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

Okay. Thanks, everyone, for joining us this morning. We're kicking off day 2 of our HealthCONx conference with Becton, Dickinson, a favorite company of mine. I cover devices and life sciences, I don't find too many companies that wearing that [ cross hat ], BD happens to be one of them. So representing the company, we have CEO, Tom Polen; CFO, Chris Reidy. And from Interventional, we have Simon Campion; and Dave Hickey from Life Sciences. So gentlemen, thanks so much for participating this morning. And before I forget, we do have, I think in the background, Kristen Stewart. Kristen, this must be a deja vu for you doing this from the other side. But I think you had some opening comments to make, so maybe I'll let you start off, and then we can get into Q&A.

Thanks, Vijay. So this is my new fun thing to do at these conferences, reading the disclaimers. So today's presentation, we will be making some forward-looking statements, and it is possible that actual results could differ from our expectations. In particular, there continues to be significant uncertainty around the duration and contemplated impact of the COVID-19 pandemic. Risks, uncertainties and other factors that could cause such differences can be found in our recent SEC filings, including our 2020 Form 10-K and subsequent Form 10-Q. Also, the statements made in this presentation were as of today's date. BD undertakes no responsibility to update any such statements to reflect events or circumstances occurring after today's date. With that, I'll turn it back over to you, Vijay.

Thank you, Kristen. So Tom, maybe to kick things off, a big-picture question for you. I mean, when you look back at the last few years, it's been quite a transformation for BD, back-to-back large, transformative deals. And the last 10 months have been now, as a CEO, how has your perspective changed when you made the transition to the C suite? And it hasn't been an easy transition for you, dealing with Aleris and a pandemic to boot. So maybe some perspectives on what's changed over the last 10 months for you, I think, will be a helpful starting point.

Sure. Thanks, Vijay. Obviously great to be here this morning. Great to see you again today, as always. So you're right, it's been quite a first 10 months. But standing where we are today, what I can say is that we see tremendous progress and have moved the company from being in a position of defense, I'd say, as the first pandemic wave struck, to now being much better in a position of offense as we look forward. And so the first priority from week 1, as you mentioned, has been to remediate Alaris and get that fully back. And we've taken capabilities to build -- we've taken actions to build capabilities in that business and the corporate level to help move that forward. We've been laser-focused on advancing the 510(k) submission. And our engagement with the FDA, and today, I feel very confident about the 510(k) submission remaining on track to our Q2 or early Q3 timing. We're also very, very focused, I think, doing a very strong job of serving and supporting our customers who remain committed to the very strong value of Alaris overall. I think the other couple of things that we did was, very early on, we took action to strengthen the, balance sheet, right? And so -- but that was done so we could best navigate a whole range of different potential pandemic scenarios, many of which, right, are still -- there's no one path forward for the world. And so we've looked at different scenarios into how do we make sure we're in the strongest position for any of those scenarios? And be able to continue to execute our growth strategy to position the company best for long-term value. And so in that same spirit, as we strengthened our balance sheet, we also initiated some systematic actions to renew our focus on cash as I came in the role, both our cash flow and our free cash flow conversions. You saw the benefits of that in FY '20 start, and you're going to continue to see those benefits in the progress. This year, you're going to see progress in both of those. You're going to continue to see it in the future as we continue to take actions around our inventories, accounts payable, below-the-line expenses and capital deployment as those actions are paying off. And because of those, right, over that period of time, we've moved our balance sheet to a much stronger place today than many months ago, right? We're at 3x net leverage today. And very, very soon, we'll break into the 2s from that perspective. I think a couple of other things is that when the pandemic struck, our team stepped up and took what I think were tremendous actions to help our customers and the world respond. I mean, at the end of the day, quite frankly, it's situations like this that BD is built to make an impact on. And I think we saw our organization rise to the challenge of exactly that. Whether or not it was ramping up production of COVID treatment-related treatment products to help the ICU serve patients, things like catheters, PICCS. Or keeping associates safe, remember, 2/3 of our associates having stopped coming in the office, they don't stop coming into our manufacturing plants or coming in our distribution centers or going in and servicing instruments in the field. We're really focused on keeping -- we kept all 95 of our plants up and running this entire time, making sure that the critical-to-COVID products are out there. Of course, we developed a range of both molecular and point-of-care diagnostic products in record time. We were 1 of, I think, the first 2 companies with a point-of-care antigen test, as an example. And then we've been scaling those pretty -- quite significantly and ramping up production of not only the diagnostic test, but of 1 billion additional vaccine delivery devices to support the vaccination campaign. So I'm really proud of how our team has responded and contributed to the world's response to the pandemic. And of course, we're taking even more actions going forward, whether or not that's adding more COVID testing capacity, which you know we're in the process of doing. You saw the press release this morning on adding more prefilled capacity to support future, right, transition of the vaccine into that format. Continuing to add more hypodermic capacity or advancing new innovations in our pipeline like our combination flu and COVID assay. I think maybe just to wrap up that concept as well is, is that we've been using those actions to fuel our strategy and build momentum in '21. And kind of -- that's a bit of how I see our posture here today, right? we started the Growth and Innovation Fund. Also last quarter, we deployed the first tranche of investment behind more than a dozen new innovation programs across the company. We started reinvesting a portion of the COVID diagnostic profits back into the business to accelerate the vision that I had laid out to drive our strategies around growth and simplification and empowerment. And we can talk more about the specifics on that later on. And we're supplementing those organic and internal investments with what I'll call inorganic innovation initiatives with an increased focus in tuck-in M&A. You saw us, particularly in the back half of '20, we closed 6 tuck-in M&A deals that added new innovations in higher-growth spaces that were highly aligned with our strategy. First 2 months of FY '21, we closed 2 tuck-in M&A deals so far, in October and November, both accretive, both strategically aligned, both in higher-growth spaces, just as we said we would. And we continue to have momentum in that funnel to execute our strategy as we look forward. We also launched Project Recode in the last 10 months, significant -- really simplifying the company's footprint, our portfolio, our processes and drive future operating margin expansion. And we've been investing behind that. We're actually accelerating some of those investments with some of those diagnostic proceeds. And that's progressing very well and I'd say you can probably feel the momentum on that in the organization. And the last thing I'd comment on is you've seen me actively evolving our capabilities and our leadership in important areas that, as we think about our BD 2025 strategy, making sure that we have the right talent and skill sets to be able to fulfill that over the next several years. And I feel really good about that progress and where that's been going as well. So thanks for the starter question.

No, that's -- those are helpful comments. And maybe switching from big picture to more topical near-term. Second wave has been -- it's come up in quite a bit of conversations. I know when you guys gave the guidance, you had assumed some sequential improvements in procedure trends. I'm curious to hear, has the current second wave changed any dynamics for you guys when you think about the near-term progression?

So that's Chris.

Sure. Vijay. And when we gave guidance at the beginning of the year, we talked about the fact that health care systems appeared to be in better position to handle COVID and non-COVID patients. And the treatment protocols were better than they had been in April and May. And that appears to be proving out. So through November, we haven't seen any impact on procedure volumes. And we're very comfortable that the quarter is playing out well, and we feel good about the base business. And those procedure volumes and the way health care systems are handling patients is true around the world. We're seeing it not only in the U.S., but we're seeing it in Europe and Asia as well. So so far through November, we feel good about procedure volumes. Obviously, it's a fluid situation. We keep our eye on it. We still have the month of December to go before we close the quarter. But right now, where we stand, we're feeling very good.

That's great to hear, Chris. And some of your peers have made similar comments in terms of hospital systems being better prepared. And that's very consistent, what we've heard. Switching gears, Tom, to vaccine. I mean, I saw the press release this morning. And I think I did a little -- I did a cartwheel. I thought this is -- it was interesting. How -- I guess, let's start with the assumptions around the vaccine opportunity for BD. I think you had sort of characterize it this $100 million to $150 million opportunity over the next 12 to 18 months. Now that we have the vaccine data, AstraZeneca is out, does that change your view at all in terms of the syringe opportunity for BD?

It doesn't specifically. We've got a pretty unique, as you know, view across the health care value chain because we see what's happening in discovery; we see what's happening on the pharma side; we see what's happening, obviously, on the provider side, and we use that and we build our assumptions. And so honestly, what's happening with the vaccine right now is not different from our assumptions. We had confidence in Pfizer and we had confidence in these other partners as well, that they are very good at what they do, and we thought that they would come out with a strong, performing vaccine in about this time frame as we saw. So -- but we don't see that changing. Maybe what I can say is today, on our earnings call, we said we had a commitment for 800 million devices. We're now up to a little over 900 million devices fully committed for. As we think about, then we said we could produce 1 billion. And these are hypodermic devices, right, this excludes the prefills, always has. We said 1 billion over the next 12 to 18 months. Obviously, we get questions, okay, you're at 900 million now. You're almost at what you said you can produce. What if the world needs more? How can BD support it? And we recognize that. So we are looking at CI initiatives within our manufacturing plants. We do have some additional capacity investments that have been made that are going to come online late in this fiscal year. And so I would just say that, for now, we're still very comfortable at that $100 to $150 million range. And we are looking at opportunities to be able to go above the billion units, but on the back half of that 12 to 18 month window. So less impact in '21, more of an opportunity for '22. That also probably correlates with -- as the vaccine campaigns ramp up around the world. But we're doing everything we can to look at going above that $1 billion -- 1 billion unit level in that 12- to 18-month horizon as well.

Yes, absolutely. And the more I've read about these vaccines, I mean, the logistics are -- it's challenging. So I'm glad BD is part of the solution set. Now relative to the $1.2 billion investment BD announced this morning in prefilled syringes. Is that related to the vaccine opportunity, Tom? Or perhaps is that incremental? Or how should we think about these investment in Europe?

Sure. It's a little bit of both. So maybe just step back and look at our Pharmaceutical Systems business. It's been, perhaps if not the fastest-growing, one of the fastest-growing businesses in the company over the last couple of years. Grew over 8% in FY '19, grew over 9% in FY '20. Continued strong momentum into '21, and we see strong momentum for the next several years regardless of the COVID vaccine. And what's happening there is we've been driving continued innovation in that business as new biologics are coming to market, right? They're moving into prefillables. We have a strong self-injection business that we've been building over the last several years. We've got at least 2 new device technologies, a wearable patch injector and a wearable infusion device, that are coming to market as well. We see strong demand, and it's helping fuel that growth. And so what you saw, the announcement this morning is really twofold. One, it's a capacity investment to continue that momentum in the business that we see around biologics and our base business. And then you also see us putting in capacity, because eventually, vaccines, like a COVID vaccine, we believe will end up converting like flu has, a portion of that could convert into a prefillable device. We want to make sure that we have the capacity to support our pharmaceutical customers in that as we're by far the preferred provider of those types of technologies to most every major pharma company. So those -- that will create some capacity for us to be able to respond and provide prefillable solutions over the next many years to a COVID vaccine.

And on the topic, Tom, the new investment, can you put some numbers around what the new capacity would be for you guys in PFS? And you mentioned biologics, the cell and gene therapy has been coming up a lot in conversations. Are we now perhaps at an inflection point? because I do see it in some of your tools peers, those end markets have accelerated. It looks like those opportunities should get into the clinic at some point, post approvals. How should we think about cell and gene therapy opportunity for BD?

Yes. We haven't put a volume number around it, probably for competitive reasons. The investment announcement that we made this morning, we did say, I think we did disclose some 350 million of units that we've already invested in over the last 2 years. The forward-looking investment, we didn't disclose the exact capacity add there. And again, that capacity will be added. The same lines that you're making biologic devices in are not the same lines that you make vaccine devices in, which are not the same lines you make self-injection devices in. And so we don't want to break out the tranches of where those capacity expansions are going for competitive reasons. But obviously, we're adding capacity across all of those 3 areas as part of our growth strategy, continuing the strong performance in that business. Cell and gene therapy. I mean we've been on the cutting edge of -- if you look at who's winning kind of the Nobel prizes in the research space there and who's really leading advances, we've been really proud, one of the things our BDB business has been most proud of is the fact they've been right side-by-side with self-sorting technologies, which we're by far the leader in, have been an important part of that. We'll continue to be an important part of that research, and we've got some exciting new innovations in our pipeline, like our next-generation flow cytometer called Mosaic that will be coming out in the next few years that will further add value in that category of research around cell and gene therapy. now how it ends up translating into the devices that it will be delivered in, I think that's still to evolve further for us at this point.

Those are helpful comments, Tom. And I guess switching gears, I mean, post the vaccine data, we've had 90% to 95% efficacy. A lot of questions around sustainability of diagnostic testing. Maybe at high level, the Veritor guidance that you guys had, $1 billion to $1.5 billion for fiscal '21, have your views changed at all on those ranges post some of the vaccine numbers we've seen? I mean, for context, some of your peers, it looks like diagnostics is really strong right now. But I'm curious to hear on what you guys are seeing.

Let me start off, and then I'll turn it to Dave Hickey, who is, of course, our new Leader of our Life Science segment. We got the expert on the phone, so let's -- we'll turn to Dave in a second. But let me just start by saying we certainly continue to feel very confident in that $1 billion to $1.5 billion range for diagnostics. Again, we think we have the right insights into the market and the right assumptions. We've always said we expect that to be first half-weighted, and that's right in line with the comments that you made. We continue to see very strong demand, exceeding our supply at this point in time. And again, I'll turn it to Dave to share some more insights there.

Yes. Thank you, Tom. And Vijay, thank you for the question. So really, I mean, just to build upon what Tom has said. I think that demand is definitely there. I mean, as you saw, we've got the first EUA in the United States for the Veritor platform. And of course, since that, we've continued to expand around the world. And that sort of interest in the technology, both for Veritor and MAX, continues. And actually I would say, in both the traditional clinical accounts and the acute sort of testing segments as well as the nontraditional accounts, that did start in the United States. And then we're very fortunate to get the CE Mark on the Veritor assay. And since signing, thus the EMA, we've signed large contracts with governments in The Netherlands, within Canada. And based on the supply and demand situation right now, we didn't -- and it's great to see the progress with the vaccines, of course. But we really don't anticipating that changing any of our confidence in meeting our fiscal '21 goals.

And just maybe on that topic, Dave, volume and pricing, I think. Can you just remind us on what the capacity is right now? And I think, Tom, you mentioned expanding capacity in Veritor. Where do you think you could end up on the capacity front? And I'm curious, has pricing still been stable? Because I know that was one of the key variables in that $1 billion to $1.5 billion guidance for Veritor.

Why don't we let Chris comment on pricing and then turn it over to Dave on capacity and then how that expansion plan is going.

Sure. So on pricing, you'll recall, when we were talking about fourth quarter of last year, we said that use $20 as a good proxy, and we came in a bit better than that. And as we were talking about this year, we said, we think $20 is a good proxy to use, but you would expect that to deteriorate over the course of the year. I would say that $20 is holding up well to date in this quarter. In fact, a little bit better. So the demand is certainly there, and we haven't seen any deterioration in price at this point.

So we're doing a little bit better, than.

So we're doing a little bit better than that original $20.

Yes. And Vijay, from a capacity perspective, I mean, the teams are very focused on increasing capacity, supply distribution for both Veritor and the BD MAX molecular test. A lot of diligent effort going on there. And we're right on the plans that we've previously communicated. So when we started, we were at 8 million on Veritor. We're at 8 million tests per month right now. We expect that to increase to 12 million tests per month as we get into around the March '21 time frame. Switching to MAX on the molecular side. Again, we're at about 1 million tests a month right now. And I expect that capacity to increase to about 1.9 million tests a month as we get to January of 2021. We continue to look at sort of options to just continue to optimize that. And of course, as that changes, we'll just communicate that news on capacity increase.

I would just add, you'll recall in the fourth quarter, we said we were going to scale to that 2 million a month, and we actually were able to scale quicker than we had originally anticipated, which was why we overachieved on Veritor in the fourth quarter.

That's great to hear. I mean, for what it's worth, I think, we had a call with JetBlue management. I mean, airlines are looking at point of care. I would love to see Veritor at those airline counters, enabling families to visit near and dear ones over the holiday season. But it's interesting, the plans that some of these airlines are coming up. But...

It is in the number of airlines already, people using Veritor. Vijay, If you want to take a trip to Hawaii, I think anyone landing in Hawaii, I think, got -- was tested. [ So the ] airlines and many other locations that are using it, so I think...

Somehow, I feel my Director of Research wouldn't be happy if I was in Hawaii right now, Tom. But I wouldn't complain. Maybe on the diagnostics. Sustainability has been a huge topic, it's been a question. And I think modeling when the deceleration happens and how are companies positioned to handle the deceleration. For now, it feels like '21 is playing out, demand is strong. But when you think about -- and perhaps, there's a little bit of guessing, but '22, how do you see demand sort of playing out? And how is BD positioned to handle perhaps some dropoff in fiscal '22?

Yes. Maybe let me start by making a quick comment, turning it to Dave on -- to comment on things that we're doing to continue to build out Veritor. And then maybe Chris, any further comments to wrap things up. So first off, I had made a comment, I believe, on our last quarterly earnings call that we did feel and sense, over the last quarter or so, higher confidence that there will be a continued level of testing into '22. If you had asked me that kind of 6 months ago, much less certain around that questions. I think as we're seeing information come out around the percentage of people, 42% of Americans, for example, saying they're not willing to get the COVID vaccine when it's first available, the timing that the vaccine will be available at scale. The fact that a number of institutions, be it airlines or others, are starting that testing. Once you start it, when do you stop it, right? It's about the comfort level of getting people back into society and back opening up businesses. I think there's going to be a benefit of keeping that testing in place a bit longer to drive that comfort level, to get back to normal, even as the vaccine campaign is happening. So I don't think it would be at the same level necessarily at '20 -- as '21, that will certainly play out. But we do feel that there will be some level of ongoing testing into '22. I think we're taking a number of actions, looking at not only how do we strengthen? We feel really good about the quality of our test, and we're investing quite significantly behind how we demonstrate that as well as other uses or applications or claims for it. And so maybe, Dave, just if you can comment a little bit on that.

Yes. For sure, Tom. So to reiterate, I mean, we absolutely see continuity of COVID diagnostic testing for both point-of-care and molecular. I think that the effort that we're putting into really understanding the science and sort of additional claims for the utility of these tests is very important. We literally just, for example, completed and published a head-to-head study of the rapid point-of-care antigen test versus sort of gold standard of viral culture. And that could potentially help inform sort of the use of these diagnostics for infectiousness and for asymptomatics. So I think looking at additional claims for these types of technology that would then potentially become available in '22 and beyond is something that we're very focused on. When you look at the sort of unmet needs in the marketplace, how people think about very decentralized testing, over-the-counter testing, home testing, all those are areas that we're looking to explore around the potential utility of something like the BD Veritor.

That's a really interesting comment, Dave. How can BD participate in the at-home testing market?

So I think we've got to understand the guidance and the performance of the test. I think if you look at -- we've obviously got certain claims right now around the Veritor for asymptomatic population. But when you look at some of the movements that have been made here in the United States around licensed facilities and approved facilities to testing congregate settings or high-risk settings, we're just looking to understand that better, looking to understand the performance of what the test would need to look like to be successfully deployed in those areas, and then look to see what we would need to do to make sure that our technology would match up to that setting.

And would this be, the at-home testing, an OTC test? As in I can get the test without a prescription?

So we would still need to determine that. That is not clear at this stage.

I'd say, as Dave mentioned, it's an area that we're -- we'd say we're actively exploring.

And Tom, the other team that's come up for some of your peers has been this massive installed base, right, when you think about the MAX, Veritors. And in a post-pandemic world, how do you think that increased installed base helps BD? What kind of test do you envision being performed on this higher installed base post pandemic?

We -- again, Dave can comment on that. And probably, we won't disclose the specific assays. But we did allude -- we did share that we are putting in an additional menu into the pipeline now. Obviously, Dave has been leading all of that. So Dave?

Yes. Thank you, Tom. Yes, Vijay, I mean, I think as we've said in the November release, we sort of doubled the BD Veritor installed base as we got to the end of the fiscal year. We expect that installed base for Veritor and BD MAX to grow over the course of '21. So it really is about how do we leverage that installed base with new menu? Obviously, as a company whose primary focus is on infectious disease, where we have solid menu today, leveraging that installed base with new menu in the infectious disease area, potentially others, will be a goal. So we're looking again right now to just basically look at what is the right type of menu that could go on BD Veritor and BD MAX. And then obviously, as we make those menu decisions, we'll communicate that in further updates.

Understood. And Tom, maybe switching over to Alaris. I think you mentioned you're increasingly more comfortable, confident on the submission time lines. Maybe just remind us on what the version or time line were. And given that BD will be out of market now for almost 18 months, is there any risk of share losses in this market on the pump side?

Yes. Obviously, our time line is that, again, we feel confident in -- remain Q2, early Q3 for 510(k) submission. I wouldn't use the term that we're out of the loop. 70% of all infusions in the U.S., right, for all types of patients, are happening with the Alaris pump. And we continue to support those customers very much, right, in both as they need additional pumps to add to their fleet for medical necessity to treat COVID patients. We've had, right, over 1,000 hospitals add to their fleet. That continues. Of course, during this resurgence, we are seeing solid demand for infusion -- additional infusion pumps under medical necessity because of the resurgence. I will comment on that. And we continue to see, right, customers are very clear on the value that Alaris holds. It's not by accident, but 70% of people are using the product. There's Very clear advantages to the technology, not only as a stand-alone infusion platform, but how it connects in with our HealthSight platform and the broader end-to-end medication management solution. And so we feel good about our installed base, and then we're very, very focused on getting that 510(k) submission in, getting it eventually cleared and then fully back to being able to support our customers, not under medical necessity, but under a routine 510(k) approval. As we've always said, right, our focus is not on rushing that to market, which is why we took that extra time to get to Q2, early Q3. And make sure that we're having those ongoing dialogue with the FDA, getting feedback on our testing plans, which we've done, getting that testing done right, getting the submission done right. Because ultimately, it's about making sure that we get as timely of an approval as possible. And it takes us -- took us a little bit longer to get to that Q2, early Q3 submission in, but the right submission, so that we make it easy for the FDA to be able to review that and it's of no surprises and there's high alignment when that happens. That's always been the best approach, and that's been the approach that we take.

; And Vijay, just to make sure we already understand this. And that fiscal Q2, Q3. So just to make sure there's no change in the time line there. So we're obviously coming to the end of our fiscal Q1. So that's not too far away. So obviously, the confidence around the timing is also due to the proximity as well.

It always causes issues at my household, because even with my [ wife, am I talking BD fiscal quarter? ] always need to translate.

Ready in '21.

Yes.

And I'm starting to do it in my household, so it's helping me keep the note.

Thanks for the comments, Kristen. The -- I mean, you've been in this seat. And it -- I can see no downside in reaffirming, reiterating. So thanks for the comment. Tom, maybe one other question on Alaris-related. So we're I think the guidance assumed no revenues in fiscal '21. We're assuming some revenues in fiscal '22. I think this was an annualized $400 million-ish kind of business. Should we be assuming a full run rate once the product comes back in fiscal '22? Or how should we be -- is there any pent-up/catch-up demand? Or how should we think about fiscal '22 for Alaris?

Yes. I don't want to get out ahead of ourselves on that, Vijay. As you mentioned, we assumed -- we do have a base level of medical necessity demand assumed in '21. As you mentioned, we don't have kind of 510(k) approval assumed in our '21. We assume that more in '22. I think depending on how much demand comes in due to medical necessity during this resurgence, right, that could influence. Again, we did provide quite a bit of pumps under medical necessity during the last resurgence that happened. We are seeing some uptake in demand during this resurgence. I think let's let the next part of this year play out and understand then how much pent-up demand actually occurs in '21 to inform how we think about '22. But certainly, we look very much forward to getting that 510(k) eventually approved and getting back to a more normalized approach to business...

I would just say it wouldn't be prudent at this time to assume a full year of Alaris in '22 either. And we'll let that play out. But at this point, I wouldn't assume it's a full year. Yes.

Our team is fully focused on getting the submission made. And we're going to focus on it.

Makes complete sense. And maybe switching gears to Interventional. I know -- Simon, if you were thinking I would let you off, I know you can't get off that easily. But you made a couple of acquisitions in that part of the business. Straub Medical, got you got into atherectomy, you got into automated urine output measurement. I mean, those are markets I'm not familiar with. How big are these markets? And what does those acquisitions mean to BD, I guess, from a revenue perspective?

Well, starting with the atherectomy and thrombectomy market, that's actually the biggest segment the peripheral space. And we didn't play it. As part of Bard and the early days of BD, we did not play in that segment despite our wishes to do so. So we're grateful for the opportunity now since that acquisition occurred back in the April, May time frame. I think it's significant for a number of reasons. Number one, both devices have approval in Europe, and there's a decent revenue stream over there. Both devices have approval in China, and there's a reasonable revenue stream over there and a nice investment plan that we're evaluating right now. And today, the Rotarex, the atherectomy device, is approved in the U.S., and we would expect -- or clearance, rather. And we would expect clearance for the thrombectomy side in the not-too-distant future as well. So given our footprint in the peripheral space in the U.S., we certainly think we can -- we have a good runway here, particularly with our leading products in all the other categories, including PTA and DCB, stents and stent graft. So we're pretty excited about it. And the team has been fully trained and are locked and loaded and are already out there making revenue with this device. And honestly, reimbursement for atherectomy is quite attractive in the [ new bills ], in the U.S. With respect to the kilo -- or the acquisition of Adaptec Medical, we -- UCC has been a long-time leader within the acute urology space, but it was very much a stand-alone product. It was a product leadership position. And now as we evolve into category leadership and connected solutions now, we see automatic urine output as the first step on that continuum. And we look at fluid management, how can we manage the fluid balance of a patient? And obviously, BD has a leading role with respect to pumps, UCC has a leading role with respect to Foley catheters. So we can foresee a time where there is a closed-loop system to manage the fluid balance of patients at every ICU bed in the country and maybe even globally at some point. So it's a market development exercise, I would say. Tom mentioned the growth initiative funding earlier on. We have submitted a request there, and it's been funded, to begin to look at all the mechanics around fluid balance from a clinical perspective. And we. would look to begin to realize some of those thoughts and dreams in the coming years ahead.

I would just add, Vijay, that you would -- these are perfect examples of tuck-in M&A in the traditional sense of singles and doubles. It's a lot of those that get us to the growth rate and drive the sustainable, durable growth. So these are good examples of that.

And they are right in line with our strategy, are accretive and really leverage our current assets in a positive way. And in these cases and in every case when we're looking at tuck-ins, are in higher-growth market segments for us as well.

And Vijay, if you cover the legacy Bard business, what we did and what we continue to do is make these small tuck-in technological acquisitions and then iterate at a very fast pace. And so if you were to look at many of the acquisitions we've done in all of our businesses, you would see a core product or technology. And then over the next 4, 5, 6 years, several new incremental iterations coming up that support and extend the utilization of those devices. So we don't make single product plays, we make platform plays.

Absolutely. That makes sense. And Tom, on the topic of innovation. I think historically, investors have struggled to understand what is new and exciting for BD. Because I think a couple of examples which come to investor minds is the patch pump which was put on pause. When you think about the medium term, is there anything exciting from a new product perspective? Or maybe broadly talk about innovation for BD.

Sure. I mean, Simon and Dave can talk all day about the products they're excited about in their pipelines, I guarantee you that. Maybe let me just make a couple of comments to start, and then I will turn it over to Simon and Dave to just share some things that they're most excited about in their portfolios. But at a high level, first off, the patch pump is still progressing in our pipeline, right? We perfectly are not commenting on that. We will eventually as it gets to the next level. It's progressing well. And we had shared we took a different tack though after the last challenge there. And you've seen other folks have had challenges. Those things aren't simple to get to market. I mean, what we recognized was we were not going to do this alone, we're going to go get some partners who know this space better than we do. And that's exactly what we did, and that's exactly how that product is progressing in the pipeline. And we're glad we did that, progressing much, much better now under that model. If you look at overall for the company, of course, one of the things we also hear, Vijay, is BD's this big, complex company. You can't point to kind of a one blockbuster drug that's going to drive the future. It's these singles and doubles. So maybe let me just frame a couple. There's probably 3 major categories, though, of innovation themes, I'd say, that we're investing across all 9 of our businesses. And the first is, right, if you look, all of our business are investing behind smart devices, automation and informatics. Again, we're investing in that across all of our businesses, whether it has to improve treatment decisions or to make clinical processes safer, simpler and more efficient. But smart devices, automation, informatics is a clear area of focus and innovation for us across all of our businesses. You've heard an example from Simon, right, as BDI is looking to take Foleys, make these smart devices and connect them in through informatics now and the future with our other technologies and HealthSight. Second category where we're really focusing our innovation's in our solutions that enable the shift to the nonacute and home care. And we're looking at, right -- we're when making those investments to drive that shift across diagnostics and diagnosis, right? You heard Dave. Obviously, point-of-care is a great example of that and how we think about expanding that. Medication management, we're bringing in. You saw us just announce one of the acquisitions we did so far this year, was buy the leader in long-term care medication management with a nice cloud-based platform. We're excited about that opportunity, how that adds right into that strategy. Drug delivery, minimally invasive surgery and home care are all areas that we're focused on in driving that shift to nonacute and home. And then the last area of where you see us making innovation investments in and across the company are innovations that meaningfully reduce the burden of chronic disease through novel device technologies and algorithms. And you see examples of that, whether or not that's our self-injection business that you've heard us talk about that's enabling new biologics deliveries. And we have a whole range of different self-injection device technologies that are on market and in development there, as an example, like the patch injector or patch infusion system I mentioned that are pipeline products; or new innovations that Simon has to do things like treating cancer or end-stage renal disease or peripheral vascular disease. But with -- and so you got the 2 leaders of 2 of our key segments here. I mentioned a couple of the ones in BD Medical since Alberto's not here with us today. But maybe Dave and then Simon, with products we feel the most excited about.

Yes. Thank you, Tom. So I mean, in the theme of automation and informatics, Vijay, I think of -- we had tremendous success in fiscal '20 with the launch of our high-throughput molecular BD COR platform, which runs the HPV, the BD Onclarity primary screen HPV assay. Excited that, that will be coming to the U.S. market in 2021. We have new modules for BD Kiestra. How do you link and aggregate all that data when you watch the COVID and the pandemic, the dialogue around test and trace. BD Synapsys is our informatics platform to connect all these solutions, to give sort of ready access to the data, is seeing significant investment from us. Tom had already mentioned on the BDB side, next-generation flow cytometry with the Mosaiq platform. And then maybe Chris mentioned the sort of small tuck-in M&A earlier in calendar '20 when we acquired NATDx, which is a small point-of-care molecular platform. One of the goals here is, how can we be a real enabler of molecular testing, whether that testing is done at high-volume centralized testing, BD COR; in the acute setting, with something like BD MAX; or decentralized at that point of care with NATDx. So to be relevant across that whole molecular spectrum, some of the key names of the portfolio that we're working on right now.

Yes. And from our side, Vijay, obviously, our portfolio is replete of launches next year, from first phase into certain subsets of the biopsy market, the oncology market, continued penetration of the robotic hernia market as well with some innovation there. Chronic total occlusions, next-generation technology there for peripheral. We mentioned the launch of Adaptec Medical and all night gearing up. But we also have continued work to do in accelerating the commercialization of PureWick in our UCC business, which has been a tremendous success for us over the past 2 years; continued penetration with Straub; and also with WavelinQ, which is coming up on its second anniversary, and we have still a lot of growth to achieve there. And we continue to be excited about the offerings we have in all 9 platforms that we have in BDI.

Wow, that's a lot of singles and doubles. I need to do some work here. Maybe one last one, Chris, for you. I think pre-Bard -- or I guess, at the time of the Bard transaction, the goal was to hit 30% margins. Now obviously, the pandemic has disrupted that margin trajectory. When do you think you'll get back to 30% margins post pandemic?

So you're right, there are a number of things that took us off that path, some in our control and some out of our control, Vijay. But we're very focused on driving that. As you think forward, '21, I think we've said gets back to the '19 kind of margins and recover some of the COVID impact and some of the Alaris impact that occurred in '20. As you think forward in '22, we talked about the base business, ex COVID and ex Alaris, being in that mid-single digits. That brings with it margin improvement. And inherently, then on top of that, you would expect Alaris to come back at some point during the year, and with that, some recovery in the margins. So we do expect to be able to drive that margin improvement. And we're investing. One of the things that we haven't talked about today is the investments that we're making in some of the Veritor upside. We talked about those investments on the earnings call. And those are invested in not only driving growth, but also driving in our simplify initiatives. And we talked about Project Recode, and that will help us drive margin improvement as well. So as we go forward, we see the opportunity to drive margins, not only in '21, but '22 and beyond.

That's great, gentlemen. This is a great conversation. Tom, Chris, Dave, Simon and Kristen, thank you for your time this morning. Have a wonderful rest of the day, gentlemen.

Thanks. You too, Vijay.

Always a pleasure, Vijay. Thank you.

Bye-bye.

Thanks