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C.R. Bard (NYSE:BCR) makes consumable medical products used for surgical, diagnostic, and patient care purposes. It specializes in the vascular, urology, and oncology markets. These products are typically discarded after a single use. BCR markets its medical products in more than 100 countries. It generated 69.6% of first nine month 2008 net sales in the U.S., 18.6% in Europe, 5.1% in Japan, and 6.7% in all other regions.

Urology products accounted for 28.6% of first nine month net sales. Its best-selling product is the Foley catheter. Other products include surgical slings for treating stress urinary incontinence, natural and synthetic devices for treating pelvic floor and vaginal prolapse, devices and radioactive seeds for treating prostate cancer, urine monitoring and collection systems, ureteral stents, and devices used in ureteroscopic procedures and stone removal.

Oncology produced 26.6% of sales. Products include specialty access catheters, ports, vascular access ultrasound devices, and enteral feeding devices. Specialty access products are used in chemotherapy. Vascular products generated 26.1% of sales. They include minimally invasive endovascular products such as percutaneous transluminal angioplasty catheters, guidewires, introducers, peripheral stents, stent grafts, vena cava filters, and biopsy devices. Electrophysiology products include laboratory systems and electrode catheters. This segment also makes fabrics, meshes, and implantable vascular grafts.

Surgical specialty products produced 15% of sales. They include patches and fixation systems used in hernia and other soft tissue repairs, irrigation devices for orthopaedic, laparoscopic, and gynecological procedures, and products for topical hemostasis. Other products used for irrigation and wound drainage accounted for 3.7% of revenues.

BCR has been growing organically and with the help of acquisitions. A year ago, it acquired the stent business of Edward Lifesciences. Last June, it acquired Specialized Health Products International, a maker of vascular access products.

Q3 net sales increased 13.2% year-over-year to $616.8 million. Oncology and vascular product sales increased 20.2% and 19.8%, respectively, but all product categories reported gains. The gross profit margin improved 39 basis points to 61.17%. The operating profit margin expanded 120 basis points to 26.20%. Pro forma net income grew 14.2% to $112.4 million or $1.10 per share.

Because BCR relies on third-party payers such as government programs, private insurers, and managed care plan providers, unfavorable changes in reimbursement policies would hurt sales and profits. However, most of the company’s products are used in non-elective medical procedures, which make the company resistant to economic cycles.

Growth will be fueled by favorable demographic trends and new product introductions. In October, BCR won FDA approval for the Flair Endovascular Stent to treat patients undergoing dialysis bypass grafts. Management believes there are currently over 300,000 U.S. patients who rely on these grafts. In December, the E*Luminexx Vascular Stent won approval to treat patients with common or external iliac artery occlusive disease. Management expects the potential patient population for this procedure to grow at a 10% annual rate.

Source: C.R. Bard: Going for Growth