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Abbott Q3 Dx Business Grows 43 Percent

NEW YORK (GenomeWeb) – Abbott today said that its Diagnostics business grew sales 43 percent year over year.

For the three months ended Sept. 30, 2018 the Abbott Park, Illinois-based firm reported overall revenues of $7.66 billion, up 12 percent on a reported basis from $6.83 billion a year ago. Organically, revenues grew 8 percent. The company beat the consensus Wall Street estimate of $7.65 billion.

Organic sales growth excluded prior year results for the Abbott Medical Optics and St. Jude Medical vascular closure businesses, which were divested during the Q1 2017; the current and prior year results for Rapid Diagnostics, which Abbott acquired from Alere in October 2017; and the impact of foreign exchange.

Abbott reported that its Diagnostics business sales rose to $1.82 billion year over year from $1.28 billion. Within Diagnostics, core laboratory Q3 sales grew 6 percent to $1.09 billion from $1.03 billion; molecular revenues rose 5 percent to $121 million from $115 million; point-of-care sales grew 4 percent to $136 million from $131 million; and rapid diagnostics sales were $481 million, led by growth in cardiometabolic testing.

Molecular diagnostics sales were led by growth in infectious disease testing, a core area of focus, Abbott said, and point-of-care diagnostic product sales were driven in part by strong international growth of the firm's i-Stat handheld system.

The firm said that among its Q3 highlights, it received CE marking for its high-sensitivity troponin I test, which is indicated to help predict chances of a heart attack potentially years in advance of the event, enabling its sale in Europe.

Abbott CEO Miles White said in a statement that the firm "achieved another quarter of strong growth and our new product pipeline continues to be highly productive. In spite of increasing currency headwinds, we're well-positioned to achieve the upper end of our initial full-year guidance."

He said in a conference call to discuss Abbott's earnings that the firm's Alinity family of integrated instruments is "achieving accelerated growth and strong competitive win rates in Europe, where more than 50 percent of our Alinity instrument placements thus far are coming from share capture."

The ongoing global rollout of Alinity, he said, positions the diagnostics business for "consistent, above market growth for years to come as we capture share and bring a full suite of systems to additional geographies, including the US."

Scott Leinenweber, Abbott's vice president of investor relations, noted on the call that in the US, the Alinity clinical chemistry and immunoassay instruments have received US Food and Drug Administration clearance, and the firm is building its test menu. Abbott anticipates that in "the back half of 2019" it will be ready to push for US sales of the cleared Alinity systems, he said.

Regarding the acquisition of Alere, White noted that Abbott just completed its first year following the purchase, and with integration of that business complete, it is positioned "for growth and market expansion going forward."

In 2018, Abbott anticipates about $2 billion in revenue from its acquired Alere business. "We benefited in this last year from one of the stronger flu seasons in a long time, so the infectious disease testing business in Alere did well in that context," White said, adding that he is now turning his attention to forecasting growth for that business in 2019.

In its other businesses, Nutrition sales rose 4 percent to $1.84 billion from $1.77 billion; Established Pharmaceuticals fell almost 1 percent to $1.16 billion to $1.17 billion; and Medical Devices rose 8 percent to $2.82 billion from $2.60 billion.

Abbott reported net earnings of $563 million, or $.32 per share, in Q3 2018, compared to $603 million, or $.34 per share, in the year-ago period. Excluding special items, adjusted EPS was $0.75 per share, matching the analysts' consensus estimate.

The firm spent $574 million on R&D in Q3 2017, up 1 percent from $568 million in Q3 2017, and logged $2.38 billion in SG&A expenses, up 12 percent from $2.12 billion in the prior-year quarter.

Abbott today also narrowed its full-year 2018 guidance range for earnings per share on a GAAP basis to $1.33 to $1.35 and on an adjusted basis to between $2.87 and $2.89. Analysts on average expected 2018 adjusted EPS of $2.89.

In July, the company guided to 2018 EPS of between $1.34 and $1.40 per share and adjusted EPS of between $2.85 and $2.91 per share.

In early morning trading on Wednesday, shares of Abbott on the New York Stock Exchange were down 2 percent at $69.51.