It appears that when it comes to COVID-19 test sales, the reports of their death have been greatly exaggerated—at least for the moment. After predicting a sharp decline in revenues earlier this year, Abbott is saying the cliff’s edge might be just a little further away than previously thought.
In April’s first-quarter earnings report, the maker of the now-ubiquitous, paper card-based BinaxNow and other coronavirus tests said their income may have reached a high point—with a record-setting $3.3 billion seen in the opening three months of the year.
At the time, Abbott said that figure would make up the lion’s share of 2022, as the U.S. began to move away from a pandemic mindset. The company projected it would collect a total of $4.5 billion over the remainder of the entire year, and largely before the end of June, before slowing to a trickle in the fall and winter months.
But as it has done many times before, COVID-19 upended those predictions, with testing sales dropping to something of a plateau, more than a valley.
For the second quarter of this year, Abbott posted $2.3 billion in test sales—the same figure it reported for the final three months of 2021, and about the same amount the company would have made in the first quarter of 2022 were it not for a $1 billion contract from the U.S. government in the face of the surging omicron variant.
Amid these ups and downs, Abbott has pledged to update its financial forecasts quarterly; it now projects COVID-19 test sales to reach $6.1 billion by the end of the year—which, including the $5.6 billion it made in the first half of 2022, amounts to a mere $500 million over the year’s remaining six months.
Abbott previously got bit by underestimating the public’s demand for COVID tests, as well as the virus’ resourcefulness. In mid-2021, as vaccines became widely available and started to make a significant dent in the spread of the disease, Abbott began laying off hundreds of workers at its diagnostic production plants after seeing what it thought was light at the end of the tunnel.
But the oncoming train that was the virus’ delta variant sent the company scrambling to rehire staff by the end of that August, offering $2,000 sign-on bonuses for both day and night shifts as BinaxNow kits became hard to find on store shelves. The omicron wave the following January would post new records in positive cases, with tens of millions per week across the U.S., before the country passed the grim milestone of 1 million COVID deaths in May.
Taken as a whole, the company posted $11.3 billion in second-quarter sales, for a 10.1% gain over the same three months in 2022. However, excluding the unexpected boost to COVID testing revenues, that amounts to a 0.3% decline in worldwide sales—dragged down by Abbott’s nationwide recall of baby formula and the pause in its manufacturing, with only partial production having resumed on July 1.
Meanwhile, in that time Abbott received FDA clearances for the newest version of its best-selling diabetes sensor, the FreeStyle Libre 3, as well as for its miniaturized, leadless pacemaker system that’s implanted within the wall of the heart muscle itself.
The company also obtained a breakthrough tag for a new type of wearable diabetes sensor that tracks both glucose and ketone levels, to help provide early warnings of the signs of diabetic ketoacidosis.
"Our new product pipeline has remained highly productive, and our diversified business has continued to be resilient in a challenging macro environment," CEO Robert Ford said in a statement.
Outside of the company’s rapid diagnostics sales, Abbott’s core laboratory, molecular testing and point-of-care divisions saw year-over-year declines in COVID-related revenues, totaling about $459 million in the U.S. and $1.1 billion internationally. Excluding pandemic tests, core lab sales dropped 3.1% compared to last year, while molecular diagnostics jumped 17.9%.
Worldwide medical device sales grew 2.5%, despite the impact of fewer cardiovascular and neuromodulation procedures due to COVID surges in different regions, as well as the pandemic lockdowns in China, the company said.
FreeStyle Libre sales, meanwhile, surged 18.7% to about $1.1 billion for the quarter. The sensor’s latest iteration—about the size of a penny, and stuck to the back of the arm for up to two weeks at a time—is being rolled out to U.S. pharmacies after being available in Europe for the past two years.