Abbott Laboratories' ($ABT) sales are pretty evenly split between medical devices and diagnostics versus established pharmaceuticals and nutrition. It had about $10.1 billion in revenue for each during 2014. But while the diagnostics business gained 3.2% to $1.2 billion in sales during the fourth quarter over the same period a year earlier, medical devices slipped by 3.9% to $1.4 billion. Both businesses were heartily outperformed during the quarter by nutrition and pharma growth.
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| Abbott CEO Miles White |
Abbott is looking to gain traction in medical devices with its entrance into the electrophysiology market with the December completion of its Topera acquisition. Abbott chairman and CEO Miles White described the deal as "foundational" on the earnings call, suggesting that the company will expand its electrophophysiology commitment.
But that is still in the early stages. The company's worst performing device segment was its diabetes business, which saw fourth-quarter sales fall by 9.6% to $313 million. Its vascular and medical optics groups both slipped by low single-digits during the quarter, with optics losing its grip on a previously aggressive growth rate that averaged out to 6.5% for the year.
That's despite the fall launch in Europe of its FreeStyle Libre glucose monitor that eliminates the need for a finger stick. In 2015, White said it expected to see operational sales growth in the low single digits in the diabetes business based on the launch. Over the next two to 5 years he sees the diabetes device business as becoming a positive contributor to growth.
Abbott attributed the decline in medical optics sales to declines in the refractive and corneal businesses. Last year, the company broke ground on a manufacturing facility in Malaysia to support the demand for cataract lenses. Last year, FDA approved the Technis Multifocal Low Add intraocular lens
Diagnostics growth was driven by emerging markets adoption. In 2015, Abbott expects high-single digit operational growth for the business. Last year, it got EU approval for its Iridica infectious disease testing platform.
On the diagnostics business, White summed up, "We expect another year of performance in our diagnostics business in 2015 as we continue to execute on our commercial model and core laboratory diagnostics, drive uptake of our new infectious disease platform and molecular diagnostics in Europe and increased market penetration with our point-of-care platform."
- here is the release