07.23.08
$6.3 Billion ($25.9B total)
Miles D. White, Chairman and CEO
Richard W. Ashley, Exec. VP, Corporate Development
Thomas C. Freyman, Exec. VP, Finance and CFO
Joseph M. Nemmers, Jr., Exec. VP, Diagnostics
and Animal Health Divisions
John M. Capek, Exec. VP, Medical Devices
Charles D. Foltz, VP, Vascular Solutions
Robert B. Hance, Sr. VP, Diabetes Care
Edward L. Michael, Exec. VP, Diagnostics Products
Abbott’s medical device and diagnostics unit made significant sales gains, increasing revenue from $5.2 billion in 2006 to $6.3 billion in 2007, which largely was driven by the company’s vascular and diabetes businesses. But if one thing dominated the news out of the company’s medical device division, it was the buzz surrounding the pending approval of its Xience V drug-coated stent.
The 120-year-old company submitted its approval application to the FDA in June 2007. In November, the FDA’s Circulatory Systems Devices panel, in a 9-to-1 vote, recommended approval—with certain conditions—of the everolimus-eluting stent system. The panel recommended post-marketing study requirements. The panel also agreed unanimously on the condition that the device label contain the same recommendations for dual anti-platelet therapy duration as the other drug-eluting stents already on the US market. Some industry watchers had predicted there were not enough long-term data to support an affirmative vote for the device.
“I believe reasonable assurance of safety was demonstrated,” said panel member Richard Page, MD of the University of Washington in Seattle, WA. “I think this represents a step forward for interventional cardiologists and our patients.”
Xience V was launched in Europe and other international markets in 2006. The FDA finally approved Xience before the July 4 holiday this year, making Abbott the fourth company to receive approval for a drug coated-stent in the US market after Johnson & Johnson, Boston Scientific and Medtronic, which recently received FDA approval for its Endeavor stent. Abbott has said clinical trial results have shown a “significant reduction” in major adverse cardiac events. Most analysts think Xience will quickly become the stent of choice, because tests have shown it may have a lower rate of blood clots forming down the road and doctors think it's easier to put in. It is a smaller, more flexible stent than earlier-generation devices.
By 2010, analysts believe Xience could generate more than $500 million in annual sales, surpassing the current market leader, Taxus, which is sold by Boston Scientific.
Overall, the company’s medical products business provided solid financial results, growing by double digits. As a result of the acquisition of Guidant’s vascular intervention and endovascular business, Abbott’s Vascular product unit posted a 53.8% increase in sales in 2007 compared with 2006—a total of $1.66 billion. The Vascular unit, however, did post a loss of $188 million. Stents contributed $672 million to sales in 2007—about the same as last year. Other coronary products totaled $604 million, up 32.5%. The company’s Diagnostics business grew 11.1% to $3.15 billion in sales. The Diabetes business increased sales 9.9% to $1.25 billion. Abbott’s Endovascular revenues grew 11.9% to reach $388 million. Both US and international markets across all product categories posted sales gains. Out of the company’s overall $25.9 billion in revenue in 2007, Abbott reported $3.61 billion in net income, more than double the previous year’s net earnings of $1.72 billion, in part due to the Guidant division purchase.
“[The year] 2007 was an outstanding year for Abbott across all of our major businesses, and our strong momentum has carried into 2008,” said CEO Miles White. “We delivered another year of strong sales and profitability. We expanded our business in important emerging economies such as China, India, Russia and Latin America. And we were highly productive in building our pipeline, providing the basis for a steady new product stream and continued future success.”
On the diagnostics side in 2007, Abbott launched the Architect c16000, its large-volume chemistry analyzer, and the Architect ci16200, which consolidates both immunoassay and clinical chemistry testing. Both systems will better meet the needs of large-volume laboratory customers by processing more tests, faster, the company said. At the beginning of 2007, GE Healthcare announced plans to acquire Abbott’s in-vitro and point-of-care diagnostic businesses for $8.13 billion. By July, however, the deal had fallen apart and the companies, whose boards both approved the merger, said they were unable to agree on final terms.
In other new product news, Abbott’s Spine division in Austin, TX unveiled the Universal Clamp spinal fixation system for the correction of scoliosis and other spinal disorders. The device consists of a polyester band, a titanium clamp and a set screw and can be used in place of, or in addition to, the screws, wires, cables and hooks that are typical in modern spine surgery.
Abbott continues to expand its reach in the blood glucose monitoring market by continuing to introduce systems that are easier to use, require smaller blood samples and provide faster results. In April 2007, Abbott Diabetes Care launched its FreeStyle Lite Blood Glucose Monitoring system for people with diabetes after receiving a 510(k) clearance from the FDA. The device eliminates the manual coding step usually required by most blood glucose meters before starting a new vial of test strips, allowing people with diabetes to test quickly and more easily. A year later, Abbott’s FreeStyle Freedom Lite Blood Glucose Monitoring System became available in the United States, along with the FreeStyle Navigator Continuous Glucose Monitoring System. Designed to discretely and continuously measure glucose levels through a sensor in the back of the upper arm or abdomen, the Navigator system provides minute-by-minute information about which way and how quickly blood sugar levels are changing. This information can lead to proactive adjustments that can result in tighter glucose ranges, the company said. It received a CE Mark in June 2007 and has been available outside the United States since September 2007.
On a management note, in August 2007, Richard A. Gonzalez, president and chief operating officer, and a member of Abbott's board of directors, retired after 30 years with the company. The heads of Abbott's four operating businesses—medical devices, pharmaceuticals, nutritionals and diagnostics—now report to White.
To drive further growth, the company spent $2.5 billion in R&D investment, up from $2.3 billion in 2006. At present, Abbott claims it is the only company with a bioabsorbable drug-eluting coronary stent in human clinical trials. The Absorb stent is made of polylactic acid and is designed to restore blood flow in clogged arteries and then be fully absorbed by the body. Also currently in development is a fully integrated blood glucose monitoring system that combines a glucose meter, test strips and lancing capabilities in one device.
KEY EXECUTIVES:
Miles D. White, Chairman and CEO
Richard W. Ashley, Exec. VP, Corporate Development
Thomas C. Freyman, Exec. VP, Finance and CFO
Joseph M. Nemmers, Jr., Exec. VP, Diagnostics
and Animal Health Divisions
John M. Capek, Exec. VP, Medical Devices
Charles D. Foltz, VP, Vascular Solutions
Robert B. Hance, Sr. VP, Diabetes Care
Edward L. Michael, Exec. VP, Diagnostics Products
NO. OF EMPLOYEES:
67,000GLOBAL HEADQUARTERS:
Chicago, ILAbbott’s medical device and diagnostics unit made significant sales gains, increasing revenue from $5.2 billion in 2006 to $6.3 billion in 2007, which largely was driven by the company’s vascular and diabetes businesses. But if one thing dominated the news out of the company’s medical device division, it was the buzz surrounding the pending approval of its Xience V drug-coated stent.
The 120-year-old company submitted its approval application to the FDA in June 2007. In November, the FDA’s Circulatory Systems Devices panel, in a 9-to-1 vote, recommended approval—with certain conditions—of the everolimus-eluting stent system. The panel recommended post-marketing study requirements. The panel also agreed unanimously on the condition that the device label contain the same recommendations for dual anti-platelet therapy duration as the other drug-eluting stents already on the US market. Some industry watchers had predicted there were not enough long-term data to support an affirmative vote for the device.
“I believe reasonable assurance of safety was demonstrated,” said panel member Richard Page, MD of the University of Washington in Seattle, WA. “I think this represents a step forward for interventional cardiologists and our patients.”
Xience V was launched in Europe and other international markets in 2006. The FDA finally approved Xience before the July 4 holiday this year, making Abbott the fourth company to receive approval for a drug coated-stent in the US market after Johnson & Johnson, Boston Scientific and Medtronic, which recently received FDA approval for its Endeavor stent. Abbott has said clinical trial results have shown a “significant reduction” in major adverse cardiac events. Most analysts think Xience will quickly become the stent of choice, because tests have shown it may have a lower rate of blood clots forming down the road and doctors think it's easier to put in. It is a smaller, more flexible stent than earlier-generation devices.
By 2010, analysts believe Xience could generate more than $500 million in annual sales, surpassing the current market leader, Taxus, which is sold by Boston Scientific.
Overall, the company’s medical products business provided solid financial results, growing by double digits. As a result of the acquisition of Guidant’s vascular intervention and endovascular business, Abbott’s Vascular product unit posted a 53.8% increase in sales in 2007 compared with 2006—a total of $1.66 billion. The Vascular unit, however, did post a loss of $188 million. Stents contributed $672 million to sales in 2007—about the same as last year. Other coronary products totaled $604 million, up 32.5%. The company’s Diagnostics business grew 11.1% to $3.15 billion in sales. The Diabetes business increased sales 9.9% to $1.25 billion. Abbott’s Endovascular revenues grew 11.9% to reach $388 million. Both US and international markets across all product categories posted sales gains. Out of the company’s overall $25.9 billion in revenue in 2007, Abbott reported $3.61 billion in net income, more than double the previous year’s net earnings of $1.72 billion, in part due to the Guidant division purchase.
“[The year] 2007 was an outstanding year for Abbott across all of our major businesses, and our strong momentum has carried into 2008,” said CEO Miles White. “We delivered another year of strong sales and profitability. We expanded our business in important emerging economies such as China, India, Russia and Latin America. And we were highly productive in building our pipeline, providing the basis for a steady new product stream and continued future success.”
On the diagnostics side in 2007, Abbott launched the Architect c16000, its large-volume chemistry analyzer, and the Architect ci16200, which consolidates both immunoassay and clinical chemistry testing. Both systems will better meet the needs of large-volume laboratory customers by processing more tests, faster, the company said. At the beginning of 2007, GE Healthcare announced plans to acquire Abbott’s in-vitro and point-of-care diagnostic businesses for $8.13 billion. By July, however, the deal had fallen apart and the companies, whose boards both approved the merger, said they were unable to agree on final terms.
In other new product news, Abbott’s Spine division in Austin, TX unveiled the Universal Clamp spinal fixation system for the correction of scoliosis and other spinal disorders. The device consists of a polyester band, a titanium clamp and a set screw and can be used in place of, or in addition to, the screws, wires, cables and hooks that are typical in modern spine surgery.
Abbott continues to expand its reach in the blood glucose monitoring market by continuing to introduce systems that are easier to use, require smaller blood samples and provide faster results. In April 2007, Abbott Diabetes Care launched its FreeStyle Lite Blood Glucose Monitoring system for people with diabetes after receiving a 510(k) clearance from the FDA. The device eliminates the manual coding step usually required by most blood glucose meters before starting a new vial of test strips, allowing people with diabetes to test quickly and more easily. A year later, Abbott’s FreeStyle Freedom Lite Blood Glucose Monitoring System became available in the United States, along with the FreeStyle Navigator Continuous Glucose Monitoring System. Designed to discretely and continuously measure glucose levels through a sensor in the back of the upper arm or abdomen, the Navigator system provides minute-by-minute information about which way and how quickly blood sugar levels are changing. This information can lead to proactive adjustments that can result in tighter glucose ranges, the company said. It received a CE Mark in June 2007 and has been available outside the United States since September 2007.
On a management note, in August 2007, Richard A. Gonzalez, president and chief operating officer, and a member of Abbott's board of directors, retired after 30 years with the company. The heads of Abbott's four operating businesses—medical devices, pharmaceuticals, nutritionals and diagnostics—now report to White.
To drive further growth, the company spent $2.5 billion in R&D investment, up from $2.3 billion in 2006. At present, Abbott claims it is the only company with a bioabsorbable drug-eluting coronary stent in human clinical trials. The Absorb stent is made of polylactic acid and is designed to restore blood flow in clogged arteries and then be fully absorbed by the body. Also currently in development is a fully integrated blood glucose monitoring system that combines a glucose meter, test strips and lancing capabilities in one device.