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

Good day, everyone, and welcome to Becton, Dickinson's (BD's) Innovate Series webcast. [Operator Instructions]. Please note that this call is being recorded, and an operator will be standing by should you need any assistance. It is now my pleasure to turn today's program over to Greg Rodetis. Sir, you may begin.

Thank you, and good afternoon. I'm Greg Rodetis, Senior Vice President, Treasurer and Head of Investor Relations at BD. Welcome to the fourth episode of our BD Innovate Series, highlighting peripheral vascular disease or PVD. Before we move on, I will remind you that we'll be making forward-looking statements. I encourage you to view Slide 2 in our presentation as well as our disclosures in our SEC filings, both are available on the IR website. So diving into today's spotlight. PVD is 1 of our 6 key growth platforms with a category size of over $5 billion, growing high single digits. As you will hear, we are broadening our category leadership in arterial disease, while expanding our venous portfolio in aiding in the shift to nonacute care settings. We are fortunate to have 2 of our PVD business leaders with us. They are not only integral to the PVD business, but are intimately familiar with the space, the patients, the physicians and the technology. First, allow me to introduce Stephanie Klocke. Stephanie is the Head of R&D for the Peripheral Intervention business. She sees over 250 engineers and researchers who are focused on creating new technologies that are helping to improve care. I also want to introduce Tim Hug. Tim is the global leader of our PVD business. He's been in this space for 15 years. Tim previously led the global sales team and is now General Manager of the business. Again, 2 experts at BD who are important voices in the overall peripheral vascular disease market. So let's get started.

To kick things off and to help frame the discussion, Tim, what is peripheral vascular disease and what impact does PVD have?

Thanks, Greg, and certainly appreciate the opportunity to tell our vascular story here. So PVD, or peripheral vascular disease, it's a circulatory condition that involves arteries and veins where -- and can be for a variety of reasons, right, where blood flow from and to your heart, throughout your body, is really interrupted, right? So on the arterial side of things, the blood is pumped from the heart through the arteries, but then for, once again a variety of reasons what causes the blockages or you get narrowings of the arteries, right? That can cause even claudication up to potentially CLI or critical limb ischemia. On the venous side, the vessels that help return the blood from the body back to the heart, the valves, really fail to work properly. You can have the compression of the veins and there are a variety of other conditions that can cause pain, discomfort, discoloration, potentially ulcers. So pretty much, we're talking about arteries and veins, pretty much everything except the heart and the brain here. So Steph, did I miss anything or anything you like to add?

Tim, that was a really great summary. I think one additional thing I would add is regarding the number of patients who are impacted by this disease. So today, there are more than 230 million people globally that are estimated to suffer from peripheral arterial disease. On the venous side, however, there's less information available on the global prevalence of this disease. However, it is estimated that more than 100 million people suffer from chronic venous disease in the U.S. alone. So when you think about that, combined, that is a really significant impact of peripheral vascular disease, more than 300 million people around the world. I also want to point that peripheral vascular disease, this is a chronic progressive disease. It most commonly presents itself with leg discomfort and pain, but it's really, really important to know that if it's left untreated, it can ultimately lead to amputation. So when you look at statistics, right, and the stats, it really emphasizes the need for awareness, for early detection, treatment and, of course, ongoing management of PVD. All of these things are truly critical in helping these patients.

Yes. Steph, now you raised some good points there too. And I think we'll see in a moment that there are quite a few folks now that are on the cutting edge and really on the front side of this, right? And the good news is that institutions, right, around the globe, but specific institutions are starting to do more and more to establish these PVD programs in communities to kind of, like you said, get ahead of the disease and certainly partner on that care continuum to really make progress in addressing it. So why don't we go to that video, I think, if we can, on the limb salvage there, Greg if you have that. [Presentation]

Thanks, Tim. I think we can see from these testimonials, there's a large unmet need within PVD. So Stephanie, just digging into this category a little bit, you mentioned 300 million-plus patients. Can you talk about the size of the need here and where does BD play in treating PVD?

Yes, definitely, Greg. The numbers around PVD are large. Whether we're talking about the arteries or veins, there are a lot of patients dealing with these challenges, as we mentioned earlier. We estimate the global category overall to be more than $5 billion, growing in the high single digits. There are thousands of clinicians across many different specialties that we work with who are focused on treating these patients. For us, at BD, right, we're really primarily focused on designing and developing these minimally invasive tools that allow our clinicians to address these blockages in this disease. Our physicians, how they go about this is they gain access through a vessel, through a needle puncture into the artery or the vein, wherever the disease is that they're trying to treat. They then move our tools to the disease to treat that problem. And our clinicians really need a wide variety of tools to treat this disease. I want to emphasize that for PVD, this is not a one solution or one-tool-fits-all type of problem. It's just like our own tool boxes at home, right? You don't use a hammer to solve every problem. You need a hammer and a screw driver and a wrench, ultimately, lots of different tools are needed. This is where BD really comes into play, right? We offer an incredible portfolio of purpose-built tools to address the entire case through the care continuum. Examples of our products, right, that do this are angioplasty balloons like Ultraverse and our specialty balloons such as UltraScore, both of these products are used to open and crack calcified vessels. We also have Lutonix. Lutonix is a drug-coated balloon that delivers a therapeutic dose of drug to the vessel to reduce the occurrence of restenosis. So restenosis, what's that, right? That's re-narrowing of the vessel, and that's what we're trying to prevent. And of course Rotarex, our atherectomy system. It removes tough plaque and blockages. Now these are just a few examples of our robust portfolio. And the ones I mentioned are really just on the arterial side, right? We have a very robust toolbox of solutions for our physicians. And Greg, when I think about your question, right, which is where does BD play? It's also really important to speak about innovation. And so for us, and I can talk about innovation for forever, but innovation, it really boils down to a few key factors. First, it's about the ability to treat complex disease and restore flow. Second, we really want to treat additional vasculature, right, where we have not been able to previously treat. So areas such as going below the knee and bringing our technologies and opening up that toolkit for our customers. Finally, it's about making endovascular treatments last longer. I talked about Lutonix 035 briefly. But when we look at our global registry, 9 out of 10 patients did not require reintervention after 2 years. This is a huge benefit to our patients, which really speaks to the efficacy of our devices. So innovation, right, it's truly about making it better for our patients and our clinicians, providing solutions that are less invasive, require fewer procedural steps, have faster procedural times and really help expedite patient recovery. So what do you think, Tim? What did I miss?

Yes. No, I think you hit it right on the head. And I think you're absolutely right. I think we hear [indiscernible], we have been and we continue certainly to be focused on delivering these innovative technologies, right? You mentioned differentiating. You mentioned, right, solving a problem, obviously, treating complex disease, right? And when I think of the things what's important to us is really advancing the world of health, right, and being first to market with a product like Venovo, which is the first venous stent available in the market [indiscernible] in the United States. And then also with developing a technology like Lutonix and then continuing to iterate it, right, and refine it and make it better and really meet our customers' needs which, in essence, actually is making their job just a little bit easier or the patients, right, just a little bit better than what they would have been previously and the technology that we're able [indiscernible] certainly has the ability to do that.

So that's a perfect segue for where I want to go next. BD has a long history of bringing novel devices to healthcare. Stephanie, can you talk about how you work with physicians to drive innovation?

Absolutely. Yes. So we work very closely with physicians and observing cases live is imperative to our culture of innovation at BD. I really, really cannot stress the importance of this enough, right? It is critical to understanding the types of disease that our physicians are treating, the challenges that they're experiencing and then ultimately gathering the inputs on how we can make these procedures better, both for physicians and patients. Seeing a problem firsthand is truly believing the problem and then understanding how to solve it. So how do we do this, right? We get our teams out in cases, they see these problems firsthand. And ultimately, they take those ideas on maybe how they could come up with a solution, turn it into a prototype, work hand in hand with doctors to refine that product and then they iterate it again and again and again, ultimately leading to what we would consider a frozen design. At that point, we continue to partner with our physician to gather the necessary clinical evidence to ensure that the solution is right and it also can drive market access globally to enable reimbursement. But we don't stop there. We don't just go once and are done. We're constantly in cases, constantly in procedures, always looking for that next opportunity to improve care.

Yes. And Steph, we also -- right, we also then play an important role certainly in clinical education, right? It's our responsibility and something we take seriously to make sure that the experts who have either part of the initial clinical trial or certainly key opinion leaders in the area, train others, right, in terms of, for those who want to be more proficient or provide that type of service or type of case, right, for most their patients. And then our sales representatives or clinical specialists, certainly, are in these cases every single day, usually 2, 3, 4 times a day globally. And we have a pretty considerable rigorous training program for them to make sure that they're up to speed on certainly how to best utilize our products. It's very important that we separate ourselves and distinguish ourselves by being in an added value to the physician and certainly that they're essential and partners with the physicians and with the hospitals that they work with. And we take that very seriously. And certainly, that presence that Steph was talking about in terms of the observation of cases and then also our clinical specialists and our physician training that certainly helps set us apart at times. Our approach, though, not only helps us to create the technology but obviously for training, but also in terms of education and awareness. And this really comes forward in terms of market access efforts, right, really around the globe. And just to ensure that we can provide these technologies around the globe in different regions, different countries and then provide the evidence and also the training and the awareness to go behind that. And certainly, I think it's something like Venovo in China, right, that speaks to that where there was strong collaboration between the societies in China and the societies actually in the United States, and we were thankful actually to play a role in that in sort of setting it up together having those conversations. So that's just one of the opportunities and one of the things that we do to help improve market access there.

So Tim, just on the subject of market access, just from a business standpoint, what are you doing to capture share and grow the overall business?

Yes, that's -- where do we begin, Greg, right? We can go so many different ways on that. But I think when it comes to market access, I think for us is that PVD is a global problem. I think everyone now understands that. In certain parts of the world, right, are different spots, right, certain areas that develop PAD, even PVD programs, while others actually are just sort of starting out. And I think, first and foremost, from a regulatory standpoint, we partnered with the regulatory bodies very closely with excellent teams around the globe that work tirelessly to make sure that we understand what they need from us and then certainly execute on that. I think the second point is that, as Steph alluded to, there's a clinical evidence need, sometimes in specific geographies like Japan, for example, right, where they might require Japanese patients to be part of a specific trial, right? And the local nature of that is very, very important to PMDA. So we partner and we make sure that we have the clinical evidence necessary to achieve and have the market access there. I think clearly, physician training, we have to be committed, especially when we're new to market. And it's sort of a new case and new technology to market that we provide with training. And we have to be committed to that. It's certainly a significant investment, but it usually pays off. And then last, but not least, I mentioned societies earlier. There is -- globally, there are some societies in cardiology, vascular surgery, radiology, et cetera, that are yearning for these new innovative tools, right, that can improve the quality of life, and they are willing to partner, willing to help and also willing to guide in terms of providing that sort of knowledge in how to bring forward the products but then also do it in an appropriate way and make sure the patients are set up for success. I think when I look at, certainly on the PAD side of things, probably the future holds is that we would expect considerable tools on the BTK or below-the-knee treatment. There's a lot of superficial femoral artery treatments out there right now, which is kind of your thigh area, but the lower you go, the more severe your disease is. And I would expect significant opportunities to improve care in that area. And then while the venous space and venous disease is a relatively newer space in comparison to PVD, our novel technology like Venovo or venous stent, that creates these new opportunities for these interventionist to provide care. And whether it be in deep vein procedures or superficial venous procedures, we certainly see lots of opportunity to advance the world with health and then also most certainly provide these new technologies and innovations to certain regions.

Yes, Tim, I'll just chime in. I think that you nailed it right there with that answer. We have a lot of runway as you emphasized in PAD and venous disease. As long as there are patients, right, who aren't being treated or disease that's difficult to reach or where there's room for improvement and the durability of our treatment, we have opportunity to innovate and to improve our tech and then bring better solutions and continued solutions to market. I also want to just take a minute and mention that we also have a team that's solely focused on increasing access to these game-changing technologies. This team works with institutions and government agencies to really show how innovation can create more durable outcomes and overall value. More of this team and that we can get them to tell the story and really understand and get our institutions and government agencies to understand how our products help provide solutions, the more they're on the shelf and most importantly, the more patients will be treated, and that's our goal, right, it's to improve healthcare for patients. So really, in summary, from my perspective, Tim, I would say, I think there's a ton of upside for our business and that we just have a considerable amount of opportunity and room for continued growth.

Yes. And then -- yes, you hit it, Steph, I think when I look at China specifically, when I look at different parts of the world, I start out with China, right? China, I look at it, it's a very high-growth PAD market, right, that sort of reflects maybe where the U.S. was maybe 10, 15 years ago in terms of developing in the PAD space. New technology is moving through China at a rapid pace. There's certainly an opportunity to impact patient care. Cases are on the uptick and with our cadence of launches in China, we believe the market specifically in China provides tremendous growth opportunities for us. I think of LatAm, Latin America, as another region that's experiencing tremendous growth for us. And again, it's not only that this is a great business opportunity, but we see interventionist and technology centers for PAD and the procedural expertise continuing to expand and grow and more patients are getting care than ever before. When I look then sort of more locally here in the United States, which is certainly a more of a developed market when it comes to PAD and PVD, we still see good growth in the future. And certainly, there are still a lot of unmet needs when we start looking at the efficacy numbers across the board. We've come a long way, but there's still a long way to go. As in other parts of the world, our -- once again, our cadence of new technology, in the years to come, looks very, very positive. And perhaps we'll touch on that in a few moments here. But anything that can improve the durability of care and make things just a little bit easier for providers and a little bit easier actually for patients, it's a win and then do it in a cost-effective way, that's a big win. But all this -- for this to take place, I mean, execution cross-functional is key. Obviously, across the globe is key. We're all connected now more than ever before. And certainly, the teams are working tirelessly to make that happen. But I'd certainly applaud the efforts, actually, of our innovation teams and our global teams for executing. And I do think the future is pretty bright in terms of our innovation and where we're going.

So, Tim, just on that, what excites you most about the portfolio today?

How much time do you have, Greg? So I think when we looked at this, when I think about it, Greg, when you look at PVD, once again, you kind of subdivide it into the arterial side and the venous side, right? We have exciting new technologies that is happening right now in both, right? So on the venous side of things, I would argue that we have the broadest portfolio. And I would define it as category leadership, right? So we have an exceptional stance with Venovo, the first to market here in the United States and now launching globally. It's launched in China not too long ago, doing exceptionally well. It's approved in Japan. About to potentially start that trial actually soon, the post-approval study. So that continues to do exceptionally well. We have the #1 large-diameter angioplasty balloon for post-dilatation, right? That's called Atlas Gold. It's a one-of-a-kind type of product. We have our Denali IVC filter, which is certainly kind of like a, in essence, a device that prevents PE or pulmonary embolism that has exceptional data associated with it, I think more and more data about it will come out soon. And then we have our most recent acquisition, right, which is Venclose. Venclose is RF technology that's meant for superficial venous disease. So think about your varicose veins, think about discoloration, think about pain, think about ulcers that you know that someone has perhaps in your family or friends or parents or whoever, right, that's what this RF technology do. And it's highly differentiated versus the technology that's out there now. You can customize somewhat actually to the specific length that you need with our portfolio. So the venous space is certainly robust. There's lots of opportunities to grow, and I expect that to be a significant growth driver for us in the years to come. And then -- and I would expect us to continue to look for ways to fill our pipeline actually with these new venous technologies and iterate and bring more products actually to market.

So it sounds like BD is advancing in the world of health, especially within the PVD category. Stephanie, like what's next for PVD? Is there anything in the pipeline that we should keep an eye out for?

Yes. Yes. We have a lot of exciting innovations coming in our pipeline. And of course, to brag a little bit, our new product development process truly is the backbone of our business. We really think that our model is exceptional and distinguishes us from our peers. But without going into all those details and how we do it, I'll just say the innovations I'm most excited about, super excited to talk about one specifically right now, which is our new low-profile self-expanding covered stent. This is a great example of a new technology, we believe, will truly be exciting for physicians, very beneficial for our patients and for, of course, our business. As one more tool to add to the toolkit, as I mentioned earlier, especially when treating really complex PAD patients. But what I'm excited to announce today is that just Friday, just 3 short days ago, we enrolled our very first patient in our pivotal IDE clinical study. And the press release hasn't gone out yet, right? You're going to see it very, very soon. So Tim, I'm not sure if that out there yet, but hopefully, hopefully within the coming hours, it will be released. So lots to come for this one exciting platform. And that's just one of many organic programs we have in the pipeline, as we speak. I think you're going to get to see, over the coming years, multiple new organic launches coming in the PVD space. I also wanted to talk about inorganic opportunities, right? So, of course, we do incredible organic development, but we also are focused on driving continued iteration of our inorganic opportunities. And the Straub acquisition and our Rotarex system is really a perfect example of that. The Rotarex system has a unique design that provides the tools for addressing all sorts of lesions. A lot of times, like I said, a physician, when they access the vessel, they don't really know what they're going to get with that disease until they get into the vessel to treat the lesion. Of course, these lesions, they can be thrombotic, they can be plaque, they can be [indiscernible] calcium, you name it. The beauty of Rotarex is it's really engineered to remove a variety of lesion morphologies. And this is especially true for the case of in-stent restenosis, right? So in-stent restenosis, this is when the disease has regrown through a previously placed stent and further narrowed the artery. So when we acquired Straub and the Rotarex device, we saw this product as a perfect solution for in-stent restenosis. And we took it upon ourselves to iterate and to ultimately do the work necessary to obtain that in-stent restenosis indication. We're also not stopping there. We're working on a next-generation version of our Rotarex, which is a lower profile version which will give our physicians another tool for treating those really difficult below-the-knee lesions as we talked about. Like where we're going and where do we see innovation, below-the-knee is key and this is going to be a great tool for that specific disease.

Yes, Steph, the tools are -- those are certainly great examples, right? And we have exciting innovations. But by the way, congratulations to you and the team there on the low-profile covered stents. Certainly making some breaking news here today. Yes, the press release will come out shortly. I think, I also fully understand now that, now more than ever, I think we all realize that data and evidence now is more important. And certainly, payer -- regulators, right, obviously require evidence, certainly, payers. Physicians are demanding real-world evidence, right, to better understand sort of where it fits in the algorithm. Societies actually are partnering with companies and partnering actually with different groups to generate evidence and data. And then certainly different regions and countries around the globe have very specific interest, right, in their citizens actually being part of their trials. So I think this evidence piece certainly is key for us and will be a big part of our innovation, right, moving forward. It's having the evidence, not only it supports and it will deliver the outcomes, but deliver the outcomes in comparison to the standard of cares currently but also do it in a cost-effective way, and that's becoming more real and the necessity every day now as we move forward. I think it's important for us, not only did we have, Steph, the IDE kick-off of the first patient, but we also just kicked off our most recent TIPS, right, cover stent, right? And then IDE, a few months ago. And so that enrollment just kicked off. It's enrolling well. And I think it's likely to potentially have a significant benefit and certainly some value over the standard of care currently. And then also, we also did complete actually our first in-human drug-coated balloon trial, which is called our [ ALT ] drug program, right, which is [indiscernible] solution and formulation that we're excited about, and we look forward to collaborating with the FDA in the near future and our pivotal IDE. So certainly, a lot of exciting technologies moving through and at different stages. And that's just what we've gone public with, certainly not that we have all going on here.

That was some great information about a very exciting part of one of our BD businesses. It sounds like there's certainly a lot of patients and physicians who are counting on the work that this team is doing. Just, Tim, before we go to the Q&A section, with you, Stephanie and the IR team, are there any closing comments you'd like to make, just to maybe bring this discussion home for our audience?

Sure. I appreciate the opportunity. And once again, thanks for having us on and having a conversation. I think it's important to point out, right, that when people think of cardiovascular disease, they often think of coronary disease, right, the heart attack and they think of that. And I think it's important to point out that technologies on the heart have come a long way, right? The reintervention rates when you receive a stent in the heart is exceptional, about 95% of them will stay open at 5 years. And that's an exceptional result. That type of result is not yet there yet, right, in the remaining vasculature, right, in the legs, right, in other parts of vasculature, other parts of the arteries and veins. We've come such a long way in the last 10 to 15 years, but we still have such a long way to go. And here at BD, BDTI, Steph and the team here and everyone here is committed to bringing these new technologies that can certainly advance the world of health and certainly bring the differentiating technology to allow folks to just have -- to make things a little bit easier for our physician customers but then also improve the quality of life of the patients that we treat.

So we really appreciate those insights. Now I just want to give some members of our audience the opportunity to ask questions, who have been listening. So operator, can I please ask that you assemble our queue?

[Operator Instructions]. And our first question will come from Rick Wise of Stifel.

I feel like I've learned a lot. Maybe just -- first, you highlighted your innovation pipeline internally and as well talked about acquisitions that you've done, Tim, like Straub, Rotarex and Venclose, et cetera. Maybe talk to us about your perspective today. Do you have -- I'm not sure how to ask it, but it seems clearly you have a broad product line, but do you have the product line breadth and depth, particularly in terms of novel, new technology that enables you to sustain the kind of growth we've seen from peripheral intervention business, and broaden or gain your share in your arterial and venous leadership business?

Yes. I think -- I appreciate the question, Rick. And certainly, when I think when it comes down to innovation and when we look at PVD, how we look at it, right, from an innovation standpoint or R&D or M&A, I guess it's very similar right now, just the overall BD strategy, right? We expect there likely to be a healthy mix of R&D and certainly M&A. And I think Tom has noted, [indiscernible] noted in our earnings calls that vascular is a space that certainly is an opportunity for us to tuck-ins, et cetera. So I think we're pretty active there. Our innovation team, right, combined with our strategy and M&A, they work very, very closely together. And sometimes, we certainly -- we'll take the belt and suspenders type of approach and do both in essence and look at both. And while other times, we'll certainly go down another path. But I would venture to guess, right, that we certainly have a very active and robust innovation, but we're also certainly active there in the M&A front looking at opportunities. I don't know, Steph, do you have any thoughts about that and it'd be interesting to get your take on.

Sure. Yes. So I'll just add, and once again, thanks for the question. We absolutely, I think, have the breadth and depth today to drive the continued near-term growth that we need, but we're never going to stop innovating or looking to acquire for future growth, right? For us, it's always true growth lies in continued innovation, continued driving, new acquisitions or great tuck-in areas for our business. Those are things we won't stop doing, even if we feel we have great breadth and depth as I think we believe we do today with these recent acquisitions.

Rick, thanks for the question. Appreciate it.

And our next question will come from Joanne Wuensch with Citibank.

Even acknowledging the breadth of the portfolio, are there particular areas on either side that you're like, I wish we could fill this in? Or what do you think is really missing in the portfolio? That might be the better question.

Yes, it's certainly a good question. And so Joanne, I'm not sure I'm going to lay out exactly what we're looking at right now. But I will tell you, though, that you raised a good question. I think what we're trying to do is we look at sort of first of all, our internal capabilities, right, what they are from a tech standpoint, right, what are we good at? What can we make, right? What have we proven from a skill set standpoint, capability standpoint? We usually start there. With the exception actually where the unmet needs are certainly with the customers and with the physicians and patients actually that are out there. I think we are actively looking, right, both internally and then also externally, right, just to stay within sort of this PVD, right, sort of realm and stay focused there. And while we, perhaps, actually some of our competitors and other folks maybe are looking outside in terms of adjacencies, we're looking -- once again, we know that we can do better in the venous space and also actually do better in the PAD space. And so I think we're honed in on that. And certainly, there are some gaps in our portfolio for example, right now, thrombectomy, right, on the venous side and then certainly on the arterial side, there's some missing -- there are a couple of gaps there, too. But we're actively pursuing it internally and then also externally reviewing those opportunities also. I don't know, Steph?

Yes. I'll chime in. A great example of where we saw a gap was in the arterial stent graft space, right? We weren't playing there today. It's a single-player market, which is core -- or was. And now we have our product that we saw that we could fill that space and design a better solution and new improved product. And that's what we're doing with this IDE, right? TIPS is another great example of that, that we started the IDE just a couple of months ago, where we did not -- we're not in that space today, and we are and we've innovated and moved into that space. And I think we mentioned today a few areas below the knee, right? We see below-the-knee arterial space as a great growth opportunity for us. And so we're looking at a lot of internal development programs in the arterial space below the knee.

Our next question will come from Patrick Wood with Morgan Stanley.

I guess the high single-digit growth you sort of pointed to the market overall, you gave us some color around the geographies. I'm guessing the U.S. is going to consistently be a little slower outside of maybe BTK, but how critical is China and EM and growth in those markets to hitting that high single-digit number? And within the U.S., from your perspective, can you give some color around, say, above the knee and below the knee? Do you sense a differential between those 2 and the growth algorithm going forward?

Yes. Patrick, I'm not sure we're giving that level of detail between above the knee and below the knee before, but certainly, the team can just give their thoughts about opportunities outside the U.S., I think you mentioned China, et cetera, and just how they're feeling about the markets, the opportunities, the unmet need there.

Sure. Thanks for the question, Patrick. We appreciate it. And so I'll take a swing and then Steph be interested, obviously, you can take it, too. I think from a China standpoint, I mean China, historically, the last few years, has performed extremely well, right, double-digit growth, and we expect that to continue to happen on the vascular side, right? It's the innovation, looking through the cases continue to rise. And certainly, we would expect products like Rotarex, products like Venovo, right, innovative technologies continue to do well and do well over there because they're differentiated. And our China commercial team is exceptional, and they continue to grab share and move the needle. So I guess I'll start there with China. And then -- just like I mentioned just LatAm, LatAm specifically too, right, LatAm is doing exceptionally well. Cases continue to rise. Our technology is moving through. I would expect that to continue to be a robust growth area for us in the future. I don't know, Steph?

Yes. No, I agree, I think, huge potential growth opportunities outside the U.S. and from the innovative lens or the innovation lens, we're always looking at what are the specific unmet needs for those regions, not just in the U.S., but there are unique needs country by country. And we've specifically designed and developed products for specific countries in the past, I can think of multiple examples within Japan and China. So great opportunities for us for growth outside the U.S.

Thanks, Patrick. Appreciate the question.

And our next question will come from Robbie Marcus with JPMorgan.

This is actually [ Rohan ] on for Robbie. I just wanted to ask about what you're doing to capture share and innovate with competitors also pursuing the large BTK market? But specifically, if you could provide any insight into the product innovation here, both inorganic or organic. And also just to kind of segment off of Patrick's question regarding kind of the market sizing. Any color you can provide on like the delineation between above and below would be helpful.

Yes, as Greg kind of referred it, too, if I want to differentiate between, right, the above knee and below knee, but I can't speak just to that space, right? So that space specifically -- there is such significant unmet needs in that space, right? We know that. We know it's a highly calcified area. We know the lesions are lengthy, right? We know that the more distal the disease, right, the more severe the disease, which can lead to amputations. We know that there's been some technology, some movement of late, right, with given technology actually having presented their bio-absorbable stent actually just presented [indiscernible] showing a positive result. So we expect more and more tools to be available [indiscernible]. We expect that. And we'll certainly actually be a player in there, whether it be internally, right, or externally. And we are exhausting both of those avenues and certainly have technologies and from an innovation standpoint, internally, but then also looking at external opportunities. So I'll sort of pass it over to you, Steph. I think it's important to point out that we have started our [ ALT ] drug first in-human, right? We completed our enrollment there for the SFA or superficial femoral artery, that said above the knee. And we'll wait and see sort of what the results actually show in the months ahead. But we believe we have an outstanding formulation. And if that holds true with the data, which we believe it will, right, that potential formulation could be put on a variety of different other applications. So, Steph?

Yes, correct, you nailed it. I'd say, look, I mentioned as you're talking about BTK, we're looking for expansions and looking at expansions of our Rotarex products. And then for sure, with [ ALT ] drug, we're really excited to see our early first in-human results. We have high expectations for these outcomes, and it could lead to a really great platform for us for future programs.

Thanks. Appreciate the question.

Our next question will come from Travis Steed with Bank of America.

In the market, there's been some prior auth noise with Aetna. And I know a lot of the societies have kind of pushed back on Aetna. But curious if you've seen -- how you're seeing that impact your atherectomy business and if you're seeing that stabilize or kind of what you're seeing on the Aetna side? If you're seeing it spread to other payers or other payers are thinking about paying for some of these procedures?

Thanks for the question. I appreciate it. Yes, certainly, it's consistent with what you've heard from other companies, right? So at the end of the day, it's stable, the cases, right, as physicians and hospitals, right, and certainly understand now what the requirements are from that now, right, and they're navigating actually through that. So there potentially, would have been some delayed procedures, but certainly, they're navigating through that, and things are stable. We have not seen any addition -- any additional payers or so actually jump on that bandwagon. And certainly, to your point, right, there was a large societal response and a discussion that's ongoing between Aetna and those physicians. So we'll -- I'll let that be, but that's -- but to your question, we see things as pretty stable right now.

Thanks Travis. Appreciate it.

Our next question will come from Larry Biegelsen with Wells Fargo.

So VTE or venous thrombectomy has been a hot area. You acquired Aspirex. What do you need to do to make that a larger player? Are you pursuing a PE indication? And secondly, if I look at the 2021 Analyst Day slides, you had IO beads on the pipeline chart under the peripheral pipeline. What's the status of that?

I can speak first. So from an Aspirex perspective, yes, we are -- the product is performing excellent. We're seeing great usage with it. We have received also an additional indication for it for use in the AV space, not just in the deep venous space. So that's a growth opportunity for us there. I'll let Tim speak to it a bit more on the market side. From the IO beads, that's not as much in our PVD space as it is in our oncology platform within peripheral intervention. And it's still -- the development is going really well. We're really excited about where we're at within our R&D phase and pipeline, and things are looking great and progressing well. Super excited and not too far future to have some other updates for you there. And do you want to take it on the other part of the question?

Sure. Yes. I'll just comment on the -- just that PE spaces in general, right? So certainly, mechanical thrombectomy is certainly -- may see relative to the last few years. We're aware that, right, with the number with [indiscernible] those companies with technologies that have come along. And I would see -- I foresee that to continue actually to increase. Our technology, certainly, we're looking at it internally and navigating actually through that, along with actually looking at external opportunities to see if that makes sense and to see if we really, really want to play in that specific area or not, right? Because that's certainly a high commitment area and a high feet-on-the-street area there. So we're still kind of looking at that.

And our next question will come from Matt Miksic with Barclays.

It's a great session. And I wanted to maybe ask a couple of questions about how big this, you may have mentioned it, but just how big this peripheral intervention business -- peripheral vascular intervention business is within your peripheral? And maybe just stepping back from some of the market size numbers that you put out there, I think Lutonix and some of the other atherectomy devices that you mentioned are kind of well known to folks who cover the space. But which one of these products or categories do you feel is really kind of your anchor or beachhead the reason that you're -- they have a significant place in a clinic? And which one of these do you think is an opportunity to grow off of that and you add to that? And I have one follow-up, if I could.

Yes. So just before we just get into kind of the -- some of the growth opportunities. We talk about PVD being the $5 billion category, growing high single digits. I don't think we've gone any much, much deeper than that recently. So we'll just leave it there. And then just for the team to talk about how they're thinking about the different kind of growth vectors of the other spaces we're in.

Sure. I'll just -- I'll comment on it just in general, Steph, and then I'll throw it over to you to see if you have any thoughts there. So I appreciate the question. I think the venous space, as I mentioned earlier, right, is at a stage of high growth right now, right? You see it with PVD growth, right, with PVD thrombectomy, you see it with PE thrombectomy and you see it with stenting, right, you see with superficial venous procedures. You just see it across the board. And I think that those treatments, those innovations with technologies, they're where PAD was 10, 15 years ago. So I'll continue to -- when you look at our portfolio, I would consider that our venous portfolio or category will certainly actually have a robust growth this year and hopefully in the years to come. I think on the PAD side or so, right, think about Rotarex and that acquisition from Straub, that's a sizable market, right? We just got in there. We are doing exceptionally well actually in China and in Europe. And then also just bringing to the United States, [indiscernible] is doing very, very well, very specific to those CTOs, right, and those in-stent restenosis types of cases. I would consider actually that as a really solid opportunity for us to continue to grow in the years ahead. I don't know, Steph?

I think you nailed it, Tim. Nothing too much more to add.

So Matt, thanks for that. I appreciate it. I think we just have time for one more question at this point.

And our final question will come from Josh Jennings with TD Cowen.

I appreciate the update on the business. And just wanted to follow up. This may have been asked and you addressed this already, but just the paclitaxel controversy. In the rearview mirror, where is the drug-coated balloon, I guess, the SFA segment stand today? Is that a growth market for BD? And where is Lutonix share trended? And then the second follow-up question is just on pricing. BD's pricing has been a tailwind for corporate-wide, but for peripheral vascular business, where does pricing stand for this segment in the medical devices industry?

Yes, Josh, thanks for that. Just as far as pricing, we really do -- we really do not give pricing color below the BDX level. So obviously, we talked about BDX pricing being positive with last year being the peak. So we'll just leave it at that. As far as the update on the DCB market, I'll just turn it over to Tim and Stephanie, just to bring that home for us.

Sure. Yes, I think that was -- come July 11, 2023, that was some great news, right, for the FDA to certainly reverse that. I think as you're probably aware, right, as more data actually became available, right, we saw this pickup of drug-coated balloons being used more and more and more after the initial dip. And so perhaps it wasn't necessarily a drastic significant uptick across the board, but you saw it sort of a modest uptick, if you will. But I'd like -- drug-coated balloons continue actually to grow and certainly a growth area for us. And not only actually for growth for us, but if you can take a look at the headroom, right, the headroom, when you look at the SFA, right, approximately 50%-or-so of procedures right now don't include a drug technology, whether it be a DES or DCB. Now some of that's actually non-acute [indiscernible], but certainly, that's an opportunity, right? You take a look at BTK and what's occurring there, right, and the unmet needs there. When you take a look at AV and while doing well, it's still low penetration. So in terms of drug-coated technologies, there's certainly an opportunity there to have higher penetration rates. And then the last thing I'll say is that, as you're aware, with our [ ALT ] drug [indiscernible] portfolio or our first in-human just being enrolled and we're waiting for the data over the next few months, we're confident actually in that formulation and look forward to the results. But that's one of those where we continue once again to iterate and make things actually better and hopefully that will be the standard of care of the future.

And that does conclude the audio webcast. A replay of this webcast will be available on the investors.bd.com later today. On behalf of BD, thank you for joining today. Please disconnect your lines at this time, and have a wonderful day.