- Medical device and diagnostics sales accelerated during Abbott's second quarter, with company executives reiterating faith Wednesday morning in its current growth drivers: minimally invasive mitral valve repair device MitraClip, continuous glucose monitor (CGM) FreeStyle Libre and its line of Alinity laboratory machines.
- Diagnostic and ablation catheters targeting atrial fibrillation, along with Abbott's left ventricular assist device approved last year as a destination therapy for heart failure, also contributed to 6.4% reported growth in medical devices, for quarterly revenues of $3.08 billion.
- Losses in neuromodulation, rhythm management, molecular and rapid diagnostics all persisted during the quarter, though in many cases saw sequential sales growth compared to earlier in the year.
CEO Miles White called the mass market for FreeStyle Libre a "tremendous opportunity" that is "unlike anything seen" in other device or diagnostics businesses, which are usually limited to more niche populations, he said.
Revenues from the CGM were up about 64% during the quarter. The reported growth rate in the diabetes division in the U.S. cooled from more than 75% at the start of the year to about 42% in the most recent quarter, while international sales growth remained steady at close to 24%.
White reaffirmed plans to expand manufacturing capacity of the product, with the first wave of expansion coming in the next few months.
FDA approval of the CE-marked FreeStyle Libre 2 remains outstanding; executives declined to speculate on timing of a regulatory greenlight and assured investors the company would not have submitted the product as an integrated CGM (iCGM) had it not clearly met the standards.
"We were encouraged by the agency to file Libre 2 as an iCGM," COO Robert Ford told investors. The G6, competitor Dexcom's CGM, remains the only product on the market authorized by FDA as an iCGM.
There is potential for the Libre technology beyond glucose monitoring to examine other analytes, White said, highlighting the opportunity in affordable and accessible wearable devices.
In structural heart, executives said MitraClip's more than 25% growth during the quarter was largely driven by increased productivity in existing U.S. accounts as a result of clinical and field sales expansion. Ford said the device has "a lot of runway," with current penetration rates estimated by the company in the low-single digits. Japan is one key market being targeted in the long term, he said.
In addition to FDA approving the latest generation of the device days ahead of the earnings report, the company is seeing gains from agency's expansion of MitraClip's indication in March. Since then, Ford said a "dozen or so" commercial payers have updated their coverage to reflect the label change. CMS has yet to revise the national coverage determination for mitral valve repair. "We expect the [NCD] to be opened up very soon," Ford said.
Abbott's diagnostics business was up 1.7% on the quarter largely thanks to its core laboratory unit, riding revenues from placement of more than 3,000 of its Alinity molecular, hematology and immunoassay systems in Europe, with the latter being furthest along, executives said. Blood and plasma screening system Alinity s received FDA approval last week.
Those gains offset another down quarter in both rapid diagnostics and molecular diagnostics. The company attributed a 12.4% sales decline in molecular diagnostics to negative non-governmental organization purchasing patterns in Africa. As for weak spots in medical devices, Abbott said it recently completed a salesforce increase of about 40% in its neuromodulation business, and sales may improve as new products are launched in late 2019 or early 2020.
Overall sales of about $7.98 billion came in about $20 million below analysts' revenue expectations, but Abbott's stock was up close to 4% Wednesday morning. Executives said they now expect organic sales growth of 7% to 8% for 2019, against a backdrop of average organic growth of 7.3% during the first half of 2019.