Patrick Wood: Brilliant. And then maybe quickly one either you, Tom or Dave. Elience, Molecular Point-of-Care is obviously a very fast growing but very competitive market. Just curious, how you’re seeing that product fit in, the interplay between like high and low plex? Just curious, how you’re going to fit into that market? Thanks.
Tom Polen: I turn that to Dave. Thanks for the question, Patrick.
Dave Hickey: Thanks, Patrick and for picking up on Elience. Just take a step back. If you look at the molecular dynamics overall, we have said that this is one of the sort of six growth drivers for BD, right? So, we continue and if you look at the divergence of the market, there is real thesis playing out in terms of the way customer evolution will happen, right? So you think about the centralization of high-volume molecular cervical cancer testing, we satisfy that with BD COR. You think about BD MAX in the acute setting, and we’re seeing good, as you heard Tom say in the prepared remarks, good double-digit growth there. But clearly, there is decentralization of relevant testing to the point-of-care and these new care settings.
And obviously, Elience will be our entry there in this sort of high, you know, single-digit market. If I think about it specifically on Elience, the way to think about it is, what is different about it? Our goal here will be that we would anticipate it to be CLIA-waived giving critical results, within less than 15 minutes but can be used in a wide variety of settings. What is the unmet need that it will actually address and deliberately, we’ve actually selected CT/GC as our first assay because when you look at all the CDC and NIH reports, there is an increasing burden of STI. So, it will increase access to testing. And I think about it now, if you’re one of those unfortunate patients and you’re in the clinic, you could get that result diagnosed and a potential treatment administered while you’re in a clinic in a decentralized setting.
So, deliberately, we think CT/GC is really the right assay to lead with. And then, of course, because of the capabilities and these less than 15 minute results, we see a strong roadmap behind it, you know, focused on respiratory assays, other STI assays, vaginitis, etc.
Tom Polen: Yeah. That testing treat concept with 15 minutes or less time to [Multiple Speakers] core component.
Patrick Wood: Love it. Thank you.
Tom Polen: Thank you.
Operator: We’ll take our next question from Patrick Miksic (ph) with Barclays. Please go ahead. Your line is open.
Tom Polen: Good morning, Patrick. Sorry, Matthew.
Matthew Miksic: This is Matt. It’s okay. Just a couple of follow-ups on some of the factors that, play through Q1, you talked about last quarter and I have one follow-up. One was, obviously, a lot of detail and questions that came after around the peso and around wages. If you could just sort of — you know, It sounds like you’re most of the way through that and during Q2 and just maybe a quick update on that. And then the anti-coagulation business in China. I think there was something that you were hoping was going to find — that capacity would find a new home, perhaps in this quarter or next quarter and an update on that. And then just one follow-up if I could.
Christopher DelOrefice: Yeah. It’s Chris. Thanks, Matt, for the question. Appreciate it. Yeah, when we started the year, we talked about kind of the inflationary dynamics and supply-chain. One of the biggest ones that we were still seeing play out through the year was wage dynamics in our supply-chain organization, that continues but it’s playing out as expected. So, nothing new there. Regarding FX, good news is moderately favorable. We passed through both the revenue and earnings on that. So, stable at this point and moving in the right direction. We’ll continue to watch it, and I think we’re happy with the operational performance in passing through both the $0.07 operational beat and the $0.02 of FX.
Matthew Miksic: And maybe Mike for pharm systems.
Michael Garrison: Yeah. For pharm systems, that the capacity that’s freed up for anti-coagulants, there is, some of it where the teams are, hunting for home for that. And there’s been some success there, but I think we also just took a strategic decision to look at the anticoagulant market overall and it returning to more of a post-COVID normalization there and our converting lines over to biologics to help accelerate our ability to have capacity to serve in that area and that’s playing out pretty well. So, we’ve been able to — there has been some increased demand that’s come in for biologics that, we’ll be able to recognize later in the year and then, we’ll be able to serve that, in part because of these line conversions. So, it’s been a little bit of both relative to that anticoagulant dynamic.
Tom Polen: Thanks for the question, Matt.
Matthew Miksic: That’s super helpful. You bet. And just one follow-up if I could on cash flows and sort of M&A and I remember last quarter, Chris, you emphasized a bunch of times, and part of that impact was, bringing up excess inventory having an impact on margins, you threw that you made nice progress on leverage. Could you talk a little bit about, what that looks like for the rest of the year, drove M&A outlook and the kinds of things, maybe the size of things that you might be — we might expect in the next, six, 12, 18 months. Thanks.
Christopher DelOrefice: Yeah. Thanks for the question, Matt. I appreciate you recognize. We’ve definitely been extremely focused on cash flow performance. I was really pleased with the quarter. There was really strong cash flow, strong double-digits, gives us confidence for the year. It played out in all the areas we’ve been trying to leverage. One, we’re getting more efficient with our CapEx expenditures. Part of this is from a simplification efforts on BD Excellence that we’re driving through our plans. In addition, you saw improvement in inventory and you saw improvement in our collection cycle as well. So, all really positive things. We sit basically at our net leverage target and so we’re well positioned and consistently will remain disciplined as you think of M&A, but as you can imagine, we always have an active portfolio of things that we look at.
We’re going to remain disciplined. It’s been a nice contributor organically to growth last year, delivered nearly 40 basis points. So, certainly something that we’re going to continue to focus on as part of our growth strategy and more to come on that. Tom, I don’t know if you want to add?
Tom Polen: Extremely well said. Remains an active part of our growth strategy and I think as we’ve shared in the past, we’ve been focused on accretive growth, accretive margin acquisitions, which has been our track record and we’ve executed well against those over the last several years. I think we’ve clearly built a good track record of that. And so, we’ve got a strong healthy M&A, you know, active pipeline focused again in strategic areas where the market has significant structural or macro tailwinds to drive sustainable growth and where we can bring meaningful additional value either through our channel or global footprint, our manufacturing prowess. And again, we remain very disciplined on strong returns accretive growth. We haven’t been doing dilutive deals that remains, right? Our emphasis is we’re focused on delivering on our 25% operating margin goals. And but we’re going to continue to focus on that and we have a strong pipeline. Thanks for the question.
Operator: And this time, I’ll return the call to Tom for any closing comments.
Tom Polen: Thank you all for joining our call. As you heard, we had good momentum to start the year and we look forward to sharing our progress towards delivering our BD 2025 goals and increased outlook for FY ’24 on our next call in May. Thank you very much and have a great rest of the day.
Operator: Thank you. This does conclude today’s program. On behalf of BD, thank you for joining today. Please disconnect your line at this time and have a wonderful day.
