Lisa Carmel 0:05
Good evening, everybody. I have the privilege to speak to Dave Hickey this evening. And I would love to start off with asking you how you got started in med tech.
Dave Hickey 0:22
So Lisa, it is. It is great to be here. And I think over my 40 years in the industry, I've done a lot of fireside chats and a lot of keynotes. I think this is the venue. This is just awesome. But just to start, so this will probably this will certainly date me. And I depending upon the audience reaction, I think it was out of date. The audience too. So I started when when I was in the UK, I fell in love with a program called Quincy MD on television on television. So Jack Klugman was this pathologist, he worked in a hospital, I actually had no intention or sort of desire that I wanted to go into autopsies and things but the discipline of pathology. And you know, what they did on Quincy was the real start. And that got me sort of connected to careers counselor. And ultimately, I went to do Clinical Biochemistry at Manchester University.
Lisa Carmel 1:20
Wow. And then, and so what was your first job in med tech?
Dave Hickey 1:25
So after doing the good thing about working in the UK NHS is they have a rotational program. So after doing sort of pathology or Clinical Biochemistry in Manchester, I got a job in a local UK Hospital in the NHS. And the first two years actually you spend doing a rotation. So you know, I did sort of six months of hematology, six months of biochemistry, six months anatomic pathology, and a little bit of microbiology. But that time, it became very clear to me that biochemistry was the field that I wanted to do just because of the endocrinology and things like that. So I started in a lab in the north of the north of the UK, just between Manchester and Liverpool and added seven years as a clinical biochemist.
Lisa Carmel 2:14
So tell us more about how you you your journey into med tech and and to then your journey here to the United States.
Dave Hickey 2:24
Yeah, Journey to the Unite Yeah, so as the audience can tell. Although I live and work in Baltimore and run Becton, Dickinson life sciences from Baltimore, I am not a native Baltimorean. But I came to the US in 2003. So the very quick journey was one of first seven years after graduating in the UK NHS. I then went actually to work for Bayer diagnostics, did sales, marketing, product management. And then I did a variety of roles in the UK and Ireland for Bayer. And at the time I was in 2003, I got the opportunity purely from a personal development perspective to come to the US because although I was working for Bayer in the UK, the global headquarters was in Tarrytown, New York. So part of my personal development was to go and do a global role. So I came over to really be the Global Head of Marketing for Bayers immunoassay business at that time, with the with the goal of actually then going back in 2006, to a broader or bigger bear role. But back in the UK and Ireland, but But as many of this team and audience will know. In 2007, there was a due diligence activity of Siemens healthcare looking to get into IBD and looking to get into diagnostics. And I got on that due diligence team that m&a went through. So Bayer divested Bayer diagnostics into Siemens, and through that m&a in 2007, I got a chance to localize and then sort of take a senior role in the new Siemens healthcare diagnostics. So we've been in the US 21 years now.
Lisa Carmel 4:13
Wow. And so you, you didn't really think you're gonna be here that long? I
Dave Hickey 4:18
did not know. It was funny. My wife was actually a general practitioner in the UK at the time, thinking that we were here for like a three year rotation. She, she just sort of put her practice and did locums and things like that. But then obviously, when we decided in 2006 and seven to stay, then obviously she saw the practice. Honestly, the children were well settled at school. And, and we've never looked back. It was a great, great opportunity.
Lisa Carmel 4:46
So So what was that what happened next? What's after Siemens? Yeah,
Dave Hickey 4:50
so So I was really so if I think about the continuity of Bayer Siemens, from the time I started with Bayer until I left Left Siemens in 2014 to go to BD. So I was 21 years with Siemens. At the time of leaving Siemens, I was the CEO of the central lab IV D business, the diagnostics business. And then in 2014, I was hired into BD. And the two things that really to me from a Becton Dickinson perspective that were sort of enticing or intriguing about that, that opportunity. One was, I'd never really done a lot of infectious disease diagnostics. And before I took over his life sciences, I really came in to run the diagnostics business, or the microbiology piece of that. So it was a great learning opportunity for me to apply sort of Executive General managerial skills, but to an area of lab medicine that I had never really studied or worked in. And then also BD had made an acquisition of some microbiology lab automation, back in 2012, which just really needed some optimization. And again, for many of us that have been in the major lab automation Arena for many, many years, you know, lab automation outside of micro started in 1998. So microbiology was a bit of a Lagarde. So part of my role was to come in and optimize the automation business. Yeah.
Lisa Carmel 6:20
Now, I was just gonna say, in in your, your role, you're seeing quite a quite a few driving trends that are that are affecting the market. Do you want to talk about that?
Dave Hickey 6:35
Yeah, for sure. So I think before I do just just a little bit of context on Becton Dickinson overall, for the members of the audience that don't know BD. So, you know, I'm very privileged to run the life science segment. But if I take a step back, BD is about a $20 billion revenue company, about 70,000 people around the world. And we operationalize ourselves into three operating segments. So we have life sciences, which for me is the diagnostics business, the pre analytical business, and biosciences which is primarily centered on flow cytometry, there is the medical segment, and then there is the interventional segment. So the medical segment basically was a result of the CareFusion acquisition in 2015, the BD did. And then the interventional segment was really the result of the bard car bought acquisition in 2017. So at the highest level, BD is 20,000,000,003 segments. And then each segment has got three, three business units. So there are nine business units that make up the operating entity. I took over life sciences in 2021, which is no diagnostics, pre analytical and biosciences. From a size and scope perspective. It is close to 15,000 people worldwide. And it is about five and a half billion in revenue, right? And we do the entire value chain of innovation. You know, scouting technology, m&a, feeds the innovation funnel manufacturing commercialization. Right.
Lisa Carmel 8:12
Great. And then and so now. Yeah, so now.
Dave Hickey 8:17
So if you look at BD one of the things that we always say about about Becton Dickinson is it really is a significant part of the backbone of healthcare. So if I just look at the United States, for example, BD is present in over 90% of healthcare systems of hospitals. So there's a significant durability to what BD does. But as we've taken a step back and looked at how will health care be delivered going forward? We've really identified and this is really coming out of, I would say, the back of the pandemic, we think there are three major trends, what we call transformative forces, that are going to shape the way healthcare is delivered going forward. And the nice thing about these three trends, at least from BDS perspective is not only do they have applicability to life sciences, but they've got applicability to all of the segments and all of the business units. So the first of those three trends is what we call smart connected care. And it really is a premise that is based on the ever increasing role of robots, digitalization AI. The one example I would give specifically within Life Sciences. If I think about the pathology lab, where you know, from a staffing perspective, there is real sort of significant labor arbitrage. So a lot of med techs that work make medical technicians that work in a lab. Actually a high percentage of retirements eligible, the medical technology schools that have They're meant to then be the feeders to replace those associates. There are less and less medical technology schools. But the labs have a workload that is increasing at like eight to 10% per annum. So the demand for automation, track based automation, artificial intelligence to look at rules based algorithms to disposition results and things like that, we see that trend for smart connected care, as being a big driver, many of the labs that I that I deal with have this concept of what they call a lights out laboratory, how can they run the work that they need to run, but with as few staff as possible, and staff that do remain, they then want to deploy on to more value added tasks, adopting and setting up new technologies. So that's the first trend. The second trend is one of what we call migration to new care settings. In fact, I was I was at a couple of the sessions earlier today. And there was a lot of dialogue around, you know, the alternate sites of care and the ASCs. And I think one of the things that we're seeing definitely on the back of the pandemic, is that this migration to healthcare delivery outside of the hospital, it's interesting, you know, BD, we're very far given sort of maybe to two anecdotes here is, we're very much focused on the hospital at home. And it's interesting, because when you think about the pandemic, when all the hospitals had the sort of, let's say that the beds filled with critically ill patients, they still had to figure out how to run and serve a patient population and in very much a decentralized setting. And if you look at the growth in hospital at home right now, you know, I would say since 2020, there's been a five fold increase in the number of Medicare approved hospitals that are now driving hospital home strategies. You know, there's about in the US alone, there are 300k, hospitals, this across 37 states 129 health care system. So I think the demand for hospital at home, whether it's blood collection, diagnostic testing, home based infusion, Home Base catheterization, fluid management, that is a wave that is starting, and then certainly in life sciences, and when I think about diagnostics, the ever increasing role of point of care, again, many, many sessions on point of care today. And you know, and I think, you know, there are different phases to point of care. So we think of point of care as being done in an ICU or an ER, maybe our primary care facility, but we're starting to see retail, pharmacy and retail, you know, retail stores adopt point of care testing, on the back of COVID, there is definitely going to be more and more tests, the right sort of test that gets done at home. And then the final trend is improving chronic disease outcome. I think at the end of the day, all of us are in this industry to have a positive impact on on the patient outcome and the patient life and the quality of life. And if you think about things like cancer and oncology, there is so much cost consequence and cost burden with the sort of stage three stage four chronic diseases, with the advancement of new innovation, new technologies, you can how do we left curve shift the cost equation. So now when I look at things like sequencing technologies, the ability to detect and screen for disease earlier, anything that we can do to earlier detect, treat, diagnose, you know, chronic diseases can only be for the better. So chronic disease outcome is a big third driver.
Lisa Carmel 13:46
Any examples you want to provide? Yeah,
Dave Hickey 13:50
so I think the two examples that I would give, or the one example I would give for, let's say, chronic diseases, is really around something like cervical cancer, and the role of HPV and maybe we'll talk about this a little bit later on, too. But one of the one of the other things that we're very focused on, is how we think about the role of health equity, and health access. You know, when you think about something like cervical cancer, and you know, it's very much, it's still a significant killer. It's actually very much a preventable disease. Yet, even here in the United States, as the guidelines move towards something like HPV as the primary standard of care, there are still one in five eligible females that never get screened. And there are even based on the most recent data through about 23% of females that are overdue for the follow up screening cycle. And when you start to dig into that, and you look at the drivers of that, one of it is that there's actually they're sort of fearful of just the the invasion effectiveness of the collection procedure by somebody else. So you know, one of the things that actually, you know, we're working on, we've already sort of deployed this outside the United States, but our self collection strategies, because if we can reach the people that don't get screened, and we can do that through a self collection strategy, where a female can literally win simple instructions for use, actually sort of take a take a swab at home, mail it into a testing laboratory, then I think the chances of again into you know, minimizing the impact of the disease is going to be huge. One other example I will give is in the field of blood collection, there's been a lot of a lot of innovation recently on capillary placed blood collection. And the stat that I would share with this audience is, if you look at just over 65 year olds in the United States, there's about 22 million individuals that never get their blood tested. And the breakdown of that is about 10 million, will go and see the physician for their annual sort of annual screen, they'll get the blood testing script, but they'll never get it followed on the other 12% Just never go and see their physician at all. And again, one of the big drivers there is an absolute fear of venipuncture. So people are scared about putting needles into their arm. So you know, BD recently, we had an innovation cleared in December. We're now in a very decentralized setting, by not necessarily a doctor or a nurse. And we're seeing this is where we're starting to see retail pharmacists look for other sources of income of visiting nurse services to home that you can actually know do lab based quality diagnostic testing on a very small amount of capillary blood. So that's an example where we are decentralizing again, the migration to care settings, but it feeds an ecosystem, because imagine those individuals know, do get their blood tested. And you're starting to pick up things like hyperlipidemia, and diabetes and heart disease, it also feeds the benefit of impacting chronic disease outcome. Now,
Lisa Carmel 17:19
how are there other ways that BD is building and reshaping its business? With these trends in mind? Yeah,
Dave Hickey 17:28
so So one of the things that we've actually done is we're starting to over index, where we want to put our innovation dollars, we're also starting to over index on how we think about the m&a funnel or inorganic opportunities. And what we're trying to do is, as I said earlier on is there's a significant piece of beedis business, that is what we call a durable call, you know, we manufacture 10 billion blood collection devices a year, we manufacture billions of syringes a year, that is never going to go away. But it's, you know, they are slower market growth categories. So when you look at these transformative trends, they're starting to operate in market segments and categories, where the growth rates of those technologies or those applications are high single digits, or low double digits, or if not greater, that's become a big area of focus for us. So as we think about r&d dollars, and we think about the what we call the one bar or the weighted average market growth rate of a certain category, if there is a, there's a organic or inorganic opportunity that fits those transformative areas. That's where we'll spend the majority of our focus, right.
Lisa Carmel 18:51
So I think there's a lot of startups here. Yep. That are looking for partnering. And they'd probably like to know, how does BD approach m&a, and partnerships with respect to these new areas? That's great.
Dave Hickey 19:10
So yeah, so I mean, obviously, BD is a major strategic strategic, and I think a lot of other multinationals, we have a lot of opportunity, and we get a lot of what we call inbound. So obviously, for us, and it was made actually in a presentation earlier today, where you tend to find that these strategics and the multinationals were pretty risk averse. So I would say to the CEOs of the startups is if you're going to approach a strategic, really take time and effort to understand their strategy, you know, we're our areas of strategic focus. You know, every company like BD has what we call these hunting grounds. So we know what's going to change healthcare. We know where we We want to spend our acquisition dollars our r&d innovation dollars. So I would say, you know, take time to understand our areas of strategic focus, to the extent that any sort of startup company can present meaningful data, you know, because obviously, depending upon where a startup is, on its side sort of phase in its cycle. Some of them are data rich, some of them are some lacking data. Normally, if some of the startups are lacking data at that time, we'll sort of we'll want to maintain a relationship, but we'll maybe put it more into a watch and wait, I would encourage the CEOs of the startups to be very clear on their own strategy. So you know, are you pursuing an exact exit strategy? Or are you pursuing commercialization. But I think anytime that you can approach somebody like BD somebody like my life science team, and you've been able to de risk, the technology that heightens that the attractiveness of that of that technology for coming into BD, I would say we'll look at start, you know, we do a lot of startup work. I would say, if I think about BD overall, one of the sweet spots that we have, are technologies that are a really cool strategic fit for us. There may be just pre revenue or early revenue, but then we can bring globalization and scale. Right.
Lisa Carmel 21:22
So you've had many interesting acquisitions and investments. Is there any you would like to highlight, for example?
Dave Hickey 21:32
Yeah. So I mean, I think, you know, one of the questions I often get is, and forbidding overall, is how do we think about our acquisition strategy or investment strategy. And one of the things that we've been very public on, particularly after we acquired Bard and confusion is, you know, over a couple of over a couple of years, BDS posture was to do more of an m&a strategy that was like multiple, multiple tokens. And, you know, over the last, I want to say maybe 1824 months, we did like 19 acquisitions. We're changing that posture now. Because even though each of those acquisitions were relevant, it's still the complexity of an integration. So you've got to, you know, you've still got to think about r&d, synergies, Salesforce, synergies, ERP systems, quality systems, regulatory systems. So what we're doing right now, and I would say, the parotta, pharmacy automation was a good example of this. If you think about BD as having something around maybe 2 billion of cash to deploy on an annual basis, we are no more favoring a one to a one and a half billion still a token, it's not transformative, but a one to a one and a half billion, with them more, maybe four to 500 million of 2 billion left on a few smaller tokens. So that's on the m&a piece. On the equity piece, we do that as well. You know, so for us in life sciences, we typically will not do equity, just purely to get a financial ROI. It's more on what we would call the bill to buy model. And then we'll do two things, we will either put an equity stake in one that we did was around Day Zero diagnostics, and which is a rapid ASD, next gen sequencing platform. And in those sorts of situations, the company still runs the company, but then we would take something like a board observer position, which we did in this in this last row with them, so that we can help stay connected. So we'll do equity typically would result in a board observer position. And with that board observer, we can still help provide the guidance for the types of data that we'd want to see, you know, we've got a lot of global knowledge in terms of the trends that are happening in these technology spaces. And we're able to share that with the team.
Lisa Carmel 23:57
And I think we're near the conclusion here. There's a lot of startup CEOs in the audience. Do you have any advice for them? Any? What's Watch out best ways to partner? Yeah.
Dave Hickey 24:15
So So I think we talked about it a little bit earlier on as part of one of the as part of one of the questions but what I would say from and I'm sure a lot of the CEOs are all over this already in doing this is so just from the board work that I do and the engagements that I sit on when you think about the the technology or the platform or the product that you're trying to commercialize and develop, do a lot of work to anticipate what's the trend in healthcare at the time of your perceived launch. So not what you're developing today. But is it still going to fulfill a meet that unmet critical need clinical need, you know, through Two years from now, four years from now, five years from now, think about the space that you're in or that you're getting into, and make sure that the board and the board makeup, you know, what, from an advisory perspective has got the right skill set the right caliber, the right experience to guide you along the way. And then I think, you know, if this time was a potential partner in discussion with a strategic like BD, wait, you know, with a multinational, then for me, the two biggest guidances are be as data driven as you can when you come to talk to us. And, you know, to what extent can you articulate how you've de risked the technology? You know, and then I think, you know, and then the conversation goes from goes from there.
Lisa Carmel 25:49
Well, thank you so much, Dave Hickey, and it's been an absolute pleasure, and we very much appreciate you having you here. Lisa, thank
Dave Hickey 25:58
you very much. Really enjoyed it. Thank you. Bye bye.
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