- Abbott announced Wednesday sales of its FreeStyle Libre continuous glucose monitor increased 67.6% on an organic basis compared to last year, contributing $496 million during the third quarter to its medical device unit, which grew 10.6% to $3.07 billion in sales during the same period.
- But FDA approval for the second generation of the device may not be coming as soon as investors hoped. Abbott executives said on the earnings call it is taking longer than expected to work through a number of items with FDA.
- On Tuesday, the company announced a partnership with Tandem to develop future insulin delivery systems. While final discussions are still ongoing over "technical implementation of device integration and associated commercial support activities," analysts at Cowen said the partnership is a net negative for Dexcom.
Wall Street analysts at Cowen speculated the Tandem partnership might "imply imminent Libre 2 approval," but company executives on the earnings call declined to provide an expected timeline despite saying in July they expected approval "relatively soon."
"Admittedly, it is taking longer than we expected; we are currently working through a handful of open items with the agency," Abbott COO Robert Ford said. "I'm confident in the data, I'm confident in the product."
Abbott announced it received CE mark approval for its FreeStyle Libre 2 system in Europe last October.
Earlier this week, Abbott announced a partnership with Omada Health to grant eligible Type 2 diabetes users a FreeStyle Libre prescription and access to a remote diabetes educator.
Third quarter revenue for Abbott came in at $8.08 billion, slightly below Wall Street expectations, but executives praised the growth of key products FreeStyle Libre, MitraClip and Alinity — the trifecta drove growth last quarter as well.
Its diagnostics unit grew sales 6.6% on an organic basis, and the company received FDA approval for its Alinity-S diagnostics system during the third quarter. MitraClip posted sales of $176 million, a jump of 31.9% on an organic basis, and Abbott received approval for the newest generation of the device during the quarter.
The company narrowed its earnings per share guidance to the range of $3.23 to $3.25 from a target of $3.21 to $3.27.
"We're performing exceptionally well across several areas," CEO Miles White said in a statement. "We're right on track to achieve ongoing EPS and organic sales growth at the upper-end of our initial guidance ranges for the year."
On Tuesday, Abbott's Board of Directors authorized the repurchase of up to $3 billion in common shares, adding to an unused $795 million from the company's previous share repurchase program from September 2014.
White noted on the Wednesday earnings call the company has focused on reducing debt in past years instead of significant share repurchases. And while the company may consider smaller bolt-on acquisition, it does not have major merger actions planned.
"I'm not forecasting anything significant at all in the M&A area," White said. "We want to be flexible how we manage cash for the shareholder."