Becton Dickinson’s 24bn USD acquisition of U.S. peer C.R. Bard, as reported by Reuters, has secured its position as one of the top 10 global healthcare companies in terms of both revenue and innovation. Although the combined company will still wield a smaller patent portfolio than the industry giants, the average quality of the portfolio is significantly above average, surpassed only by Johnson & Johnson. This high quality means the combined entity now has 6th strongest portfolio in the field of healthcare, as defined by ip-search a division of the CHPTO, out of the top 30 medical device manufacturers, by annual revenue reported in MPO magazine.
Pre-acquisition Becton Dickinson had 1794 patents with an average quality of 3.5, measured by Competitive Impact, and Bard had 937 patent families and an average quality of 2.8. Bard does have a lower average quality than Becton Dickinson, however this is still significantly above the global average of 1 and the peer group average of 2.7. This will leave the combined entity with an average quality of 3.3, as measured by Competitive Impact.
Becton Dickinson owns 6th strongest Patent Portfolio in the field of healthcare
Becton Dickinson is the company most cited by Bard in terms of Patent Asset Index™, indicating a strong relationship in the direction of research of the two firms. Both firms have significant portfolios in the field of catheter products, IPC sub-group A61M 25, however the Federal Trade Commission instructed that this business should be divested to Merit Medical before the acquisition could be approved. This may temporarily improve commercial competition, however in the longer term may also reduce innovation in this area from Becton Dickinson and likely has not given Merit Medical the tools to compete effectively in this field in terms of innovation.
Patent portfolio strength’s correlation to Annual Revenue
In the field of Healthcare there is a clear relationship between Portfolio Strength (measured in Patent Asset Index™) and Annual Revenue, with companies with greater Patent Asset Index™ also yielding greater revenues. Whilst a clear correlation exists, merely having a stronger portfolio does not automatically result in greater returns, effective utilization of the assets in the portfolio must also be present.
Arguably the likes of Becton Dickinson are more fully utilizing the assets available to them to gain greater revenues than others with greater Patent Asset Index™. Driving forward in terms of patent strength and annual revenue, now #6 in terms of both, it is likely the upward mobility of Becton Dickinson will not end here.