NEW YORK (GenomeWeb) – Abbott reported Wednesday morning that first quarter sales in its Diagnostics business grew 4 percent year over year, driven by strong growth in core laboratory and point-of-care sales.
For the three months ended March 31, Abbott reported overall Q1 revenues of $6.34 billion, up 30 percent on a reported basis from Q1 last year, and up 3 percent on a comparable basis accounting for the acquisition of St. Jude Medical closed in January. The company beat the consensus Wall Street estimate of $6.15 billion.
Abbott reported Diagnostics sales of $1.16 billion, up 4 percent from $1.12 billion in Q1 2016. Excluding the impact of Venezuelan operations, Diagnostics sales increased 5 percent.
Within Diagnostics, core laboratory revenues were $911 million, up 3 percent from $885 million in the prior-year quarter; molecular revenues were $112 million, up 4 percent from $108 million; and point-of-care revenues were $135 million, up 8 percent from $125 million.
Diagnostics segment "growth in the quarter was led by continued above-market performance in core laboratory and point-of-care diagnostics," Abbott CEO Miles White said in a conference call today to discuss the company's financial report. "During the quarter, we initiated the launch of our new Alinity systems in Europe with the ongoing rollout of four new instruments…Later this year we plan to launch two additional Alinity instruments in Europe in the areas of hematology and molecular diagnostics, which will be followed by the initial rollout of the Alinity suite of instruments in the US during 2018."
White also commented on Abbott's announcing last week that it had agreed to amend the existing terms of an agreement to acquire Alere. Under the amended terms, Abbott will pay $51 per share to acquire Alere for a new total price of about $5.3 billion — reduced from an original purchase price of around $5.8 billion proposed in February 2016.
"Point-of-care testing remains an attractive growth segment within the in vitro diagnostics market, and the acquisition of Alere will significantly expand our diagnostics presence and leadership in that space," he said.
Abbott noted that in its core laboratory segment during the quarter, it initiated the international launch of Alinity s for blood and plasma screening, Alinity c for clinical chemistry, and Alinity i for immunoassay diagnostics. The Alinity family of harmonized systems is designed to run more tests in less space, generate test results faster, and minimize human errors, Abbott said.
The firm noted that it is seeing continued strong growth in infectious disease testing, which is its core area of focus in the molecular diagnostics market, but growth was offset by its planned scale down in other testing areas.
In point-of-care, sales growth in the quarter was driven by continued adoption of Abbott's i-STAT handheld system in the US and strong growth internationally.
In other businesses, year-over-year Nutrition sales were down 2 percent, Established Pharmaceuticals were up 7 percent, and Medical Devices were up 100 percent.
Abbott reported net earnings of $419 million, or $0.24 per share, in Q1 compared to $316 million, or $0.21 per share, in the year-ago period. Adjusted EPS was $0.48, above Abbott's previous guidance range of $0.42 to $0.44 and beatinganalysts' consensus estimate of $0.43.
The firm spent $547 million on R&D in Q1, up 45 percent from $379 million in Q1 2016, and logged $2.42 billion in SG&A expenses, up 43 percent year over year from $1.70 billion in the prior-year quarter.
White said that Abbott's 2017 adjusted EPS guidance of $2.40 to $2.50 per share remains unchanged and reflects double-digit growth at the midpoint.
Responding to an analyst question about the acquisition of Alere, he said, "The company has had some challenges, we all know that. It's a bit of a fixer upper and we know that. We're pleased to have the resolution of this matter behind us."
White said that he hoped to close the deal by the end of this summer. "It's going to be a little unpredictable because they still need to file their 10K, and they need that to do a proxy statement to do a shareholder vote," he said, adding that Abbott will also need to divest "a couple of businesses because of regulatory and trust approvals," which it was not aware of when it first announced the deal.
In Wednesday morning trade on the New York Stock Exchange, shares of Abbott were flat at $43.52. Alere shares, meanwhile, were also flat at $49.00.