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| Abbott Laboratories CEO Miles White |
The new Abbott Laboratories ($ABT) is counting on med tech for revenue growth in a proprietary-drug-free future, and the company is so far succeeding in diagnostics while medical device sales falter.
In the first quarter, Abbott raked in about $1.1 billion from its diagnostics business, 4.4% growth over the prior year, but medical device revenue slipped about 4.6% to $1.3 billion, due largely to sales struggles in the U.S.
In diagnostics, Abbott is strengthening its position around the globe by rolling out new tests for its Architect assay platform, and the company's core lab business swelled 3.6% to $883 million on the quarter thanks to a strong emerging markets performance, the company said. Point-of-care diagnostics, Abbott's smallest but fastest-growing unit, grew 17.3% to $91 million, while molecular diagnostics stayed about flat at $106 million.
But medical devices are a different story altogether. Vascular sales dropped 7.7% total and 19.3% in the U.S. alone, putting up $742 million in revenue as Abbott transitions away from older stents. Medical optics and diabetes care, Abbott's other device units, remained flat on the quarter with $270 million and $316 million in revenue, respectively.
However, the quarterly lag in vascular sales is a temporary setback, Abbott said, as the company is in the process of rolling out a new fleet of products around the globe. In the U.S., Abbott has recently launched the Xience Xpedition drug-eluting stent, which the company expects to grow in market share throughout the year, and Abbott is ramping up overseas marketing efforts for MitraClip and Absorb, two products for which the company is pursuing FDA approval.
Absorb, a unique dissolving vascular scaffold, has a chance to become Abbott Vascular's banner product, CEO Miles White said on an analyst call Wednesday, and the company is committed to expanding its use throughout 2013.
"The uptake in Europe is taking a little longer than we might like, but we're confident this is going to be a workhorse stent for us over time," White said.
On the whole, Abbott reported $5.4 billion in revenue on the quarter, a 1.8% increase driven by big gains in its nutrition business, which grew 8.7% to $1.7 billion.
- here are Abbott's full results