Abbott Going Gangbusters on MitraClip Sales

Nancy Crotti

July 20, 2016

4 Min Read
Abbott Going Gangbusters on MitraClip Sales

Abbott CEO Miles White is also pleased with St. Jude results, but still noncommittal about Alere deal.

Nancy Crotti

A double-digit increase in sales of Abbott Laboratories' MitraClip cardiac device helped boost the company's strong medical device performance for the second quarter of 2016.

The MitraClip is first-in-class technology that treats mitral regurgitation. Delivered to the heart via a catheter through the femoral vein, it eliminates the need for open-heart surgery in medically fragile patients.

MitraClip sales helped boost Abbott's medtech sales to $1.37 billion worldwide for the quarter, including $535 million in the United States and $837 million abroad. That's a boost of 6.4% over the same quarter of 2015.

The MitraClip is the first transcatheter mitral valve repair technology approved in the U.S. So its brisk sales suggest a strong market for such devices

In an analyst call transcribed by Seeking Alpha, Abbott CEO Miles White said he was pleased with the second quarter results reported for St. Jude Medical, which Abbott intends to acquire for $25 billion by the end of 2016. St. Jude reported sales of $1.56 billion for the quarter, up 11% from the second quarter 2015.

Except for traditional cardiac rhythm management devices, which slumped by 8% due to lower U.S. sales, St. Jude's revenues were up across the board. Sales from ventricular assist devices acquired in its Thoratec purchase sent sales from heart-failure devices soaring by 48 percent to $384 million compared with the same quarter a year ago.

St. Jude CEO Michael Rousseau told investors in that company's earnings call that plans for the sale to Abbott continue apace.

"We have established an integration team with functional area leaders from our respective organizations, working to prepare for a seamless integration after the deal closes," Rousseau said in a transcript by SeekingAlpha.

Abbott's other acquisition target, Alere, prompted a mixed commentary from White. Alere still hasn't filed its 2015 financial report with the SEC, and remains under investigation by U.S. Department of Justice regarding its sales practices for 2013 through 2015 in Asia, Africa, and Latin America, and to matters related to the U.S. Foreign Corrupt Practices Act.

Just last week, Alere announced it is withdrawing a blood-testing system from the global market after improvements to its software system failed to satisfy FDA. It also said that it is "continuing to work diligently to complete" the review of the sales records in question, in which it acknowledged "we had incorrectly recorded the timing of recognition of certain revenue transactions for such periods."

"The company does not currently expect that any of these misstatements identified to date would be material, individually or in the aggregate, to any of our previously-issued quarterly or annual financial statements," Alere concluded in a press release.

White called Alere's latest announcement "not forthcoming" and said Alere has not provided Abbott with "a fair amount" of the information it has requested. "I think we're in a waiting situation here," he concluded.

He also sought to assure anxious investors that Alere is in good hands.

"They've had challenges for a number of years and the management team that's there right now, has been there just a little more than two years, they have dealt well with a lot of the challenges Alere has," White told analysts. "One thing I'm certain of is that they are trying to do everything they can their way to address the challenges in the company."

White estimated that FDA would approve the FreeStyle Libre continuous glucose monitor for sale in the U.S. in the first quarter of 2017. Abbott medtech products also include carotid stents, guidewires, LASIK technology, and other mitral valve and peripheral artery disease devices.

On the upside for Abbott, sales of vascular products hit $782 million for the quarter, including $569 million in coronary device sales, the company noted.

It was a big quarter for Abbott, which announced its proposed $25 billion acquisition of St. Jude Medical in late April. Abbott also received FDA approval for its fully dissolving heart stent, the Absorb, in July. FDA also approved the company's Tecnis Symfony intraocular lenses, which extend depth of focus for people with cataracts, another first.

Total sales reached $5.3 billion for the quarter, up 3.2% from last year.

"It was a good quarter," White said in a statement. "We're particularly pleased with the steady cadence of new product approvals and recent launches that are contributing to growth, including FreeStyle Libre, MitraClip, Absorb and Symfony."

Nancy Crotti is a contributor to Qmed.

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About the Author(s)

Nancy Crotti

Nancy Crotti is a frequent contributor to MD+DI. Reach her at [email protected].

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