President Joe Biden may have declared the COVID-19 pandemic “over” in the U.S., but that news doesn’t appear to have reached the makers of diagnostic tests for the virus.
After kicking off 2022 with its highest COVID test sales haul for a single quarter since the start of the pandemic—helped along by a new $1 billion contract with the U.S. government—Abbott predicted that marked the last hurrah for COVID-related sales. Though it roped in more than $3.3 billion in test sales during that three-month period alone, it forecasted full-year sales of just $4.5 billion, spreading out one last billion-dollar haul across the entire remaining nine months of the year.
One quarter later, Abbott had already far surpassed those expectations, reeling in another $2.3 billion in COVID test sales. Even so, it took a conservative view toward the end of the year, penciling in only another $500 million in test sales for the entire second half.
Fortunately for Abbott, once again, those predictions haven’t panned out. In its third-quarter earnings report, released Wednesday, the medtech giant tallied another $1.7 billion in the category, bringing its year-to-date total to more than $7 billion.
Though “significantly higher” than Abbott’s own expectations, according to CEO Robert Ford, that number still marked about a 10% decrease from the same period last year, when the company took in $1.9 billion in COVID test sales.
“The decline in COVID test sales compared to last year was driven by lower demand for laboratory-based tests, whereas demand for our rapid tests—which include BinaxNow, Panbio and ID Now—continues to be strong, with sales this past quarter at a similar amount to the third quarter of last year,” Ford said during a call with investors Wednesday, adding, “Rapid tests have proven to be very important and highly practical tools.”
Still, Abbott is once again tempering its expectations for the coming months. It’s now expecting to take in a total of $7.8 billion for all of 2022, which leaves only a $500 million gap for the final quarter of the year.
“We haven’t really planned for a big winter surge—it’s more of an endemic-like forecast for Q4,” Ford explained on the call. He continued, “I think that’s the kind of endemic forecast that we’ll see going into 2023, but right now, it’s looking like COVID test sales are stickier than most have assumed.”
Across its entire business, Abbott reported global sales of $10.4 billion for the third quarter, which represents a year-over-year decline of about 4.7% compared to the same period of 2021. The company attributed that fall largely to the dipping COVID-related sales and an almost 15% drop in quarterly sales for its nutrition business, which stopped manufacturing certain baby formula products between February and July as it investigated contamination issues at a major Michigan plant. Distribution of those products didn’t resume until September.
Abbott’s established pharmaceuticals division fared well for the quarter—tallying almost 5% year-over-year growth—while its medical devices business stayed relatively stagnant.
The latter was anchored by the company’s diabetes care segment, which brought in nearly $1.2 billion in sales, making up almost a third of the entire medical devices business. The bulk of those earnings, in turn, came courtesy of Abbott’s continuous glucose monitor: “Sales of FreeStyle Libre exceeded $1 billion in the quarter, and our user base expanded to approximately 4.5 million users globally,” Ford said during Wednesday’s call.
He noted that sales grew “more than 40%” in the U.S. alone, where Abbott spent the quarter rolling out the latest model of the CGM after securing FDA clearance at the end of May.