Abbott CEO: We Will Strengthen, Not Separate, Device Business
By Jof Enriquez,
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Abbott Laboratories will keep and strengthen, not separate, its medical device business, a goal the company plans to accomplish by investing in and acquiring early-stage companies, as well as through ramping up marketing of niche products.
Responding to an analyst's question during a conference call, whether the device unit could surpass modest growth if it were spun out, Abbott CEO Miles White said, "We’d always want to strengthen that business, we do wish to strengthen that business, there are a number of ways for doing that and obviously there is organic in-house and then there is our venture organization where we're building a number of small companies who are investing in other early stage companies and so forth and building our pipelines for the future."
Miles cited the acquisition of Tendyne Holdings and investment in Cephea Valve Technologies as examples where Abbott has expanded its footprint in the device arena, particularly, in the cardiovascular segment. Tendyne and Cephea have developed mitral heart valve replacement devices that complement Abbott's own mitral valve repair device, the first-in-class, FDA-approved MitraClip.
Abbott sees multi-billion dollar market potential in treating mitral valve disease, similar to how Medtronic and Edwards LifeSciences have taken advantage in the transcatheter aortic valve replacement (TAVR) device segment. MitraClip, Tendyne, and Cephea could give Abbott a leg up on the competition going forward.
"MitraClip, our first-in-class device for the treatment of mitral regurgitation, once again grew strong double digits. And Cephea, our innovative endovascular stent continued to perform well," added Scott Leinenweber, VP of investor relations, during the call. "In 2016, we'll continue to drive market uptake in MitraClip and Cephea and expect to bring Absorb, our fully dissolving stent, to the U.S. market."
The company plans to eventually broaden its cardiac portfolio based on these devices.
"We look at expanding into structural heart or heart failure or other categories, and we're trying to build our breadth in those other – let's say, surrounding spaces that way," White told analysts.
The company also reported strong performance in medical optics, and plans to roll out “a number of innovative products” in the premium lens segment.
Abbott claims strong demand from customers in Europe for its FreeStyle Libre blood glucose monitoring system, and the company plans in 2016 to introduce the product technology into a number of new markets in the multi-billion dollar diabetes arena. The company last year submitted the professional version of FreeStyle Libre for FDA approval in the United States.
According to Forbes, because Abbott derives a major portion of its sales from emerging markets and Europe, currency headwinds negatively impacted sales throughout the past year. However, organic growth strengthened across all business segments, and the company is focused on improving margins in 2016.