow cytometry for research, which has really led to a bunch of transformational discoveries, including stem cell therapy and immunotherapy that was widely -- some of that early research was all done with flow cytometry. And maybe just a couple of last things here so we can get to more because, like you said, there is a long list. First automated tuberculosis testing, we did back in 1981. Safety engineered devices, of course, BD led the transformation from traditional syringes to -- and needles to safety devices. That started back in the late 1980s, has saved catalyst numbers of health care workers from exposure to HIV, hepatitis, other diseases. We've put in billions of dollars in development and manufacturing of those products and have driven, of course, conversion through public policy work that we've done with governments around the world. Today, that's about a $4 billion revenue stream for us. Auto disable immunization devices as well where -- so it's less about protecting the health care worker but making sure that the needles weren't reused going patient to patient, transmitting HIV or hepatitis to them and has had a big impact in stopping the spread of disease, particularly among children during max -- mass immunization campaigns. And then more recently, which, in this world, we'll use post kind of 1990s, you get into everything from laboratory automation with Kiestra and PhaSeal and MAX that we've done. And the list, obviously, goes on, but a long history of innovation and making big impacts on health care around the world.

Great. Great. And it seems like the last several years, the innovation strategy has come more in focus than ever. And you've talked about changing your approach to R&D. Can you talk about how you've done that and how you prioritized things differently and maybe how the acquisition of Bard has changed some of that? Because that was also an organization that was known for having a good innovation function.

Yes, absolutely. So let me maybe just start off by -- as you think about our innovation strategy, it's focused, first off, on supporting our goal that we've been very clear about of consistent, durable 5%-plus growth on a normalized basis as we look forward. We're a $17 billion company today, and we address about a $60 billion served market. And the markets that we're in, we've been very strategic over the last several years selecting those, and that includes the entry into the number of the markets that the Bard acquisition got us into. And we're really focused on markets where we can build disproportionate advantage in where we see future health care trends and growth opportunities evolving. So if you look at the markets that we play in, and I'll take this as a pre-COVID number, the markets that we play in today serve -- or are growing about 4% underlying. And that's up from -- Bard brought us up from about 3.5% pre Bard. Bard was in purposely higher-growth markets. And so that brought us up to 4%. So that's a good base to build out of as we think about that durable 5% plus growth that we're focused on. As you think about the dollars that we spend, we invest about $1 billion in R&D, and about half of that is invested in new product innovation. The other half is spent on sustaining engineering, other support for our base business today that includes things like EU MDR investments. And obviously, we're constantly changing materials and upgrades to the products that would be in the sustained engineering bucket. As we look at our new product pipeline, first off, we see that it's healthy. And I think it's as healthy or more healthy than it's ever been. And we are very purposeful, and I can talk about our processes in a second. In making trade-offs, we do it across segments. We actually -- Patrick was just in those sessions where we're rolling up the segments or looking, saying, what are the best opportunities across the businesses in my segment, and then we're doing the same thing at a company level, looking at where the best opportunities across the segment. And every year, we're just -- we're moving R&D dollars across businesses and across segments to pursue those highest growth opportunities. As we look at our portfolio today, right, through that process, we've been able to build an R&D portfolio that serves markets that are growing at about 6%. So if we look at what's in our R&D pipeline, while our current base business plays in markets of 4%, our R&D pipeline is invested in markets growing an average of 6%. And that's right along with our goals, right? Accretive growth is one of the fundamentals that we look for in our -- in every single one of our investments. And so some of those markets that we're investing R&D disproportionately in -- and I'm sure we'll talk about some of these, right? In Life Sciences, in Patrick's business, he's focused certainly in molecular diagnostics. You can see our BD COR launch, our high-throughput molecular platform, which also houses our new HPV assay, including the new genotyping assay that you saw recently get FDA approval. That's an example of that. You saw our POC acquisition that we did earlier this year, NATDx, on molecular. And I think everyone is very familiar with the continued investments we make in MAX. Lab automation is another growth-accretive space Life Sciences is investing in. And then high-end flow cytometry, large multiplexing technologies and sorting that allows for single-cell genomics and other things utilizing our technology is a high-growth area that we're investing in. As you think about BD Medical, we're disproportionately investing in areas like medication management, including our next-generation Alaris pump. Our next-generation Pyxis solutions are all examples of those. Self-administered drug delivery business and our Hypak business continue to be areas of disproportionate R&D investment as is Vascular Access solutions. And then in Simon's business, in Interventional, areas that -- again, higher-growth, disproportionate R&D investment would be things like oncology -- interventional oncology; home urology care, having great success there with some recent launches; integrated urology solutions; dialysis access; and peripheral vascular disease. All the markets I just mentioned, are collectively growing above 6%, right? And they help us not only strengthen our core, and I think one thing you heard was -- you also didn't hear any really wide, field-adjacent spaces because there are attractive growth markets that leverage existing commercial channels where we get synergies, particularly, that help us flow through to bottom line leverage that strengthen our core business. Even if the spaces are slower growing in core, there's adjacent higher-growth spaces like some of the ones I mentioned that help us pull those growth rates up, and that help us modernize the company to meet future needs of health care. I think medication management and how we're using informatics there is an example of that. So just a little bit of the way I'd answer this question.

Yes. No, that's sort of a good rounded view of some of the hot areas that you're looking at. And maybe we could go back to that process that you've talked about because it is managing a big portfolio. And I know that, that is an important part of the whole formula to be able to make good decisions about where to go. So can you talk about how you do that, how you prioritize and anything that is done differentially throughout the different divisions in the company?

Yes. And Patrick can jump in on this. I'll give a high level at a company. So again, we're focused on those markets where we're strongest, disproportionate new growth opportunities aligned with key future trends. We have kind of 2 streams as we also look at the overall portfolio. And we're constantly -- we have segments, and we've broken our portfolio into kind of 3 tiers of markets. There's Tier 1 markets, which are those that we're most focused on our investments in, and those are all, again, growing above kind of our base market rates. There's Tier 2 spaces that are attractive but not as high priority. And then there's 3, which is where we're really more just kind of just continuing to manage the base, but we're minimizing investments in. We don't want to walk away from those spaces, but we're feeding them just enough to kind of keep them going as we redirect the money into the other spaces in Tier 1 and Tier 2. And we've actually segmented our entire spaces that we play in, all $60 billion of those served markets into 1 of those 3 categories. And we think about then how we leverage both our -- we look at our organic pipeline and the opportunities that are coming up there, and we make very active trade-offs. We even have an innovation fund that people come and compete for money on across the company. And then we have a process that actually just came out of our routine kind of biweekly meeting, where we're looking at, on the inorganic side, again, licensing, tuck-in M&A, what opportunities we see inorganically to be feeding into that funnel. And both BD and Bard have a very strong track record of leveraging both organic and inorganic as tools in driving their innovation pipeline. I think the other thing you've seen us do increasingly over the last couple of years are also R&D collaborations, particularly when it comes to new-to-world innovations or technologies that are just new to BD. And some examples of that are the new BD COR molecular system. It's really fantastic. If you're familiar with it, it's probably one of the, if not the, most automated, high-throughput molecular platform, right? Put your samples in, shut the door, results come out, right, if you put a Pap vial in or one of the swabs, full automation. That was capabilities that -- we have automation but not at that level, necessarily, and so we had a partner that we worked with closely to develop that whole platform. Microsoft would be an example of a partner on the artificial intelligence side and data analytics that helped us develop our diversion -- narcotic diversion software in MMS. And we're continuing to do that with other areas. I've referenced before how we're doing that with our type 2 patch pump in diabetes or even our next-generation Alaris pump platform we're doing with partners that has some really unique new capabilities in it. And then as I mentioned, we have a long history of using inorganic tuck-ins we often call -- we'll refer to that internally as kind of inorganic innovation, can be just before launch often, could be a couple of years before launch. But that's not new to us either, obviously. Kiestra, BD MAX, Veritor, PureWick, Lutonix, they're all good examples. And especially, the first few I mentioned, those all came in just the last 2 years that primarily use -- just our -- that helped fund growth for us. And as we think about the last couple of years -- I'd also just say I know John DeFord is pretty well known as saying about 70% of Bard's innovation pipeline came through those types of inorganic R&D. They bring them in, and then we did a phenomenal job at iterating them, right? Think Lutonix: come in as one product, and the next thing you know, it's an entire platform that they've built off of PureWick, [ which ] came in for hospital applications, we're now bringing it into the home, really good success there. And since BD and Bard came together, we've been very focused on paying down debt with our free cash flow. And so we haven't done as many of those tuck-ins. We've done about half since we've been together than what each company was doing before we came together. So since we've come together, we've done a few. So WavelinQ, Straub Medical and NATDx are all good examples of that, but we've been constrained. And so, right, we're focused on making sure we're making those really tough trade-offs internally on our organic portfolio and then we're being equally disciplined in how we look at the tuck-ins. And things that we use there, obviously, we're looking at ROIC, we're looking at accretion, and we're looking at strategic fit and, again, how it leverages our core capabilities to create disproportionated advantage.

Great. Yes, very thorough there. The other thing I wanted to ask you about was -- obviously, we're in a very different environment than we normally operate in. What are some of the challenges with introducing innovation? When you've got 30 products on the investor deck that you want to introduce over the next year, how do you do that in a COVID environment? And what are some of the things that you can do to mitigate those challenges?

Yes. It's a great question. It's one that John and I have talked about for a while and this year, in particular, quite a bit. So maybe let me just step back because I think one of the things that we're proud of is, over the last couple of years, we have made really good improvements in our R&D effectiveness. And kudos to John DeFord when he joined us as CTO 2.5 years ago. And he's really done a great job of building a strong team beneath him. He's brought in segment leaders that are very senior R&D executives, that are in each of the segments. We have leaders underneath them which he's groomed and then really built processes and operating mechanisms that help make sure that we're executing on time; or when issues arrive, they're getting jumped on; creating a culture where people speak up and raise issues so they can get addressed earlier. It's a journey that we've been on and will continue on ahead but one that, I think, we're proud of the progress we've made. I mean, as you look at today, we're delivering over 80% of new product launches on time. That's up from about 57% 3 years ago. We're also seeing improvements in our R&D milestone hit rate. Again, we're over 80% now on that. That was about 60% 3 years ago. So that's a solid base that we came into COVID with. And if we hadn't made that progress, we wouldn't be where we are now in COVID. So as we think about in this COVID world, of course, in '20, we had 13 launches in the second quarter. We had 4 launches in the most recent quarter in the middle of the pandemic. I often talk to John about, probably every other week, what are we seeing from COVID impact on our pipeline. I walk over to our R&D teams here in -- I'm in the office pretty much every day for the last several months in Franklin Lakes. The other teams that are most in the office are our R&D associates. And so I'll walk over and in a socially distanced way just talk to them and see how they're doing. And we're progressing them. Same thing, I'm flying out to California next week to go meet with our MMS and the Veritor R&D teams to see them and then shoot back. But our R&D teams are still working. Some of them are working from home. Some of them are in the labs, but they're continuing to progress and actually will continue to improve our on-time launches and on-time delivery this year even despite COVID. And I think that just speaks to the positive momentum that we had coming in. Maybe a good transition to -- for Patrick, as we think going forward in this discussion as well, is in the middle of the COVID, we're really proud of -- we've introduced 3 molecular diagnostics on BD MAX that we had, of course, zero plan on developing at the beginning of the year that we've since made more than 3.5 million COVID molecular tests on the MAX platform. We've launched the SARS-CoV-2 antigen assay on Veritor Plus, a product that -- remember, the last time we had developed an assay on Veritor was about 10 years ago. I was the President of Diagnostic Systems when we developed Veritor, and when we launched Veritor, I led that. And once we put the initial respiratory assays in the market, which pretty much launched all at once, there hadn't been anything else that had gone on, and so -- right? That team, you can call it -- not -- rusty may be a little -- they hadn't done -- launched any new assays in 10 years. And so again, for them to come from that status to being able to launch in just a couple of months, develop a new-to-world assay, do a really complex clinical study on that and get EUA approval and make the impact that we're making now, we're really proud of that. And I think that speaks to some of that agility and the performance that we've got in our innovation process and systems that we've built over some time and that we're going to continue to get better at as we go forward, so.

Yes, I think that is a good transition to Patrick. And certainly, this is one of the big things I wanted to talk about today, was you're making such quick progress on launching all of these tests under some stress, right? So maybe we could talk a little bit about how you're able to do that, the agility that you have in the system that allowed you to achieve that and with some good accuracy in these tests. So Patrick, do you want to expand on that a little bit?

Sure, absolutely. Thanks, Matt. And also, thanks, Tom, for the very nice comments on our product launches, et cetera. As you said, we have a very robust pipeline. We promised a whole set of new launches at the beginning of the year. I think it was about 10 for Life Sciences. Out of those, we already have launched 90% of what we had promised at the beginning of the year. And on top of that, of course, we have all the correlated products that were not foreseen in beginning of the year that the R&D team could realize. And let me start -- when we talk about the COVID-19-related product, let me start with BD MAX. That was actually the first response we had in terms of diagnostic solutions to COVID-19. And as you know, probably, BD MAX is a fully integrated automated platform that performs nucleic acid extraction and real-time PCR, providing results for up to 24 samples across multiple syndromes. So it's -- we have a number of tests out there already on this platform. And it provides these results in less than 3 hours. The typical setup would be in a hospital lab where hospitals don't want to send samples into a central lab and then have to wait for days until they get the results back. This is a very fast turnaround. It's a very automated and flexible system, although it's fully automated. And I think one of the big benefits of BD MAX is that it's also -- it's what we call an open system, where the customer can use and -- it's on his own reagents, and it provides easy-to-use, automated solution for labs to perform user-defined protocols. And actually, as with the SARS outbreaks in China and Japan, many of our BD MAX systems have been used with customer-designed protocols, where they use their own PCR reagents. Before it even hit the U.S. -- SARS hit in the U.S., they used their own reagents there. We worked closely with the NMPA in China, the China FDA, et cetera. They used the systems in many applications. And this flexibility to use this open-system approach, of course, also enables partners to develop tests on this platform. And that's what we did. For example, in Europe. We worked with a partner there called CerTest. They developed COVID-19 assay on BD MAX. In the U.S., this open-platform approach enabled BioGX as a company to provide an assay. Under EUA, and we ourselves, of course, developed also an EUA assay. We, of course, followed all the FDA guidelines, so did by BioGX, and we were able, in a very short time, to bring, again, across the world, more than 3 assays out. And I think Tom mentioned that in the last earnings call, so far, we have sold more than -- in the third quarter, more than 3.5 million tests on BD MAX, COVID-related tests. It's -- again, it's both the automation piece but also the elegance of the open platform that gives you the flexibility to very quickly develop new assays on your own but also work with partners. So that's for the BD MAX...

Right. Patrick...

Yes. Okay. Go ahead, please.

Yes. Yes. No, sorry, I just was on mute there. So I was going to go next to -- Veritor is the big announcement recently. And clearly, with what we've seen in the flu market, you have a very strong position there, and there's a lot of value that people place around the quick turnaround. So I was hoping you could also talk about that. And your efforts to scale there are also pretty heroic. So maybe you could talk about that aspect of this, too, is you have to really hustle to scale things on the back end.

Yes. Okay. And then first, again, let me build on Tom's comment regarding the development time line we had for that assay. I think it was probably the fastest time ever that we brought an assay on this platform to market. And it required a lot of resources across the company. And what we did is actually -- it was a very open approach. We leveraged resources from across Life Sciences but also other parts of the company to make sure that we can realize this assay as quickly as possible. As you can imagine, it was a strong process in place in the beginning to search for the right antibodies, such as an antigen test. And to identify those, we worked very closely with our internal research institute, BDTI, on that as well and, in parallel, screened a lot of antibodies. And as we developed the assays, we brought in resources from BD Biosciences, who have background in monoclonal antibodies and antibody treatments, et cetera. And with that, we were able to bring this to market and in very close discussion and collaboration with the FDA make sure that we meet all the requirements there as we were applying for emergency use application here. We had a very broad field test, clinical trial, where we collected samples from more than 20 sites across the United States, more than 220 samples to make sure that we have a really solid representation of patients out there to make sure that we can demonstrate the performance and reliability of this platform. And we will -- of course, when we launched it early July, we said we will be -- we will scale up to about 10 million tests in Q3 -- in our last quarter here, fiscal quarter. That's all well on track. We have been scaling up on 2 different sites, manufacturing sites right now. The R&D teams helped in the beginning. We had an R&D -- a strong R&D prototyping pipeline for assay, but we very moved it quickly into a solid manufacturing environment. One internally, the one we use for our flu assays, scaled up very quickly for this COVID-19 test, and then we also worked with a different industry partner here who has a lot of background in this kind of lateral flow assays manufacturing. So from there, we are planning to be at a capacity of about 8 million tests per month by end of our fiscal year. That means by end of September. And if you follow the news as well, through additional investments, we will scale that up to about 12 million tests a month by end of February. So there's very strong demand for this test. The benefit of the test, of course, is clearly it's a very fast point-of-care test. Our device that we -- our reader that we use, the Veritor reader, is a very small handheld device. It's about the footprint of a cellphone. It's battery operated, so it's very mobile as well. The test itself is a very simple workflow, 4-step workflow, can be used in a CLIA-waived environment. And I would say it's probably the most simple workflow out there in terms of COVID-related testing. And it has been very well received. So at the moment, it's -- there's certainly no lack in demand. We are -- again, we are scaling up as quickly as possible. But of course, we put utmost scrunity (sic) [ scrutiny ] on the quality as we ramp up these tests and product testing before we release these tests.

Well, one of the things, Matt, is on -- is agility as you become a larger company. Agility has been a focus of ours, and it's one of our key mindsets that we're focused on, that we've been driving across the company. And this is a really great example where we saw -- I was envisioning at the end that there's got to be a movie made on this at the end of the day because, as Patrick said, in the midst of this, everything from every day, end of day we are going through, and people are -- you're looking for hundreds of antibodies. Where are they? Which universities? You're talking to governments around the world. Who's got these antibodies you're screening? At a center that we had set up within BD that we talked about before of looking for which ones could potentially give us the performance, when we find an antibody, we send out, at times, the BD plane to go pick it up and get it to our labs to save the day and shipping and making sure it was properly cared for along the way. Really, the team pulled out all the stops [ in the case ] of check in the morning, checking at night, all resources of the company. This isn't a Life Sciences only initiative. This is a companywide, all resources available to this team and all hands on deck is the approach that was taken. And I think we can see the impact of that. We're continuing that now and we [ hope, building it out ].

Yes. That's -- yes. And certainly, nice vote of confidence from the government with the big Veritor order to support the nursing home testing as well.

Sure. Thanks very much.

The other thing I wanted to ask just to follow up on this is, are there any things that could come as enhancements or additional tests, especially given that open architecture with BD MAX? I mean you had the serology test there in the beginning. And I think you talked about coming out with a second version, and it also made that acquisition for point-of-care platform. So could we see something on that front at some point?

Maybe I'll go first on -- okay. So first, I think, look, with the upcoming flu season, our focus definitely is on making sure that we get the right assays on both existing platforms on BD MAX as well as on Veritor, our -- you can imagine our R&D teams are already working on combined assays on BD MAX. It would be a combined respiratory assay to detect flu as well as COVID in one assay, simplify the workflow again there for end users. The same for Veritor. And I think there will be strong demand once the flu season hits, and there will be guidelines from the FDA that if somebody shows up with an ILI, or so-called influenza-like infection or indication, that they are getting tested for both, for flu as well for COVID. And we want to make sure that we have these solutions out there in time. Hopefully, the flu season doesn't come too early this year, but we want to be ready for that. And as I said, our teams are working on that. On the NATDx platform, on a molecular platform, that's probably too early for the season. I mean, when we acquired this company, it was a smaller company in San Diego. It's still very early stage. It's a very exciting next-generation point-of-care molecular test. But we will definitely -- we will not launch anything this year on that platform. It still takes time for us to develop the consumables [ for the assay ], et cetera, but don't expect anything in that platform this year.

Okay. Okay. And then what about, and Tom mentioned this before, the molecular system? He was pretty excited about the flexibility of that. Maybe you could add onto that and talk about how that launch is going for the high-throughput system.

Well we are very excited. We launched this product last year in Europe, and we are really excited about how our launch was going despite of COVID. And there has been a lot of demand, especially in Germany and France for this -- for our -- what we call the Onclarity molecular-based test genotyping for HPV. We're still in the so-called -- in the ramp phase. Again, we are very pleased of how that's going. The benefit of the system clearly is in the full automation, all the way from sample preparation to the final analysis, which is -- where the system definitely is different from many of our competitor systems. Where they have 2 different setups for sample prep first then analysis afterwards, this is all integrated. And as Tom highlighted, you basically put in your sample in a test tube, and it will -- everything is taken care of within the system. It's a walkaway system that can run up to 36 hours depending on the assay without any hands-on and processes all the samples automatically. So really, really excited about how that launch is going. We were actually a bit surprised that even during the COVID crisis that we saw solid demand. And we had our services team out there installing systems across several countries in Europe in the midst of the COVID crisis because there was such a strong demand.

And I'll just follow that up with you, Patrick. You mentioned that there were a number of launches slated for Life Sciences pre COVID. And I think you said before you had already delivered most of them. So do you want to highlight a couple of those for investors that you think are more meaningful and more important from the...

Absolutely, yes. I'm just focusing on the ones that we launched this year. So let me start with -- again, we talked about our COVID-19 diagnostic solutions. But let's talk about some other areas where we have already a longer-term investment like in the microbiology automation area before Kiestra platform. So this year, we added several new products. What we are doing right now with that platform is we are making -- we're modularizing it now. We make several own units there as well. So we launched, for example, the ReadA Compact solution, which automates incubation and digital imaging of prepared plate media. We also launched earlier this year in March the -- what we call the IdentifA solution, which automates bacterial colony picking and target plate spotting for MALDI identification. Again, it's all about -- in the microbiology workloads, it's all about the accuracy and the efficiency and the repeatability of the test. This is -- if you talk to customers who work with the Kiestra solution, they would never go back to a manual process. The efficiency and the precision they get out of these solutions is, I think, pretty unique. And again, our focus here was, over the last year, to make modular solution available to our customers so they can scale up over time instead of buying a total lab automation, which we provided years before and one which is also a larger capital investment. Then on the Life Sciences -- on the BD Biosciences side and the Life Sciences research side, we had a very strong focus on continuing to enhance our portfolio with our flow cytometry solutions and sorter solutions. Earlier this year, we launched our FACSymphony S6 sorter, 6-channels sorter, high-end sorter, high-end parameters solution, probably the broadest number of assays and parameters in the research platform out there, very, very competitive platform combined with our reagents and could be continued to build out. We also launched a number of new dyes, which provide further flexibility on the research side. And we also added on the low- or mid-range. Just a couple of months ago, we launched the BD FACSMelody 4-way sorting solution for an entry and midrange level. The solution -- a very elegant instrument that helps customer with cell sorting on the research and the clinical side. On the clinical flow cytometry side, again, for us, the focus is on enabling automation solution for our customers. We learned -- we enhanced our FACSDuet solution with more sample prep capabilities, we call them cocktailing capabilities within system just to make sure that our customers have the fully automated clinical workflows they need, focused on the -- probably on the lymphoma or leukemia workflows.

Super. Yes. So we've got a few minutes left. I thought maybe we would zoom back out and talk about a couple of other things. One of them is -- Tom, you mentioned from the opening remarks you've been recognized for providing a lot of innovation around connected care solutions with BD HealthSight. And so I thought that would be a good one to highlight as it does incorporate a lot of technologies, and it's on the leading edge of how workflows are changing with your hospital customers. Maybe you could just spend a minute on that.

Sure. When we developed kind of our medication management North Star at the time of [indiscernible]. But what we had recognized is that, like we think about our manufacturing processes, which are very much end to end, and we have whole teams in every one of our plants who are looking through and saying, where can there be a quality gap created? Where can there be a waste in labor or production? Where can there be increased scrap added? And where are the breakdowns in that? And we very actively go eliminate those, right, and make it efficient. And we're really, really good at that from a production perspective, and it's in our DNA. We think about that, ultimately, the process of securing medications, inventorying them, preparing them for the right patients, the right doses, getting those safely delivered to the patient with infusions, particularly in consumables there and then -- and dispensing them on the floor and then right on through to making sure that, that data is captured properly and that you have the analytics to look at the overall process effectiveness of that whole end-to-end process, but that had been a big gap in medication management. People were using one-off solutions and didn't really have visibility as clinicians to the whole data set and -- like, pharmacy was doing part of it, nurses doing part of it, maybe someone else doing another part of it. So our HealthSight informatics platform was really built to help address and enable an enterprise-wide integration medication management system and really starting with an individual hospital. But then with even things like Pyxis ES enabling you to do it across an IDN and someone sitting at an IDN level, look at it across their hospitals. If they have 100 hospitals, say, how are my hospitals doing differentially on safety metrics, on quality metrics, on efficiency metrics and savings metrics, and our platforms help them do that. And we give them the analytics and the informatics that pull data from all of our different systems along that stream that we've assembled from laboratory -- from the pharmacy inventory management systems, our Pyxis logistics right on through the dispensing system, Pyxis right on through to the pumps and other products. And so a good example of that would be our HealthSight diversion analytics platform, which uses data from our Pyxis logistics in the pharmacy or IV prep for compounding in the pharmacy or -- and/or Pyxis ES and, in the future, Alaris platforms. And it -- again, we developed that with Microsoft. It uses advanced artificial intelligence to help watch who could be potentially diverting narcotic drugs in the health care system, something that would be very hard -- is very, very hard to do if you just try to go manually look at the data. But when you have an overarching umbrella like HealthSight that's pulling that data and feeding it into a central tool that's utilizing AI, we can do it quite well. We built similar HealthSight applications now using data across our product portfolio to do other areas as well to improve medication safety, to simplify workflow and drive efficiencies. And so that's part of -- like you heard Patrick talk about the example of Kiestra moving from manual microbiology, individual stand-alone products to a technology solution, we really view our approach there of using informatics and medication management as doing the same, right, from stand-alone products to really ecosystem of technology solutions that help give a differential outcome for our customers. And we're continuing to invest in doing that in other areas as well, right? It's what was behind our FlowJo acquisition, for example, in BDB, in flow cytometry, is a good example of that; the Synapsys software solution that we've invested in and launched the initial versions of, more in the pipeline, in IDS. And we've actually just started launching a series of more intelligent products in the legacy Bard business, right? We talked about the next-generation Arctic Sun, which is the first product that actually uses some of the electronic medical record interoperability for MMS. We've leveraged that and have put that into the Arctic Sun product so that it can be much more easily interconnected to the electronic medical record to give a number of advantages there, and we're looking to do the same thing in a number of other BDI spaces. So it's certainly a core focus of ours. Matt, you still there? On mute?

Yes. Sorry. So then almost out of time. I want to ask you one last one. The last couple of years, you've talked about local-for-local innovation and products. And I was hoping you could talk about the importance of that initiative in China, specifically? And what kind of products are we talking about there?

Yes. So back to the -- one of our core strategies, which is -- and focuses, goals is that consistent, durable growth. Part of that comes through leveraging our global footprint to expand and deepen our presence internationally. And certainly, China is right at the top of that list. We've got a global organization with about 40,000 associates, 50 countries. 45% of our FY '19 revenue is outside the U.S. So really, we're -- again, we're focused on in China, leveraging strong channels to bring the right solutions to the right markets. And sometimes, that's -- we've been very focused on driving Bard products into new geographies. A good example of that, just next door to China, would be in Japan, where this year, we launched a very customized product for the Japan market. Lutonix balloon that is -- it's called over-the-wire. It's a local practice that's used predominantly in Japan. We developed this product customized for Japan, and we're really pleased where we've been able to gain north of 50% market share in just a few short quarters in that space because it's so well-tailored. And in terms of specific products in our pipeline for China, we haven't disclosed that, I don't believe. But we do expect to launch more than 10 products developed and manufactured in China for China over the next 3 years. And the other thing is we are opening up our fourth manufacturing facility in the country, forthcoming. So we continue to invest in both production in China for China, almost all the -- most production that we do in China is consumed in China. And the same is true as we came together with Bard, actually. We've each had an R&D center. We ended up creating one integrated BD R&D center and, again, made the right trade-offs where the best investments we could make, cut some projects, doubled down on investments on -- in others. And that's now fueling that outlook for those product launches I mentioned.

Great. Well I think that's a good place to end. I just want to thank you so much for spending the time with us today and for this great virtual walk through Becton's innovation strategy and a lot of the key projects and product. It's been fantastic to have sort of the zoom in, zoom out with Tom and Patrick on the phone. So thank you, gentlemen, for your time, and really appreciate it. It seems like a very exciting time and certainly appreciate all the work you're doing. It's been very fantastic to watch, and I can't wait to see the movie that comes out.

Yes. Thanks, Matt. It's always great to connect. So everybody, be safe.

Yes. Thanks, Matt. Take care, everybody.

All right. Thank you. Take care, guys. Bye.