Abbott Downsizes California Plant

Abbott Laboratories (ABT) is ending 2014 the same way it started the year--with layoffs.

Abbott Vascular laid off 100 employees at its Temecula, CA, plant last week. The plant, which makes stents, dilation catheters, and other cardiac devices, now has 1700 employees, according to Abbott spokesperson Steve Kelly. That's down from a high of 4,000, according to a report in the Riverside Press Enterprise.

"We're making adjustments to our workforce to increase efficiencies and remain competitive in a challenging global environment," Kelly said in a statement to the newspaper.

Abbott started 2014 by laying off an unspecified number of employees at its Abbott Park, IL, headquarters.

Despite the multiple waves of reductions at the Temecula plant, the company has repeatedly emphasized its importance to the future of the business as a manufacturing site for the company's trend-setting bioabsorbable scaffold, the Absorb.

Abbott was the first company to offer a dissolvable stent. However, it now faces competition from Boston Scientific's Synergy and Elixir Medical's DESolve.

Sales growth for Abbott's vascular devices "was relatively flat" in the third quarter of 2014, Brian Yoor, vice president of investor relations for Abbott, said in an October call to analysts, according to a Seeking Alpha transcript.

A separate September 2014 report on Seeking Alpha said that medical devices accounted for only 13.8% of Abbott's sales in 2013, following nutritional products (30.8%), diagnostics (20.8%), and established, branded pharmaceuticals, (22.8%).

Abbott began pursuing sales of Absorb in Japan and India in 2013. Emerging market sales will represent nearly 50% of Abbott's total sales and increased 15% in the quarter with double-digit growth and established pharmaceuticals, nutrition and diagnostic, the report said.

Illinois-based Abbott obtained Guidant Corp.'s vascular business and its Temecula facility, which produced stents and other devices, in a 2006 multibillion-dollar transaction that involved Boston Scientific and a competing bid by Johnson & Johnson.

We reported last week that Boston Scientific is facing a multibillion-dollar lawsuit trial related to the Guidant deal. Johnson & Johnson is alleging that Guidant improperly fed due diligence information directly to Abbott Laboratories before the acquisition.

Nancy Crotti is a contributor to Qmed and MPMN.

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