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

Okay. Good morning, everyone. Welcome to day 2 of the 42nd Annual Raymond James Institutional Investors Conference. I'm Larry Keusch, the hospital supplies analyst. And it's my distinct pleasure to welcome Becton, Dickinson this year. Joining us from the company are Tom Polen, President and CEO; Chris Reidy, Executive Vice President and CFO; Kristen Stewart, Senior Vice President, Strategy and Investor Relations. Apologies that we're not doing the conference from Florida this year, but thank you to the BD team for participating in our virtual format. [Operator Instructions] Before we dive into our discussion, let me just turn it over to Kristen as she has a couple of quick comments to make before we get started. Kristen?

Hi. Thanks, and good morning, everybody. Just as a reminder in today's discussion, we may be making some forward-looking statements, and it is possible that actual results could differ from our expectations. As we have said before, there continues to be significant uncertainty about the duration and contemplated impact of 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 Forms 10-Q. The statements made in this presentation were made as of today's date. BD undertakes no responsibility to update such statements to reflect events or circumstances occurring after such date. With that, let me turn it back over to our wonderful host, Mr. Larry Keusch.

Thanks very much, Kristen. Appreciate it. So let's dive in. And I'll try to direct the questions. But obviously, if either Chris or Tom or Kristen have anything to add, please jump in. I guess starting, Tom, you've been CEO of Becton now for just a little over a year. You've clearly navigated the company through a challenging period within the COVID-19 pandemic, the ship hold on the Alaris drug pump. And really despite these challenges, I think we've seen some nice, tangible examples that you are seeking and driving to better position the company for that durable mid-single-digit growth outlook that you've got. So maybe a good place to start this conversation is if you can talk a little bit about what you've learned about the organization over the last year and maybe weave in there the strength of the organization and what you've seen and where you might need to -- where you've learned something and would like to perhaps invest. So maybe starting there would be great.

Sure. It's a great question, Larry. And obviously, thanks again for having me. With the vaccines and the obligatory screening, we can have the conference in Florida again next year. And I just learned something, now I realized we've been having conference for 42 years. It's also as long as we've been increasing dividends. So -- but to your question is -- so I came into the role, we have spent a lot of time as a leadership team really thinking about the next phase for the company. And we've spent a lot of time -- the result of that was our BD 2025 strategy, which was really around focusing on driving growth, simplifying the organization to drive efficiencies so we could reinvest in growth and make it easier for customer to do business with us, easier for associates to get work done and to empower our leaders in our services in the right way. Of course, like any new CEO taking over an organization, I had my own perception around organization capabilities. Of course, I had an inside track. I think about those both in my role as COO but also running multiple segments and businesses across the company. And so maybe you've seen me take action right off the start in making sure that we have the right leadership team, the right people, the right skill sets to advance that strategy, the BD 2025 strategy. And part of those leadership changes are not just the skill sets, but also making sure that we're setting the right culture from the top, drive a growth mindset, which is one of our cultural priorities; as well as strong teens-oriented model, right? Going on near $20 billion BD today, dramatic difference from 6, 7 years ago of $7 billion. That we need to make sure that we're operating in an empowered way with strong teams who can make decisions and move agilely, which has been a big focus of mine as I've come in. I think you mentioned the COVID pandemic, and it's certainly -- when it comes to the strengths of the company, it solidified something that I already knew, which is -- but I think took it to another level for all of us, which is just how essential BD is to health care. And we're probably the most broad company when it came to responding to the COVID pandemic, whether or not it was being one of the very first companies to market with a rapid antigen test. I think that's a testament to the progress that we continue to make on our innovation capabilities, and we can talk about those later on. Obviously, molecular testing. 90% of anyone ending up in an ICU with COVID was touched by a BD product, whether or not that's an infusion pump, an IV set, a catheter or other products there. And then, of course, we're making 1 billion extra devices to help deliver billion doses of vaccine around the world. That's just this year, right? We'll end up helping deliver well beyond that over the years ahead, having a real high-impact role in the vaccine. I've heard that from customers loud and clear around the world that kind of the new BD -- not everyone knew exactly the scale and relevance of who we were, but the number of top-to-top meetings I had over the last year where CEOs of large health care institutions got on the phone -- I haven't paid as much attention to our big suppliers. I give that to our procurement organization. We're more focused on payers and maybe this is attracting the best physicians and retaining and advancing our physician capabilities. The pandemic changed that for a lot of people, and they realized that BD is typically 1 of the top 3 critical suppliers to most hospital systems. And that relationship is something that they wanted to take to the next level as, of course, we do as well. But I think that is a big learning through the pandemic for both us and for our customers. I can't hear you, Larry.

You're actually on mute, yes.

Sorry about that. So Tom, in your comments there, you mentioned that innovation is a focus. And again, you certainly articulated that this is a key theme for the company. So can you speak to the innovation strategy? And I guess, in particular, I'm sort of interested in your past comments that you made regarding a focus on smart devices, robotics, analytics, kind of AI. So again, if you can talk about maybe how that innovation engine is shifting or changing under your leadership versus what was being done over the last 5 years, maybe the priorities are different. But I think innovation is really, really important, so I'd love to hear your thoughts there.

It is. The core of our strategy of BD 2025 is growth, right? We simplify and also strive for growth. Complexity is a growth killer. It's why we want to get rid of it. And we're empowering the organization, driving our culture to fuel growth as well. So you can hold on to that as our #1 priority. When I first came on the role, we did spend some significant time just stepping back and looking at the markets that we've gotten ourselves into because we've positioned ourselves into a number of very attractive growth markets. We also participate in just a wide variety across our Life Science, Medical and Interventional segments, a wide variety of markets. And so we stepped back as I was coming into the role and really looked hard at what are those markets that we want to double down our innovation dollars in, double down and checking [ in the work ] really, where do we want to evolve this portfolio over the next 5 and 10 years. And so we've made that very clear to ourselves. And we know exactly where we're going with that. Those are obviously hot markets that we think -- all the durable health care trends and tend to be growing faster than the average markets that we participate in today. And ultimately, coupled that -- while there are subsets of markets in stage renal disease, vascular access, point-of-care diagnostics, there are subsegments at that level. But if I were to raise it up, there's 3 general themes of innovation that we coalesce around. And the first is the one you just mentioned, right, it's around planning robotics, AI, smart devices and analytics to help improve workflow, health care efficiencies and improved processes. I think we can talk about some of those obviously in a second. The second major theme, though, is around enabling new care settings, specifically help patients go to where they'd want to be, right? So this is enabling the shift from hospitals to home to long-term care to surgery centers. We have a lot of great examples of how we're investing there. And the third one is to advance and reduce the burden of chronic disease. And many examples -- obviously, a lot of BDI examples there. But also even within diagnostics, around -- our new solutions around HPV screening, for example. If you go back up to the top, the one that you asked about specifically, so we're really excited about and we continue to invest in our HealthSight platform, which is really -- think about our HealthSight platform now as our clinical floor-based clinician-engaging informatic system, right? This is a system of BD that's up in the works. This is obviously what runs all of our medication management software. It's installed in 70% of U.S. hospitals, that analytics platform. This allows Pyxis and Alaris and our other med management software all talk to one another. Great examples of how we're applying AI in that. Part of our strategy is the collaboration we had announced last year with Microsoft, where we use their cutting-edge AI. They developed the software actually on our HealthSight platform to identify drug diversion -- narcotic diversion in a hospital, and we're seeing really phenomenal feedback from our customers on that and great capabilities that the Microsoft helped us with there. We've actually now taken that HealthSight platform, and you can see us putting BDI solutions now, leveraging that footprint, which is pretty unique, right? That's a cost advantage we have versus competitors. It's an ease-of-use for customers' advantage that we have and to speed the implementation advantage that we have because it's already installed, again, at 70% of hospitals. And so now you can see the BD Interventional segment coming out with smart devices, but they're tapping into HealthSight and connecting them directly to the electronic medical record through that preexisting system in many hospitals. So our temperature management platform just went smart this past year, now interoperable completely for a system of its kind there. Our new Sensica, automated urine output system, essentially a smart catheter. We'll be launching very soon. And that will, again, go through and connect through HealthSight, allow the analytics to get rolled in and even be viewed as part of the broader data that we see under medication management. In the laboratory, we're doing the same thing, right? So if you think about what's that data system for the laboratories, it's Synapsys, right? That's our health side equivalent for the laboratory side. And our Kiestra system, as an example, which is a fully automated microbiology lab with AI reading petri dishes and determining if there's bacterial growth and robots picking off colonies and bring them on mass spec or preparing our Phoenix panels. That has really been tremendous in terms of transforming how microbiology has worked for 100 years with Bunsen burners and loops to automating and digitizing the entire process. Whereas our Veritor now, it can wirelessly connect and upload data to Synapsys, which automates federal reporting requirements and the hospitals to automatically see the data that's coming out. And another great example that kind of fits both one, the analytics and informatics strategy, but also enabling the care shift would be what we had announced a week or so ago regarding our partnership and getting into home-based OTC COVID diagnostics. And we can talk further about that, Larry. But maybe one thing just I'll start to share there is that we indicated we have this partnership now, that we're going to be utilizing a cell phone to do the reading of the strip. This is an entirely new test for us. So just to make clear, unlike others, this is not us just taking the Veritor test and trying to bring it into the home or into OTC. It's actually an entirely new test for us that we've developed completely from scratch, tailor-made for OTC and at-home testing for COVID diagnostics. We're really excited about it. It has a number of additional features, specifically for the OTC and at-home market. I think, again, it's just a testimony to our increasing cadence of innovation and the focus that we've been driving on growth.

Terrific. A couple of questions coming off of that. But just on your last point there, did I hear correctly that you're sort of suggesting that the platform that you're developing with ScanWell, that, that actually now becomes a platform for other testing that you can bring into the home?

It could be. Yes. It's -- so this will run on our same lines as Veritor. So we get leverage of our assets and capital base and costs and speed to ramp up production. But it is a different chemistry. It's a totally different assay with a number of additional features beyond Veritor. So it's not Veritor.

Okay. Perfect. Two questions that just came to mind while you were talking about the innovation strategy. One, it sounds like where you are going in part is very different than where BD has been historically, and I'll sort of dumb this down, but sort of saying engineering plastic parts. And now it sounds clearly that you want to get into NR, AI and predictive analytics. That's a completely different skill set for your R&D organization and different engineering, et cetera. So do you have the engineering assets in place? Things are already in motion, so you clearly have some of it. But are you where you need to be at this point? Or is that a process that will continue?

No. I would expect we'd probably have one of the richest capabilities in the industry from that perspective. So we've amassed over the last several years and really started with CareFusion as one of the catalysts behind this. And doing the CareFusion acquisition, both the justification and pitch that acquisition, one of the key parts was giving BD analytics capabilities. We've been building off of those capabilities since the CareFusion acquisition. Today, we have over 2,000 software engineers and data scientists in the company, and most of those sit in the Center of Excellence at the BDX level. And we have centers of -- part of that, we have locations in San Diego, India, a number of other sites, Ireland specifically as part of our software and informatics COE. And all 9 of our business units have active innovation programs that they leverage. That central group for -- that central group not only has the base capabilities to develop the products -- and they also work with a number of partners. So they've essentially managed, for example, Microsoft partnership or other third-party partnerships. But they also help us set the standards, right? So that any one business isn't trying to come up with a new way of connecting to an EMR. That's why they all use HealthSight. They can go to our center. That's the standard. They all use the same standard when it comes to mobile standards. And ultimately, all of that's about creating a unified customer experience, which is really important as you start looking at being more of a digital company and providing those types of innovations. Don't get us wrong. We still make over 40 billion disposable plastic parts a year. And think about it, it's over $100 million actual parts molded, of course. Many of those devices now can have a dozen plus parts. So we still are, by far, the world's largest manufacturer of medical devices with those plastic pieces. We still have great engineering capabilities there. Of course, that is still part of our talent and skills to do that at very high quality and low cost. But we're obviously advancing our impact on -- for our customers, utilizing that technology.

Okay. Terrific. Just one more on innovation, then we'll move on. Several years ago, there was a big push certainly and externally to talk a lot about the diabetes franchise. And you obviously talked about it, addressing chronic diseases earlier. You were trying to move into sort of smart pen needles, obviously, the swatch patch pump. Just haven't heard a lot about that as of late, and just wanted to sort of take your temperature on what is the strategy within the Diabetes Care franchise.

Yes. And it's not by accident that we're much on the patch pump where we've been working on it behind the scenes very actively. And stay tuned on that topic. So obviously, we remain a leader. 2/3 of all insulin injections in the world happen with our devices, by far, the largest. We touch more diabetes patients than any other companies on the planet because of that scale and breadth. We're focusing on the type 2 patch pump. It's still advancing behind the scenes. Again, we want to get that further before we came back out and share its new feature set and time line. But stay tuned and work on it.

Okay. Perfect. So Tom, you certainly talked about aspirations to be a durable mid-single-digit grower. I think one of the challenges for investors is that the business is so broad that -- and it's got such a broad geographic footprint. It's tough to kind of wrap your arms around how you get to that mid-single-digit growth. So can you speak to the algorithm for growth and what areas of the business will really contribute to that sustainable, durable mid-single-digit growth that you guys are targeting?

Yes. Well, first off, maybe let me just start, and I'll turn it over to Chris in just a second. But if you look at our underlying markets that we positioned ourselves on today, our underlying markets grow about 4%, which is up -- pre-Bard is below 4%. Bard moved us up into higher-growth space markets. As I mentioned before, we've been very purposely looking at what markets we invest in. We've been changing our R&D portfolio. We've been focusing on inorganic tuck-ins into higher growth spaces. And today, if you look at just our R&D pipeline, right, it participates in markets growing at 6%, slightly over 6%. So we're steadily shifting our served market growth up. We're bringing innovations that are moving us into faster-growing markets. Of course, we've been gaining share in the number of categories across the year. And if you look at -- we've been growing mid-single digits, right, underlying for many years. That's not a new phenomenon, by any means. Maybe, Chris, if you want to talk through, we've got a number of exciting products in each of our different segments. I'll turn it to Chris to share details on that.

Sure, Tom. And that's exactly right. If you look back over a number of years, with the exception of last year with the COVID impact that we had, we've been growing the business in that mid-single digit range, Larry. And you've heard us talk about this in the past, but we're not typically a company of home runs, although the COVID testing, I guess, could be considered the home run from a revenue standpoint. But typically, it's broad growth across all 3 segments. So we talk about it as being singles and doubles. But you see that growth across all of the different segments. So BDI, Interventional group, has been growing very, very nicely. And we've been particularly pleased with the urology segment and the growth in the PureWick product. That exceeded our expectations. So we see a lot of good growth in products across BDI. Then as you look at the Medical group, I would point to Pharma Systems, which is the faster-growing business unit in the company, in high single digits. Last year, it was in the 9% range. And we see that as being a sustainable high-growth business over the next several years. And then in Life Sciences, obviously, we've had the big growth from COVID testing, but we've also seen very nice growth across their business. Tom mentioned the BD core product line. We're excited about the point-of-care molecular. We've got the BD Mosaic on the Biosciences. So a number of areas where we're -- got good solid growth that will contribute to that sustainable, recurring mid-single digit, which is what investors are looking for from us, is that predictability of mid-single digits. And we feel very comfortable that our base business is doing just that. And we've also, as we've talked about, invested some of the Veritor proceeds this year to help invest and drive that sustainability over the year. So we really feel good about that objective.

And of course, the other thing we did was start the growth and innovation fund in the year-end. And we fully allocated that on a series of new internal innovations ramped up across each of the different segments. Every business, I think, has incremental innovations that we funded through that. And we layer on top of the growth of innovation from Veritor proceed with the investment to further drive our growth agenda. And of course, you've seen us accelerate our tuck-in M&A. We feel really good about the pipeline we have there. And again, if we look at the tuck-in M&A, it will match exactly back to the growth strategy and the innovation agenda that I mentioned before, right? So if you think about Q1, we announced acquisition of one of the leading long-term care medication management company that adds in a nice cloud-based system that will connect in ultimately through our HealthSight platform that's right in enabling the shift of care strategy and our focus on doing so with differentiated smart solutions. Late last year, we acquired technology, a brand new, pretty cutting-edge dialysis catheter, part of our chronic disease management strategy, higher growth market in stage renal disease. We also acquired a product that we're launching later this year. A new addition to our core franchise that will extend us to those new solutions in infection prevention. We'll be, again, launching that later this summer. So we're continuing to supplement our organic pipeline with inorganic tuck-in M&A, which is exactly our strategy, tuck-in M&A. I've said at about 10,000 times. We'll continue to say that. And -- but we're doing it in a way that's driving accretive growth and in line and enhancing our strategy.

Okay. Just want to get one of the question out of the way. Certainly, things got a little bit more challenging towards the end of December and through January and perhaps portions of February where we're also impacted by the surges. How are you thinking about sort of when hospital admissions and elective surgical procedures can get back to levels that are on par with 2019? It seems like people are kind of -- some companies are a little bit more aggressive in sort of thinking it's a 2Q event. Others are sort of landing some time in the second half, maybe towards the end of the year. But just want to get your updated thoughts given the surgent that we've had.

Yes. So I mean first, just a couple of comments, and then again, Chris, jump in here, is that -- first of all, our '21 guidance does not reflect going back to pre-COVID levels. So that's -- we haven't assumed that for the balance of our fiscal '21 within our outlook. Some businesses, though, as Chris mentioned, just grew right from COVID, if nothing was going on. Our Pharma Systems business will be a good example of that. I think it's clearly quite durable through COVID periods as well. Back to your question, I think, ultimately, I guess, to when our patients are comfortable enough to fully come back in as well as just there's activities, people being out and about also drive health care demand in a way. And so that gets back to the vaccine effectiveness, the timing of the vaccine, full deployment, not just in the U.S. but around the world. Of course, we're a very global company. The U.S. is in many ways ahead of a number of other countries around the world. And so for us, we want to see the world vaccinated. Certainly in the U.S., it's the largest portion of our business, about 60%. So we see good progress there. And then the variance, understanding and making sure that those vaccines remain effective. So I think, again, I'm optimistic about volumes. We did see -- of course, you saw we had very strong performance in our base business in Q1. We did mention we saw the resurgence impact procedure volumes a bit in January. We saw that continue a bit in February, nowhere as near what the initial surge that showed or even some resurgences after that, but we did see an effect versus Q1 at least continue to manage through that. And I think right now, we're just very focused on seeing the patient volumes, I think, continue to return as the vaccination campaign will continue to roll out. And I think as the summer months come as well, like what we saw last year, that will also help drive the instances down. Chris, any other comments?

No, I would just reiterate. We did see in the first quarter patients being willing to come back into the hospitals. I think hospital systems around the world did a better job of handling the COVID patients and the elective surgeries. And we showed a great resilience across our business during that period as well. And so in -- as Tom mentioned, in December and January, we saw a bit of a tick-down. But I think that was more around expectations that there might be a spike in COVID cases from the holiday period. And I think people didn't schedule those elective surgeries during that period. But I think as we look out, we did not assume that we'd get back to pre-COVID levels this year. We see that gradually getting better over the course of the year to get to the point where, going into next year, we would expect that things would start turning back to normal to some extent. So that's the way we've thought about it going forward.

Okay. Great. Maybe a little bit of a tag team question for Tom and Chris here. I just want to touch on the new Biden administration and some implications from that administration. So there's 2 things that come to mind. One is what are you guys sort of thinking about the corporate tax rate and where that might be going and sort of how do you manage against that? And then the second part of the question is, could we see, as they try to push forward on ACA and expand coverage to health care, the medical device tax potentially coming back? I mean my suspicion is that would be immensely unpopular, and there was bipartisan support to get rid of it. But again, just wanted to take your temperature on both of those things.

Yes. I'll let Chris comment on taxes. Obviously, we've been in multiple discussions with the Biden administration both before they officially took office and continuing today around things like COVID diagnostics and the mass vaccination campaign around the country. And certainly, very strong focus, very serious focus on COVID. And we certainly applaud them for that. When it comes to the tax, the device tax, of course, we had a big focus with that and helping the industry really help educate why that's a bad thing for society, why it's a bad thing for patients, why it's a bad thing for America, enabling our competitiveness in innovation in the space that we want the leaders in. I think it's -- we're not hearing any rumblings on that specific topic now. Of course, it just got repealed not that long ago. That would not make any sense to put back on the table, as you said, that bipartisan support to get rid of something [indiscernible] that not seeing [indiscernible] today. Maybe, Chris, on taxes?

Yes. I would just say, Larry, that we don't expect anything to happen quickly on that. If you look back at the last administration, there's a lot of talk about tax reform. It took some time to come to fruition. And what ultimately came to fruition bore no resemblance to what was talked about on the campaign trail. I think you can expect to see the same kind of thing this time. And so we'll certainly monitor it and watch for it. We've looked -- dealt with these kind of things before. So we'll just see where that goes and react accordingly.

Okay. Perfect. We've got about 8 minutes left. There were a couple of product things I wanted to touch on. Maybe, first, because it's topical, on diagnostics. Certainly at the time of the last quarterly conference call, you indicated that you were comfortable at that point towards the high end of that $1 billion to $1.5 billion revenue guidance for Veritor. Just wanted to see if that's kind of still the case, if you're still kind of in that comfort zone.

Yes. As you said, towards the high end of that range, we remain confident in that to date. I would say we -- well, we've shared this recently as well that -- as the resurgent passed in January going into February, we did see, as many have discussed in the laboratory space and peers, some reduction in testing overall of COVID as you all know, obviously. And that's a good thing, right? There's fewer -- it went from a high of over 200,000 patients a day being diagnosed with COVID to more closer to 70,000 a day. So that's a big drop of the number of patients roughly being diagnosed with COVID every day as fewer people are going and getting tested as well. So we are seeing -- we have seen a slowdown from that perspective. At the same time, we're seeing a significant ramp in the dialogue around nontraditional testing, so the new people looking to do testing. It's a different mindset there, right? It's not a patient walking through the door. That's going down. But now you've got let's get back to normal discussions and how do we use testing as part of getting back to normal. I think what we're seeing now is kind of a -- the place for those 2 lines cross. The uptake of the nontraditional testing hasn't started ramping up as much as the demand for the traditional testing is slowing down with vaccines. And so that's something we're very engaged in on both sides. By the way, that's exactly what we thought was going to happen as well literally, and I think, through the month. So when we go back and we look at what we talked about in July, we are very clear that we expected COVID testing revenues to be weighted to the first half of the fiscal year. And that -- I think we literally said, as the vaccines roll out as soon as January and February, that, that wasn't as clear as to we are testing, we'd go from there. And you could see that start to come down. And therefore, it wasn't prudent for us to think about testing in the back half of the year and exactly what levels that would be. It would be at the same [indiscernible] as the first half of the year. So it's playing out as expected from that perspective, and we remain very confident in our -- towards the high end of that going $1 billion to $1.5 billion level.

Tom, that's super helpful. So am I sort of thinking about this correctly, we've got clearly declines in sort of clinical-based testing coming down as you would want to see? That certainly indicates that there's progress. We're kind of waiting and watching the nonclinical side start to pick up. And parenthetically, what I would tell you is my youngest kid, my daughter is in fifth grade, is at a public elementary school. And literally, this week, they started weekly PCR testing on a pool basis because. Again, the COVID problem's here fairly well. But if that pool is positive, they're going to go test everyone in that pool with a rapid antigen test. So that seems to be sort of what you're beginning to talk about, that we're going to start to see this go in that direction. But is it fair to say -- and I think you've indicated this that right now, as we're kind of -- these lines are crossing, that you do have more supply than demand. Is that kind of -- and then we'll kind of see how this then transitions through the remainder of the year.

We do. And that has -- again, that's [indiscernible], obviously, forecast to sell all of our supply at any point for the balance of the year. So that's not a new assumption. Otherwise we would have higher range.

Okay. And then last point on this, and then we'll move on. I want to ask an Alaris question. So it sounds like it is fair to assume that, again, depending on time lines here, that your fiscal 2Q for Veritor could potentially be below fiscal 1Q revenues. And I don't know, could it be down 50%, something like that on a sequential basis? Just any thoughts on how we should be sort of thinking about that. Because people are so focused on that number, and I was just hoping that we could get people calibrated.

Okay. And Chris can comment on the number, but we made it very clear on the Q1 call that Veritor Q2 revenues will be below Q1. I don't know, Chris, if you want to share anything.

Yes. I wouldn't add anything more to that. I mean we did point to that in the first quarter. We do expect it to be below. And as we said, when you think about the year, you see how much we had in the first quarter, you can kind of do the math for the rest of the year. We said it would be weighted primarily towards the first half of the year. So we haven't given a specific number and -- but at the same time, we'd point to the fact that it will be below the first quarter revenue.

The only thing that I would add, Larry, is that we had said that our manufacturing volumes would be slightly up -- our capacity, I should say, of what we could manufacture. And that we took the price action to reduce the price per test from above $20 and that we were going to reduce our price down to the low to mid-teens. So that would be kind of the math that you're working from. And that in our first fiscal quarter, we had said that we were working with a monthly manufacturing capacity of around $8 million per month, and that we had actually exited at a rate of closer to $10 million per month. So those are kind of the numbers to just kind of keep in mind. And that our ASPs, obviously, we're above that $20 million -- sorry, $20 per test in our first quarter.

Half of the -- half of the number was full year, I think, high end of the $1 billion to $1.5 billion range. We did almost $700 million in Q1. So that was ahead of our expectations, which is why we increased kind of the outlook towards the upper end of that range. But just as you think about it in the spirit back to the comment of first half weighted, Q1 by itself has had essentially [indiscernible] for the year. So if you think about how you view the second, third, fourth quarter.

Right. Okay. And then just in the last 1.5 minutes, 2 minutes that we've got here, just on the Alaris remediation. Obviously, Tom, you've repeatedly stated that this is your #1 priority, which, I think, is really important given the leadership position that you've got in pumps and your responsibility to hospitals and patients to make sure this is back in the right place. So just 2 quick questions here. First, are you still on track for that late fiscal 2Q, early 3Q FDA filing? What's left to be done? And I know you're not going to want to speak for the FDA. But any thoughts on, again, kind of when you could be back on the market?

Sure. So I'm really proud of our team. We've got over 220 people working full time on the Alaris submission [indiscernible]. The whole time we've been focused on this. So great progress. Completed a significant amount of the testing. Obviously, we're in Q2 now. We expect, again, by the end of fiscal Q2, early fiscal Q3, we remain on track for the submission. When it comes to when do we expect the approval then, we've always said we're focused on getting quality submission, right, comprehensive quality submission. And that remains our focus today as we're in kind of the final period before we submit. As we think ahead, we don't want to get out ahead of ourselves. We want to focus on getting the submission and getting them right before we start thinking about the approval timing. It is -- maybe a couple of comments I would say, though, it is a very complex and large submission, right? Think about well over 1,000 pages in the submission of that type of complex product. It's not just for the central PCU, plus the LVP, plus the syringe pump, plus an archive pump, plus interoperability and the software wrapped around. It's a very comprehensive solution, Alaris supply is. One of the reasons it's market-leading as it is. So to get that submitted -- we do think and would expect an approval sometime in fiscal '21 -- or '22, I'm sorry, not from '21 at all. We've made it very clear. We don't have anything in our '21 numbers. We would expect approval sometime in '22. Whether or not first half or second half, let's get the submission and get some further feedback from FDA. That's the other thing. We certainly applaud and very much value the partnership that we've had with the FDA or the collaboration we've set in terms of the continuous dialogue and feedback on our testing protocols and submission approach. That's been very important for us to take the time and have those dialogues where we can get that feedback, put into our approach with the testing into the submission again with the aim to provide the most comprehensive, easy to go through submission pack, which ultimately, will help shorten our approval timing in the days.

Okay. Well, thanks for that. We've exhausted 40 minutes. There's so much to talk about, but I appreciate you addressing the topics that we had for this morning. And thanks again for participating. Good to see everybody, and hopefully, we'll see you in Florida next year live.

Okay. Okay.

Looking forward to that.

Thanks. Bye.

Thanks, Larry.

Thank you. Bye-bye.