Hello, and welcome to the BD's Third Fiscal Quarter 2019 Earnings Call. At the request of BD, today's call is being recorded. It will be available for replay through August 13, 2019, on the Investors page of the bd.com website or by phone at 800-585-8367 for domestic calls and area code 404-537-3406 for international calls using confirmation number 1475284. I would like to inform all parties that your lines have been placed in a listen-only mode until the question and answer segment.

Thank you, Lori. Good morning, everyone and thank you for joining us to review our third fiscal quarter results. As we have referenced in our press release, we are presenting a set of slides to accompany our remarks on this call. The presentation is posted on the Investor Relations page of our website at bd.com. During today's call, we will make Forward-Looking Statements, and it is possible that actual results could differ from our expectations. Factors that could cause such differences appear in our third fiscal quarter press release and in the MD&A sections of our recent SEC filings. We will also discuss some non-GAAP financial measures with respect to our performance. Reconciliations to the GAAP measures that include the detail of purchase accounting and other adjustments can be found in our press release and its related financial schedules and in the appendix of the investor relations slides. A copy of the release, including the financial schedules, is posted on the bd.com website. As a reminder to provide additional revenue visibility, we will speak to our fiscal 2019 third quarter revenue results and fiscal 2019 revenue guidance on a comparable currency neutral basis. The comparable basis includes BD and Bard in the current and prior year periods, and excludes intercompany revenues and revenues associated with divestitures among other adjustments. Leading the call this morning is Vince Forlenza, Chairman and Chief Executive Officer. Also joining us are Chris Reidy, Executive Vice President, Chief Financial Officer and Chief Administrative Officer; Tom Polen, President and Chief Operating Officer; Alberto Mas, Executive Vice President and President of the Medical segment; Simon Campion, Executive Vice President and President of the Interventional segment; and Patrick Kaltenbach, Executive Vice President and President of the Life Sciences segment. It is now my pleasure to turn the call over to Vince.

Thank you, Monique, and good morning, everyone. At BD, our strategy is driven by our purpose advancing the world of health. Our results this quarter demonstrate that our strategy is working and our core remains strong. Our progress with Bard is enabling us to deliver even more impactful comprehensive solutions for our customers. Turning to Slide 5 and our third quarter highlights. Our third quarter performance was strong, revenue growth reflects the plan back half acceleration that we have been discussing with you throughout the year. As expected, growth was broad-based and we drove mid-single-digit growth in all three segments.

Thanks, Vince and good morning everyone. Moving on to Slide 7, I will review our third quarter revenue and EPS results as well as the key financial highlights. Third quarter revenues grew 5.7% on a comparable currency neutral basis. As Vince mentioned, our strong third quarter revenue growth was broad-based and is a strong indicator of the health of the business. As we have discussed previously, there are a number of drivers across our segments that gave us confidence in our planned second half acceleration. I will provide more color on the third quarter revenue growth in a moment when I take you through the results by segment and geography. EPS is also in-line with our previously communicated expectations for the quarter. Despite significant FX headwinds in the quarter, we delivered adjusted EPS at $3.08 crossing the $3 per share mark for the first time since closing the Bard acquisition. On a currency neutral basis, EPS grew 14.8%. We also continue to delever during the third quarter, paying down approximately $450 million of debt. Gross leverage was 3.7 times as of June 30th and we remain on-track to achieve our commitment to delever to below three times over three years. Moving on to Slide 8. I will review our medical segment revenue growth. BD Medical’s third quarter revenues increased 6%. As expected performance in the medical segment was driven by continued momentum and share gains in Medication Management Solutions and strength and pharmaceutical systems. In addition, growth and medication delivery solutions normalized as anticipated and was driven by our leading vascular access portfolio, which also reflects our revenue synergy investments. Growth in Diabetes Care was aligned with our expectations driven by strength in emerging markets.

Thank you, Chris. Turning to Slide 19 in our planned product launches by segment. As we had been discussing with you, we have a very robust pipeline across the Company. There are a number of things we are excited about. I will touch on just a few recent launches here. Starting with the BD medical segments. In May, we launched the BD Pyxis ES System version 1.6, which brings software enhancements achieved through upgrades to the core ES software, as well as through system integration of three technologies. BD Pyxis ES Refrigerator, BD Pyxis Track and Deliver and BD HealthSight Data Manager. These enhancements improve clinical workflow efficiency, pharmacy flexibility and end-to-end medication safety. Regarding our health site platform, feedback from customers continues to be very positive and we are gaining traction across our applications. Before we move on to our Life Science segment, I would like to discuss the Type 2 insulin Patch Pump. As we discussed on our call last quarter, the feedback we received from the FDA was more comprehensive than we had anticipated. Based on this feedback and given the intricacies of this product category, we have decided to withdraw our FDA application and have engaged a third-party R&D partner with expertise in this space, while we work through our strategic options. As a result, our previous timeline has been extended and we will provide you with additional information as we make progress. Moving on to the BD Life Science segment. We are excited by the recent launch of BD COR, our new high throughput molecular diagnostics platform aimed at providing automation of molecular testing in core and other large centralized labs. Early customer interest and placement of our BD COR units are exceeding our expectations. We also continue to see strong growth on the BD MAX platform supported by the commercial success of recently introduced assays such as the BT MAX Vaginal Panel, as well as our Enteric Panel suite.

The floor is now open for questions. Our first question comes from the line of Kristen Stewart of Barclays.

Hey good morning everybody.

Good morning Kristen.

So I guess, just want to kind of start off with just kind of longer term expectations. I can appreciate that you guys probably don't want to give any specific color around 2020 and guidance in that respect. But having into the call I think 2020 outlook was definitely one of investor's top concerns and given the update on Lutonix below the knee and it not being approvable I think that is only to kind of increase the concerns on the street. So I was wondering, if you could just maybe help provide your thoughts on puts and takes for how we should think about fiscal year 2020. I know that you had talked about the deal model being in kind of mid-teens growth. Obviously, there has been some changes with the Lutonix, but also Gore royalty is just how should we think about that in the year ahead and the puts and takes? Thanks.

So Kristen, thanks very much for the question. I have to say. We are not surprised to get the question on surprises, you have to write off if that. But let's get it on the table. We are making good progress and 2020 is what I want you to know and everyone to know. We are making good progress on the budget. We are a little early on, we are not finished yet. But with knowing that we had a Gore royalty going away, we started this process earlier. And I feel really good about the process that we are running and the progress we are making there. So with that, I'm going to turn it over to Chris, he is going to give you a little more detail. We are not going to completely guide today. But we will give you a good sense of the progress we are making.

Sure. Thank Vince and good morning Kristen. You know you are right, it's too early to give a level of precision to guidance for the next year, there will be some things that we are watching. But what I would say is that the message essentially remains the same as last quarter with the one exception being BTK. But if you think about it on the revenue side, we still expect to drive 5% to 6% growth for 2020. Despite the DCB status quo and the BTK delay, so we will still be able to drive that 5% to 6%. And then on EPS, at worse the BTK impact even if we don't have it for the full-year is about 1%. And we would intend to mitigate as much of that as possible. A little bit of pressure on FX, but we will watch that. But despite all of this, barring anything that unforeseen changes from here. We are very confident in our ability to deliver double-digit earnings growth next year. Where we are in that double-digit will depend on things that transpire between the next couple of months. So, but we feel good with that floor of double-digits. And we will see where BTK plays out where FX goes. But everything else is pretty consistent with what we have said before.

So all-in-all good progress, and maybe I will just ask Simon to comment. Simon you know, you are having some really good performance on some new products that give us this confidence on the 5% to 6%. So maybe you want to talk about some of the other products that are off setting some of these things in the DCB area.

Sure Vice. So I think Chris already on the statements mentioned Venovo and Covera and WavelinQ within the PI business. And I'm sure you will have seen the recent Trump - on kidney disease which will only serve to help the visibility of this ailment. And another great quarter in end stage renal disease domestically and internationally. I think also very significantly to the BDI segment, is our performance globally, as we begin to leverage the scale of BD, particularly in areas where or Bard was only condensing its investment profile. So, for example, biosurgery and infection prevention in Europe had a tremendous quarter. And that was driven by the investments that we made as part of the acquisition. And urology continues to perform terrifically well, driven by home care internationally and new products domestically. And we foresee that the great progress continuing in all three businesses within BDI.

So thanks, Simon. The bottom line of what Simon is saying is we are right on the deal models and mixing new products is a little different. We didn't expect the DCB situation. But as Simon just detailed for you there is a whole series of other new products, including in urology that is going quite well. So that is enabling us to hold that guidance range. So thanks, Kristen, for the. We appreciate it.

Your next question comes from a line of David Lewis of Morgan Stanley.

Good morning just two quick once for me. One for Chris and one for Simon. Chris just thinking about the fourth quarter, you obviously maintain 25%, 26% margins, but it sort of implies 28% fourth quarter margins to get to the midpoint. So should we think about the low end of the range for the year on margins and how do you get that 2.5 point step up? And same question on growth Chris, you talked about acceleration into the fourth quarter. But it's a pretty significant momentum step up into the fourth quarter just to get to the low end of the five to six. So maybe your confidence top and bottom for the fourth quarter? And just a quick one for Simon. Post the panel and now with the BTK update. Have you made any commercial decisions about the DCB commercial organization in terms of a size, is it right size to the opportunity, and then the level of growth? Thank so much guys.

Sure I will start. So clearly, we have been saying that the revenue is going to accelerate in the second half of the year. You saw that starting to happen in Q3, we see that accelerating even further in Q4. Again, it's the continuous strength in UCC and surgery, the MMS momentum that we have. MDS is accelerating and strong growth in biosciences and DS which is essentially across the business. So we have strong confidence in that. And then on operating margins, we do see acceleration in the operating margins in the fourth quarter. Don't forget we don't have the FX drag that goes away in the quarter. We continue to see revenue synergies - cost synergies and CI continuing to build. And again, FX abates there. So we have a lot of confidence and being able to get solidly within that 25% to 26% range that we gave guidance on. Simon.

Hi, David it's Simon. So certainly we have been preparing for all eventualities with respect to the DCBs and BTK as well. While we won't provide you any details here, I think it's important to recognize that the territory managers for example wouldn't prefer intervention that business, they sell far more than DCBs. And we have seen your positive uptake in stents and other areas. So to begin to affect those, I think would be not a great move. But obviously as part of this process, we have sought to offset as much of this as possible without impacting the commercial performance of the organizations.

And we are still waiting to see where the FDA comes out, the course on labeling changes and it’s the letter to physicians. So we will stay tuned for how that works out. Thanks for the question.

Your next question comes from the line of Bob Hopkins of Bank of America Merrill Lynch.

Yes, thank you and good morning.

Good morning Bob.

Just a lot of questions one could ask. But I can't help but just one more on paclitaxel. Just curious if you could elaborate, just in however you can on kind of what you heard from FDA after the panel meeting. Do you have a sense at this point, whether you think you might need a whole new trial or just longer term data or any incremental senses as to what you heard from there would be helpful.

You are asking on BTK.

Yes.

Yes, that is what I thought.

On BTK, well, Bob its Simon. I don't think we would provide the specific information here. We did provide the six month data and interim 12-month data in the PMA that we filed. And we continue to cooperate and work with FDA as we work through this. But to provide any specifics about it, I think would confer a competitive advantage on others and I'm low to do that. So it remains a very active PMA, our teams are collaborating with FDA and we expect to have face-to-face meetings here with them in the not too distant future.

To really nail down what that data requirement will be. And we have more data to bring to the table too. So we continue to work on it. Thanks for the question Bob.

Your next question comes from the line of Robbie Marcus with JP Morgan.

Great. Thanks for taking the question. I was hoping you could talk about your strategy around M&A in general. You are down at three, seven times leverage, we saw you not wait until you got all the way to your target last time with the Bard deal. Just how you are thinking about where to add, what to add valuations in the space? And then also, if you could just touch on maybe your thoughts on M&A specifically in diabetes. This is an area, I think back to the last Analysts Day. There was a long list of product innovations you were hoping to bring to market. I don't think it probably turned out as positive as you hoped. Just your thoughts on diabetes and your plans for the future there? Thanks a lot.

Yes, sure. And happy to answer the question. First, just a little bit of a correction. We did hit our deleverage target on the CareFusion deal before we did the Bard deal. And listen your are very politic in the way you have rest of the question. So no problem at all. But anyway, so we are really focused on meeting our leverage target as we go forward. Now, what we have been saying and remain committed to is that, must do plug-in M&A is an important part of the strategy. And as we put the deal model together we made allowance for that and you have seen us do stuff like WavelinQ, because it's an important part of the growth strategy. You should expect, over the next year that we will continue doing that, as we move forward towards deleveraging and getting down below three times. And then, as we look forward, we have tremendous capability in terms of our ability to do M&A. But, we are not a serial acquirer, we are a strategically driven Company. And you should expect us to be thinking about plugging M&A and then looking at the dividends and share repurchase as we move forward. So, Chris, anything else you want to add to that?

I would just point you back to the presentation, I made at your conference back in January, Robbie, where we talked about future cash flow considerations and the bottom line of that is we throw up a lot of cash. We happened to be using it to pay down $6 billion of debt, but at the same time, when that is done, which is, within the next year, we will have a lot of cash to allocate. And we started getting some sense of that, we will be talking more about that as we move on. But again, it gets back to what Vince said is, we are not going to let it build up in the balance sheet, we are going to be more active in tuck-in M&A on a strategic level across the whole portfolio and likely to start going back to share buybacks, once we start building up the cash balances and have gotten down to that three times leverage. And we made that correction, because we are very proud about the fact that we live up to our commitments, we committed that we would get down to three times leverage in the CareFusion deal. And we did that before moving into the Bard transaction and we are going to get down to the three times leverage this time as well.

So, as Chris said, plug-in M&A across the entire portfolio and that could include diabetes, obviously, any other business here. In the short run, we remained committed to the Patch Pump. You heard the comment that we have taken on a development partner for doing that and we will continue to work on that as the number one priority as well as investing in the core of that business where we see some nice opportunities. But thanks for the question.

Your next question comes from line of Vijay Kumar of Evercore ISI.

Hey guys, thanks for taking my question. I have a housekeeping questions first. One on in Q4, the imply at the lower end of the 5% or 6% of the annual rate and you are going to place Q4 6% organic, where is the acceleration coming from just given the tougher comps, if you can walk us through that. And the second on 3Q, the MDR regulation, incremental cost, is that sort of an ongoing implementation costs, are we annualizing during the Q4? Thank you.

Yes. So it was a little hard to hear you, Vijay, but at the same time, I think I got it. You were looking for a little bit more on Q4 revenue and we are not talking about accelerating much more from the five to seven. It's a little bit and, I went through before where we are seeing strength in some of the new products that we have brought to market. Venovo to Covera, WavelinQ are very helpful, continued strength in UCC. We are seeing great momentum in MMS, as you saw from the results this quarter. MDS is accelerating as we expected it to and we see strong growth in biosciences and diagnostic systems. Don't forget, we have some revenue synergies that kick in towards the back end of this year, particularly in the fourth quarter. So that is where we are seeing it come from. And I think, I talked about the margins, gross profit. As I mentioned in my prepared remarks, we saw some one-time kind of timing items that go away in the fourth quarter and rebound. Not to mention FX, not being a headwind, both on gross profit and operating margin. We see CI and synergies ramping. So we are very comfortable with the direction and very similar message to what I said last quarter, you saw that moving that direction and the third quarter and we expect that to continue in the fourth quarter.

So Vijay, the only thing I would add to that is the emerging markets growth is going to continue to be strong. I mentioned already that in China, we were double-digits, we expect to be double-digits for the rest of the year. We have a great business there, a great team there and a strong partnership with the Ministry of Health. That is all going extremely well. We don't expect this environment with tariffs on retail products and stuff to be impacting that business. So we expect that to do double-digits for the entire year. And feel good about that. We feel good about the rest of Asia. And of course, EMEA, you saw, it was very strong this quarter. We expect that to continue too. So there is a lot of drivers both in the business side and from the geography side.

I think just for clarity, I would add two other points, Vijay. We do expect lower interest other to be about 450 million, as we mentioned in our prepared remarks. And then I would expect tax to be closer to the middle of the range. There is a lot of intricacies and tax, but you saw it was lower in this quarter at 12.8%. That will rebound upwards in the fourth quarter, putting us right towards the middle of the guidance range that we gave.

Thanks for the question.

Your next question comes from the line of Larry Biegelsen of Wells Fargo.

Good morning, thanks for taking the question. Just one on Lutonix, one on China. So on Lutonix there have been a lot of questions on BTK. But my question is on the current indications and kind of what you are seeing since the FDA panel and your expectation once the updated FDA guidance comes out? And just Vince, I heard your comments on China and your confidence there. But there we are getting questions from investors about potential backlash in China against U.S. products given all the rhetoric here. Maybe you could help us understand why you are confident in that growth continuing and why some of this noise won't have any impact domestically? Thanks for taking the question.

Yes. Sure. I will handle that. And then Simon can handle the intricacies of what is going on DCBs. So on China, as I was mentioning just a minute ago, our experience through this whole situation with what is going on with trade has been that they have been keeping very separate what is happening in healthcare versus what is happening on the trade side. And I think that reflects number one, a strategic priority to continue to develop the health care system in this environment. And that is what we hear from the Ministry of Health and in fact, more recently over the past six months. We have had conversations, where they have explicitly told us that. So that is the first part of it. The second part of it is, we had our team in here and the China Healthcare System is now better funded than it was a year ago or three years ago. And so there is some positive momentum going on in China, as the rest of the economy slows down that I think is important to them. And then thirdly, we are really well positioned with the portfolio and the organizations that we have in China and it's not just the fact of our commercial organization. But it's what we do in terms of investing in China. We have four plants in China, we continue to invest behind that, we continue to invest in innovation for China as well. And I know Tom is excited about the portfolio, he is been working very closely with John DeFord and our team in Asia. So, we have built a partnership over 25-years there. And so we do think that different aspects of the environment will be difficult, and we are ready for that. But we also expect that with what we have done to fully invest in China and not just a commercial organization, we are very, very well positioned there. And that is what we hear and Tom has got another one or two things he would like to add.

Larry, this is Tom, good morning. Maybe just one small thing to add to Vince's good overview there is that those investments that we have made over the last 25-years, particularly in that localized, highly automated manufacturing, today the majority of the high volume disposable medical devices that we sell in China, we make in China locally. So we are actually importing, relatively low percentage, particularly of our high volume disposable devices, where there can be local competition, we are actually behaving as a local in that. Employing local associates, acquiring raw materials locally, et cetera, and engaging in those local communities. So much more on the some of the unique areas where there is actually not a local competition. In area such as BD,BDS, et cetera or BDI, where we would be doing importing and we are actually moving somewhat of that manufacturing into China as well.

Yes. Okay, so Simon on DCBs and the intricacies there.

So good morning Larry it's Simon. So, I think, as you obviously know the panel happened in June and I think industry really did put the best foot forward here and in a collaborative nature. I think many of the main physicians that spoke was speaking on behalf of the role of paclitaxel, not only within PAD, but also these are paclitaxel in other areas and not seeing a signal associated with that. And everyone continues to work with FDA, as they look to refine their due doctor letter. What we have seen is approximately 50% reduction, I think we communicate that on the last call, it has remained at about that point in the last quarter and barring any unforeseen upsized I think we should expect that to continue as we roll forward here. But once again, DCBs are just about 1% of the total BDX business as Chris has spoken to and I have spoken to with new products in PI with new products in surgery that are just launched and with the outstanding performance and funnel within urology. I think we are well placed to offset as much of the headwinds as we can moving forward.

Thanks, guys.

Sure, thanks.

Your next question comes from the line of Bill Quirk with Piper Jaffray.

Great. Thanks, good morning everyone.

Hey Bill.

A couple of questions for Chris. Just, can you maybe just elaborate on the lower interest expense. Doesn't like should be additives to earnings for the full-year. So I'm just trying to figure out where the offset is, just given that the overall earnings guidance didn't change? And then secondly, would you care to elaborate on, I guess the durability of the BD MAX growth you have seen several very strong quarters now? Thank you.

Sure. So you already saw some of the interest reduction in the third quarter. And that was actually used to offset the additional pressure, we saw about $0.05 of pressure more than we expected to in FX. We thought it would be about $0.20, it was more like $0.25 of pressure. So you have already seen some of that and that is why I pointed you to the fact that the tax rate goes back up in the fourth quarter to get to the middle of the range for the year. It's now 13.3 year-to-date through the third quarter and we expect it to be closer to the 15% for the year. So obviously, that is an offset that you see and it was much lower. So when you put all that together and you model, I think you get back to right where we are. And there is no question that the FX has put pressure, it was real in the third quarter. But we are holding our range for the year despite that pressure.

Okay. Patrick.

Let me comment quickly on the BD MAX. And as we said in the quarters before, we saw growth north of 20% and again, this quarter it was north of 20% and it's driven by the strong access we have the Enteric Panel to NDP Panel et cetera. So we are pretty confident that this has a long runway, building out more panels on BD MAX. And, again, there is strong demand, and we have pretty high growth in the business.

Patrick, anything you want to add on BD COR, I mentioned it as one of the new product launches, maybe a little more color on that.

Yes. So we just launched BD COR in Europe. And we are really, really happy with the initial demand we are seeing and interest, we are seeing from our customers in Europe. It's still early days, because we have just one assay so far on it, but we are building out the panel. And we think, we have a very competitive platform on hand that will drive the future growth within our business here. And we will have the same as I said, we have from BD MAX report and BD COR build out a complete platform approach. So we can cover both the acute and the COR lab. So it has a very strong driver for business.

Okay thanks Patrick. And thanks for the question.

Your next question comes from the line of Rick Wise of Stifel.

Hi good morning Vince and hi Chris how are you doing?

Good morning, we are doing great.

One quick one and one guidance. And just Vince, as always, I'm curious to hear your thoughts about the politics and med tech tax. I always like to hear your thoughts like that. But I would like to ask a guidance question. I think you are making it abundantly clear and for multiple reasons why fourth quarter - fiscal fourth quarter is going to look good and accelerated and sort of sounds like a minimum look a lot like the growth that we saw in the fiscal third quarter. But you do have your dramatically most challenging comp of the year. Maybe help us understand how you had hit the upper end or get towards the upper end of guidance. What has to happen and it would seem to me, to get to that full-year guidance more toward 6% you would have to post an upward single-digit fourth quarter. Is that remotely possible or are there some variables that I'm not understanding. Any color would be much appreciated.

We have provided guidance in the past calls that because of DCB, because of the flu season as it played out, those are the biggest drivers that we would be towards the lower end of our guidance range of five to six in spite of those pressures. So the guidance for Q4 really implies the low end of that 5% to 6% range. So, as you have just mentioned, it would take a real blow out to get up to the top, but the businesses are performing strongly. But as you said, with the content that makes it really difficult.

Yes, I mean, we feel really good about the fact that the businesses are delivering well. We talked about BDI and the performance in this quarter with would have been well over 6% less for the DCB impact. And as I said even with the DCB impact and the potential BTK impact, we feel strongly about the ability to drive 5% to 6% next year as well. So we are feeling good about that momentum. In order to get the high ends of the range, we would have had to have a blowout flu season and because we know that was a tough compare against last year's flu season and DCB was incredible.

Yes. Tom.

Frederick, this is Tom good morning. Maybe just one other comments that to add there. You mentioned the comp being last year's Q4 and you are right, as Chris mentioned, we feel really good about the momentum from Q3 going into Q4 and one of the biggest comp area is last year I believe was in MMS we saw very strong growth. And I think one of the things I'm surprised you haven't got the question of a really strong number in MMS this quarter, as well, which is reflecting the continued momentum that we see in that business. And unless Alberto has any other comments to add there. But I think we are continue to be pleased at growing significantly above market in the MMS business, which we expected to continue. So.

Yes, very good quarter for MMS clearly growing 9% plus, and it just reflects an ongoing momentum for this business. Yes we have been favorably impacted by some timing of installations, like here we - be on the last side in the pump side. But that will normalize overtime. We had a very strong quarter last year in Q4 we will jump over that and we won’t grow up to 9% growth rate clearly, but we are expecting good performance given the high quarter. And the drivers are the ones that we had mentioned in the past in terms of our core platforms into Alaris, Pyxis. The health side analytics to this really driving the integrated platform approach to the - and interoperability where we already have 475 sites live. And it just shows that momentum and that acceptance by the market of what we are offering as an integrated platform.

Yes, the business is performing great, really, really well. Thanks Alberto. And thanks for the question.

Your next question comes from the line of Richard Newitter of SVB Leerink.

Hi, thanks for the questions. I have two here. One on molecular, the double-digit growth trend is very strong. You also had some competitive and continue to put up strong double-digit growth rate. I guess my question here is how much of the performance and the momentum in that business is something happening in terms of improvement, the underlying market versus share? And then the second question would just be on drug-coated balloons, I would love to just hear following the FDA panel, what are your customers and doctors saying in terms of what it’s going to take to kind of either get back to levels, or close to the levels of utilization and implementation where they were pre-panel and the study. And where do they think that level is? It's half of what it used to be. What are your customers saying with respect to that view post panel? Thanks.

Alright. So let's do molecular first, and then we will come back to DCB.

Thanks Richard for the question. So on molecular, as you said, our growth is pretty strong, not only driven by BD MAX. But it's probably one of the big contributors there. If you look at our growth very competitive market growth. I would say clearly indicates that we are taking some share right now. Given the strong growth that we have, and we are again confident on our, in our assays that they are hitting the right market segments and it's also - if you look for example on Enteric, we are not using multiplex as is we are using a more target approach and that is also in terms of reimbursement model very beneficial for us. So I would say definitely points to taking market share for us.

Okay. Simon on DCB.

So with respect to DCBs. I think the FDA needs to come out with a statement to - and says that the benefits outweigh the risks in summary for the market to begin to begin to rebound. I think our customers feel like their hands are tied right now with the Dear Dr. Letter from March 15th and that is reflected in the current 50% there about a decline in business, not just with us, but with others too. So I think in one sentence, benefits need to outweigh the risks and the benchmark for recovery profile is if you reflect back on drug eluting stents in the coronary system, you can see the recovery profile that they experience over prolonged period of time.

Yes, which took a few years, right Sam to come back.

Which took a few years. But we saw the way to see what the contents of this letter holds for us. And more importantly, for the patients that we serve. These remains the same way then patients that we serve will not have the treatment options available to the scale it was before the Dear Dr. Letter.

So just to answer that a little bit. This is probably not a black and white situation. There is a lot of degrees of gray and what the FDA can say here and so we don't know exactly where that will come out. Simon mentioned before industry has given a lot of input, we expect to KLLs are also giving input on that. And we think very shortly, we will get an updated letter, the FDA, I should say will be coming forth with an updated letter in terms of exactly what Simon was talking about. So we are waiting to see where that comes out. And I would agree with Simon, industry more so the healthcare providers have made some great arguments as to why this product is important for patients. And so we will see how that plays out over the next couple of days. Thanks for the question.

Your next question comes from a line of Matt Taylor of UBS.

Hi, thanks for taking the question. So I just had a clarification question on your commentary on DCBs and next year at synergy. So it sounds like when you are talking about being able to grow 5% to 6%. That is not predicated on any real snap back in the core DCB business, is that correct? And then also, when you reiterated the Bard revenue synergies, you are right on-track, there is no major impact or un-surmountable impact from DCBs. Is that right?

Yes. So you are right. As we think about 2020, we are assuming that 50% holds through 2020. So no snap back in that. Okay. On the synergies, the cost synergies were right on target. We did mention that, we will do $100 million this year. And we are well on our way to 300. I think from a revenue synergies we are on-track as well. So.

So Matt, this is Tom, just to give a little bit more color on the revenue synergy. So we are seeing the three areas that we have shared before, we are seeing very good momentum across both the vascular access area, we brought the Bard pick and midline business in and integrated with our catheter team. I would say in the last two quarters, we are really seeing an increase in the number of competitive conversions, which was exactly our strategy. And that gives us confidence going forward and that continuing to the fuel performance, particularly in the MDS business, so you see that now in the back half of this year, going into next year. We are seeing the benefits in our surgery business. You are seeing some of that play out actually this quarter, that the investments that we made in the combined Biosurgery and chloro prep infection prevention salesforce in Europe. We are seeing Biosurgery and infection prevention now growing strong double-digits in Europe because of those synergy investments that we have made. And then, of course, the third area of just geographic expansion in markets, particularly beyond China that Bart had invested in significantly, we are seeing strong growth in BDI in those other geographies as well. And so, we feel very confident our revenue synergies being on-track for this year and continuing that momentum in 2020.

Okay. And then just one follow up, it sounds like the BD COR product could be a really interesting drivers. You have had some comments on it today, but they are a little general. Could you talk a little bit more about how big you think that product could be overtime as it builds on your successes with MAX?

Yes, I can take that. Look at again , current revenues are still, it's early days, right. We are ramping the product. We are just ramping it in Europe with the HPV panel on it. As I said, this is for as a revenue driver in 202,1 2022. I think we will see lots of revenue contributions coming from this platform, when we also have it available worldwide. We think it's a very attractive platform, given the automation capabilities it has, especially also taking care of the pre-analytical step within the platform. So we think we will see a very nice revenue contribution and growth contribution in our diagnostic services business. And in the years 2021 and 2022. This year, it's definitely - making a huge contribution.

Okay. Right. Thanks. Thanks, Patrick.

Your final question will come from the line of Josh Jennings of Cowen.

Hi, good morning. Thanks for taking the questions. Just two questions. First on the peripheral business, just in terms of attempting to leverage the salesforce even more on the DCB pullback. I was wondering about your views on the need for an atherectomy platform. I think prior to the acquisition, there was a rumblings that Bard had a system in development in the pipeline and just wanted to hear is that still the case within back to its pipeline? And secondarily, just wanted to hear some of the thoughts on the hernia businesses, Phasix seems to be doing very well. There is some controversy around synthetic non-receivable mash. And just wanted to hear your views on the market and in Phasix positioning? Thanks for taking the questions.

So its Simon here. I wouldn't comment specifically in what is in our NPD funnel until we are ready to actually give a commercial launch date. As you know, PI plays and in every category within the PAD space, with the exception of atherectomy. So it's obviously something we keep a close eye on internally and externally. But Company further on that I wouldn't do so. And then with respect hernia, at long last, I can stop referring to the hurricane, because Q3 so the last comp again versus the hurricane that happened actually two years ago. So we had a very strong underlying quarter in Q3. We continue to grow above the market. And your Phasix performance with our context of Bard business continue to do really well. We have just released three-year data on Phasix, which continue to do really well. We just released another version of Phasix. As Vince mentioned, Phasix ST OVHR, which incorporates a new positioning system. And that is off to a great start. And again, we just recently released a new articulating fixation system that thus far has got tremendous feedback from our customers. So hernia continues to do very well and we continue to look for other ways that we can leverage that sales in team that we have domestically and internationally. So we should expect to see that continue in that vein.

Okay Josh, thanks for those questions. End ofQ&A:

Thank you. I will now return the call to Vincent Forlenza for any closing comments.

Okay. So let me wrap this up. A couple of thoughts, our revenues were strong across all the businesses and regions in-line with the second half plan acceleration we are very excited about that. We expect our momentum to continue and have reaffirmed our fiscal year 2019 revenue and EPS guidance. And as we approach the final year at the Bard deal model, I'm confident that we will continue to deliver on our commitments, and create more value for our customers or patients and our shareholders. Once again, thank you for your questions. We look forward to updating you again around this exciting business that we have built. Thanks very much.

Thanks, everyone.

Thank you. This does conclude today's teleconference. Please disconnect your lines at this time and have a wonderful day.