07.27.09
$7.2 Billion ($29.5B total)
KEY EXECUTIVES:
Miles D. White, Chairman and CEO
Richard W. Ashley, Exec. VP, Corporate Development
Thomas C. Freyman, Exec. VP, Finance and CFO
John M. Capek, Exec. VP, Medical Devices
Robert B. Hance, Sr. VP, Vascular
Heather L. Mason, Sr. VP, Diabetes Care
Cecilia L. Kimberlin, Ph.D., VP Quality, Medical Products
NO. OF EMPLOYEES: 68,800
GLOBAL HEADQUARTERS: Abbott Park, Ill.
Abbott Laboratories may earn the majority of its billions in the pharmaceutical sector, but its medical device-related businesses certainly are no afterthought. In fact, 2008 brought some key reorganization through divestiture and acquisition to better position the company in key device sectors and take advantage of internal synergies.
KEY EXECUTIVES:
Miles D. White, Chairman and CEO
Richard W. Ashley, Exec. VP, Corporate Development
Thomas C. Freyman, Exec. VP, Finance and CFO
John M. Capek, Exec. VP, Medical Devices
Robert B. Hance, Sr. VP, Vascular
Heather L. Mason, Sr. VP, Diabetes Care
Cecilia L. Kimberlin, Ph.D., VP Quality, Medical Products
NO. OF EMPLOYEES: 68,800
GLOBAL HEADQUARTERS: Abbott Park, Ill.
Abbott Laboratories may earn the majority of its billions in the pharmaceutical sector, but its medical device-related businesses certainly are no afterthought. In fact, 2008 brought some key reorganization through divestiture and acquisition to better position the company in key device sectors and take advantage of internal synergies.
According to the company, worldwide revenues for its Medical Products business were $7.2 billion in 2008, up from $6.3 billion in 2007. The product categories that fall into the firm’s medical device business unit include: Animal Health, Diabetes Care, Laboratory Diagnostics, Molecular Diagnostics, Point-of-Care Diagnostics and Vascular (Coronary, Endovascular and Vessel Closure). In its detailed financials, the company breaks out revenue for Diagnostics and Vascular but lumps most of the remaining sectors into an “Other” category—so we were unable to provide a completely precise outline of each sub unit’s performance.
However, what was reported painted a pretty rosy picture of the 120-year-old company’s device performance—particularly its Vascular business, which released one of its highest-profile products in 2008.
Overall sales growth across all business was 13.9 percent, reaching $29.5 billion—fueled by double-digit growth in pharmaceuticals, nutritionals and medical products. The company’s Diagnostics unit increased sales by 13.2 percent to approximately $3.6 billion. The Vascular business increased 34.7 percent, reaching $2.2 billion, up from $1.7 billion last year. Operating earnings for Diagnostics was $375 million, up from $252 million. Vascular’s solid performance pulled an operating earnings loss of $188 million in ’07 into the black with $205 million for 2008. The Vascular division clearly benefited from the July 2008 U.S. Food and Drug Administration (FDA) approval of its Xience V drug-eluting stent for the treatment of coronary artery disease.
The company claims the device is the only drug-eluting stent to demonstrate superiority in reducing vessel re-narrowing in two randomized, pivotal clinical trials. The company quickly began a post-approval study of the stent, per requirements of the FDA.
“Xience V represents an important treatment advance for the estimated 13 million people in the United States suffering from coronary artery disease, and we believe Xience V will quickly become the new standard for drug eluting stents given its outstanding clinical results,” said John M. Capek, Ph.D., executive vice president, Medical Devices. “Physicians in the United States have been waiting for years to treat their patients with a technology that delivers on the promise of drug eluting stents through both ease of use and excellent clinical performance, and Xience V is that technology.”
Also in 2008, Xience V was submitted for approval in Japan. Xience V was launched in Europe and other international markets in 2006. Xience expanded its reach in Europe in 2008, receiving CE Mark for a smaller version—2.25 millimeters. The narrower version also was launched in select countries in Asia and Latin America. In addition to the 2.25 mm stent, the tiny mesh device is available in stent diameters of 2.5 mm, 2.75 mm, 3.0 mm, 3.5 mm and 4.0 mm for lesions 28 millimeters or shorter. By 2010, some analysts have predicted that Xience could generate more than $500 million in annual sales, surpassing the current market leader, Taxus, which is sold by Natick, Mass.-based Boston Scientific Corp. The company’s coronary stent sales ($669 million for FY 2008) increased a whopping 78.4 percent for the year as a result.
To build on its success with Xience, Abbott currently has a bioabsorbable stent undergoing clinical trials. According to preliminary results from its ABSORB trial, released in October, the new stent is absorbed within two years, leaving behind functioning blood vessels. Abbott’s bioabsorbable everolimus-eluting coronary stent is made of polylactic acid, a proven biocompatible material that is commonly used in medical implants such as dissolvable sutures. As with a metallic stent, Abbott’s bioabsorbable stent is designed to restore blood flow by propping a clogged vessel open, and to provide support until the blood vessel heals. Unlike a metallic stent, however, a bioabsorbable stent is designed to be metabolized by the body slowly and completely absorbed over time.
Other notable new device introductions for the year include additions to successful product lines: the StarClose SE (Safe and Extravascular) Vascular Closure System and FreeStyle Navigator Continuous Glucose Monitoring System.
StarClose SE is a next-generation vessel-closure device designed to seal the femoral artery access site following a catheterization procedure. Released in May, StarClose SE now is available in the United States and Europe. StarClose SE uses the same nitinol (nickel and titanium) clip technology as existing StarClose instruments. When deployed, the small nitinol clip grasps the tissue on top of the artery around the access site in a purse-string fashion and closes the opening in the femoral artery rapidly and securely with minimal affect to the lumen diameter or the blood flow inside the vessel.
In March 2008, the FDA approved the FreeStyle Navigator Continuous Glucose Monitoring System for people with diabetes. The device is designed to discretely and continuously measure glucose levels through a sensor in the back of the upper arm or abdomen. Abbott's FreeStyle 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, according to the company. Before adjusting therapy for diabetes management based on the results and alarms from the FreeStyle Navigator system, traditional blood glucose tests must be performed. The device received CE Mark in June 2007 and has been available outside the United States since September 2007. For the year, Abbott spent approximately $2.7 billion on research and development.
This information can lead to proactive adjustments that can result in tighter glucose ranges, according to the company. Before adjusting therapy for diabetes management based on the results and alarms from the FreeStyle Navigator system, traditional blood glucose tests must be performed. The device received CE Mark in June 2007 and has been available outside the United States since September 2007. For the year, Abbott spent approximately $2.7 billion on research and development.
For 2008, the company said goodbye to its Spine business. Officials decided to shed the business “in order to concentrate on our core businesses and other new opportunities in keeping with our growth profile.” Warsaw, Ind.-based Zimmer purchased Abbott Spine for approximately $360 million in cash. The deal was announced in September. Abbott Spine had 2007 revenues of $109 million, while Zimmer Spine’s revenues for the same period were $197 million. Founded in 1996, Abbott Spine has its U.S. headquarters in Austin, Texas, and an international facility in Bordeaux, France. Abbott Spine primarily manufacturers screw systems and stabilizer systems.
From the sale of one asset to the purchase of a major new division, Abbott kicked off 2008 with a bang. In January, the company announced the blockbuster purchase of Advanced Medical Optics. Abbott paid $22 per share to buy the Santa Ana, Calif.-based firm, a leader in LASIK surgical devices, according to a news release. The acquisition cost roughly $2.8 billion in cash and assumed debt. The $22–per-share purchase price is a premium of nearly 150 percent over company’s closing price of $8.85 when the deal was announced. Jim Mazzo, chairman and CEO of Advanced Medical Optics, will join Abbott and become president of the Advanced Medical Optics unit under the terms of the purchase agreement.