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BD's (BDX) New FDA Approval to Improve MRSA Diagnostics

Becton, Dickinson and Company BDX, popularly known as BD, recently received the FDA’s 510(k) clearance for the new BD Kiestra Methicillin-resistant Staphylococcus aureus (MRSA) imaging application. The application uses artificial intelligence (AI) to interpret bacterial growth and release negative specimens with minimal human interaction.

The AI-based imaging application is backed by the BD BBL CHROMagar MRSA II screening plates and powered by BD Synapsys Informatics Solution. The application can be used with both standalone BD Kiestra ReadA systems and track-based BD Kiestra laboratory automation solutions.

The latest regulatory approval is expected to solidify BD’s foothold in the global Diagnostics business, thereby boosting its overall Life Sciences segment.

Significance of the Approval

Per the Centers for Disease Control and Prevention, MRSA in hospital settings may cause severe problems, including blood stream or surgical-site infections, sepsis and even death. As performing a lab test is the only way to determine if a particular kind of infection is caused by MRSA, the ability to run these tests efficiently and effectively may have a significant impact on patient treatment.

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The BD Kiestra MRSA application uses AI to automate the traditional labor and time-intensive task of inspecting Petri dishes to determine the presence or absence of bacterial growth. This will likely enable medical laboratory scientists and technicians to focus more on higher-value analysis. The application is also expected to assess single specimens or group together the large volume of plates with non-significant growth for batch review and release of negative results. This, in turn, may help reduce the administrative burden on technicians.

The MRSA imaging application uses AI algorithms to look for specific culture characteristics on the BBL CHROMagar MRSA II plate. Based on that information and analysis by BD Synapsys informatics, the plate images are automatically organized and sorted into meaningful worklists for laboratory scientists and technicians.

Per management, the pandemic led to significant and ongoing labor challenges in laboratories. Management believes that since reading plates is a labor-intense and potentially error-prone process in microbiology, the use of the imaging application to automatically organize specimens in meaningful worklists may help use limited laboratory staff more efficiently. It will likely allow lab personnel to concentrate on more critical and complex specimens.

Industry Prospects

Per a report by MarketsandMarkets, the global molecular diagnostics market is anticipated to reach $30.2 billion by 2027 from $23.2 billion in 2022 at a CAGR of 5.4%. Factors like the emergence of new viruses, technological advancements in molecular diagnostics and the growing awareness of early disease diagnosis are likely to drive the market.

Given the market potential, the latest regulatory clearance is expected to significantly strengthen BD’s business worldwide.

Recent Developments in Life Sciences Arm

This month, BD announced its second-quarter fiscal 2023 results, wherein it recorded solid top-line and bottom-line results and improvements in the overall base revenues. Robust performances by both geographic regions were also seen. The BD Life Sciences segment’s Integrated Diagnostic Solutions business unit saw growth in Microbiology. The Biosciences business unit also registered continued double-digit growth in Research Reagents.

In March, BD received the FDA’s 510(k) clearance for the BD Vaginal Panel on the BD COR System.

In February, BD received the FDA’s approval for the BD Onclarity HPV Assay to be used with the ThinPrep Pap Test.

Price Performance

Shares of BD have gained 0.1% in the past year compared with the industry’s 10.2% rise and the S&P 500's 6.9% growth.

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Zacks Rank & Key Picks

Currently, BD carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Hologic, Inc. HOLX, Merit Medical Systems, Inc. MMSI and DaVita Inc. DVA.

Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hologic has gained 3.5% compared with the industry’s 3.2% rise in the past year.

Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.

Merit Medical has gained 40.4% compared with the industry’s 10.2% rise over the past year.

DaVita, carrying a Zacks Rank #2 at present, has a long-term estimated growth rate of 14.6%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 17.3%.

DaVita has gained 5% against the industry’s 15.9% decline over the past year.

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Becton, Dickinson and Company (BDX) : Free Stock Analysis Report

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