BD (NYSE:BDX) announced today that the FDA granted 510(k) clearance for its updated Alaris infusion system.
Shares of BDX closed out Friday evening priced at $264.84 each. They ticked up significantly after market close on the back of the Alaris news, rising 5.9% to $280.40 apiece.
Clearance enables both remediation and a return to full commercial operations for the previously maligned infusion system. It covers updated hardware features for the point-of-care unit (PCU), large-volume pumps, syringe pumps, patient-controlled analgesia (PCA) pumps, respiratory monitoring and auto-identification modules.
The updated clearance also covers a new software version with enhanced cybersecurity, plus interoperability features. These enable smart, connected care with the most widely used electronic medical record (EMR) systems.
“The 510(k) clearance of the updated BD Alaris infusion system has been the number one priority for our teams who have been steadfast in their efforts to achieve this milestone, consistent with our commitment to quality,” said Tom Polen, chair, CEO and president of BD. “We are deeply committed to ensuring clinicians can continue to rely on our market-leading system to meet today’s most critical infusion needs.
What led to the updated Alaris clearance?
Remediation, resumed commercial activity and updated cybersecurity features mark major steps forward for the BD Alaris system.
In early 2020, the company initiated an FDA Class I recall for the infusion pumps. The recall centered around multiple system errors, software errors, and use-related errors. BD cut its financial outlook for that year after it enacted a hold of new shipments of Alaris pumps. The company applied for a new FDA clearance for the pumps in April 2021. It started a remediation effort in July 2021.
In August 2022, a federal judge in New Jersey ruled that a lawsuit against BD over how it communicated company performance amid its Alaris problems may proceed.
Then, earlier this year, BD issued a voluntary notification regarding cybersecurity vulnerabilities with its Alaris Infusion Central software. Just last week, the company issued another notification, this time warning on eight cybersecurity vulnerabilities.
“The features and enhancements incorporated into the updated BD Alaris infusion system and subject to this clearance reinforce our advancements in smart, connected care, which deliver greater benefit to clinicians and patients and help improve healthcare system efficiency through better care coordination and utilization of actionable information,” Polen added.
More about the BD Alaris system
BD says Alaris is the only system with a centralized user interface for up to four modules for all major types of infusions. That includes large-volume pumps, syringe pumps and PCA therapy with optional respiratory monitoring.
With one comprehensive infusion system, hospitals and health systems can easily scale their infusion needs across a delivery network. They can also enable interoperability with EMRs. The common PCU allows the lone interface to control all modules, making Alaris different from other pumps with non-modular architecture.
According to BD, Alaris also has the largest breadth of customers, nurses trained on its use, experience and customers with EMR interoperability. The digital connectivity can help alleviate an often time-consuming process with multiple steps needed to manually program infusions.
Alaris can also feed data to the BD HealthSight platform for enterprise medication management. This combines connective technologies, analytics and expert services, turning information into insights. It enables real-time viewing of infusion status and access to a knowledge portal with actionable information related to trends and drug and fluid libraries.
“We are so grateful for the fact that for more than two decades, frontline clinicians have relied on the BD Alaris infusion system and Guardrails safety software to deliver medications, fluids and blood products to support the care of their patients,” said Mike Garrison, president of the BD Medical segment. “Today, a majority of hospitals in the United States use the BD Alaris infusion system to safely deliver IV therapies to patients, and this comprehensive clearance provides a foundation to support a steady, reliable cadence of innovation in infusion technologies from BD. The clearance also marks another major step in our journey to support our customers with deep clinical, operational and technical expertise in infusion therapy, vascular access and connected medication management.”
More on the remediation efforts
BD intends to address all open recalls by remediating or replacing all current U.S. Alaris devices with the updated version. Given the large installed base, BD said it plans to actively engage and start working in close partnership with its customers.
The company said it had been preparing for the updated clearance and return to full commercial operations by investing in operational capacity and functional capabilities. That includes investments to increase manufacturing capacity, strengthen supply chains and increase supplier redundancy. This aims to help meet remediation obligations and continue to reliably supply infusion products to customers.
BD also said it retained its infusion implementation and service terms during the shipping hold.
“Remediation of recalls will always be a top priority for BD, and our remediation plans go above and beyond all open recall requirements to ensure all devices are compliant with the 510(k) clearance, including the newest hardware, software and cybersecurity updates,” said Ami Simunovich, chief quality and regulatory officer at BD. “We have made substantial investments to simplify, improve and evolve our processes, systems and policies to ensure we design, manufacture and sustain our products in compliance with changing global regulatory and safety requirements. We remain committed to delivering next-generation quality and compliance to our customers.”
BD updates its business outlook
With a return to full commercial operations and sales in the BD infusion business, the company said remediation or replacement takes first priority. It expects the return to full operations to happen over time.
Despite its positioning to engage and execute on this as quickly as possible, shipment and installation time remains dependent on customer readiness. BD expects to begin shipping devices and recognizing revenue in fiscal 2024. The company does not expect any material incremental revenue contribution from Alaris across the remainder of fiscal 2023.
BD also expects initial investments to return to full commercial operations to be absorbed within its previously announced 2023 guidance.
The company said the clearance and return to full business increase its confidence in achieving previously disclosed financial targets. BD wants more than 5.5% revenue growth and double-digit adjusted EPS growth by 2025.