$Becton Dickinson(BDX)$ $ProShares UltraPro QQQ(TQQQ)$  $NASDAQ(.IXIC)$ $DJIA(.DJI)$  

Becton, Dickinson and Company (BD) is a global medical technology company engaged in the development, manufacture, and sale of a range of medical products. The company operates through three business segments by FY23 revenue: The BD Medical segment (49%) produces medical technologies and devices. The BD Life Sciences segment (26%) provides instruments and reagents to detect a range of diseases. The BD Interventional segment (24%) provides surgical specialty products.

Investment Overview

BD is the largest manufacturer of prefilled syringes globally and is expanding. The global shift in drug packaging devices from conventional vials to prefilled syringes is moving at a rapid pace, with the contribution of prefilled syringes to biological drug packaging expected to grow from 31% in 2021 to 40% in 2025F. BD is expected to benefit from this huge shift, as it is the global market leader for prefilled syringes. In 2020, BD announced its plans to invest approximately US$1.2bn over a four-year period to expand and upgrade its manufacturing capacity and technology for prefilled syringes and advanced drug delivery systems across its six global manufacturing locations and add a new manufacturing facility in Europe. The six manufacturing facilities that would see a portion of this investment are in Nebraska, Mexico, Japan, France, the United Kingdom, and Hungary.

Second largest player in China. The growth in the prefilled syringe sector is strongest in China, where BD is the second largest player. BD is well positioned to ride on the biologics uptrend in China, and is expected to benefit despite a limited increase in investments in China's manufacturing capacity.

Beneficiary of weight loss drug trend. Weight loss drugs commonly known as GLP-1 drugs have skyrocketed in popularity due to their high efficacy and usage for Type 2 diabetes, heart disease and chronic kidney disease. Positioned as one of the largest pharmaceutical packaging players worldwide, Becton Dickinson will undoubtedly ride on the weight loss drug trend driven by the increased interest in GLP-1 drugs.

Net margins increasing. With the pandemic subsided and COVID-19 vaccine drive mostly faded, BD’s capacity has freed up and can focus on more expensive orders that had been delayed due to the COVID-19 vaccination need. Net margins have improved from 5.4% to 7.7% in 2020-23, with net margins expected to increase in the future following further penetration of high-quality packaging materials for GLP-1 drugs which would likely sell for a high margin.

Rise in competition in China. With the Chinese Government putting emphasis on domestic medical device and drug manufacturers, BD may be at a disadvantage and see its market share being taken over by Chinese competitors.

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