Abbott Laboratories nudged up its full-year profit guidance as strong growth in its medical-devices segment helped quarterly results beat estimates.
Medical device sales grew 12% led by strong performance for the company’s Libre blood glucose monitor.
The company said it will use a mix of TV advertisements and guerilla marketing as well as seek to personalise health data to tap people without diabetes for the US launch of its glucose monitoring device, its chief executive Robert Ford said.
The company plans to launch the over-the-counter device, Lingo, this year. It could be a multi-billion-dollar product for Abbott, Mr Ford estimated, adding it was still in its early days.
Lingo and Libre Rio, another of Abbott’s devices, received clearance from the US Food and Drug Administration’s last month.
Lingo targets consumers who want to better understand their health, while Libre Rio is for adults with type 2 diabetes who do not need insulin.
Abbott is a key player in the market for continuous glucose monitors sold under prescription to diabetes patients, along with rivals DexCom and Medtronic, which has significant operations in Ireland.
FreeStyle Libre, Abbott’s blood sugar monitor, generated $1.6bn (€1.4bn) in sales globally in the second quarter. However, the company said the marketing for a consumer product would greatly differ from that for a medical device. The device is partly manufactured at Abbott’s extensive facilities in Ireland. Mr Ford said:
Guerilla marketing uses tactics such as on-ground outreach, social media campaigns, among others, and usually involve low budgets.
Mr Ford expects sales growth for Lingo to ramp up over time as the company builds the market.
RBC Capital Markets analyst Shagun Singh does not currently model much in sales of Abbott and Dexcom’s OTC products, but believes the market would be significant.
Abbott is “literally just launching it this summer. So there will be a lot to learn for us, but substantial opportunities for both companies,” said Ms Singh.
The company’s stock was little changed before US markets opened and has lost 4.9% this year through Wednesday’s close.
The results in medical devices, especially those used for patients with diabetes, helped ease concerns about litigation related to the company’s baby formula products.
Abbott hid the risks of its premature-infant formula causing a potentially fatal bowel disease from parents even though company officials acknowledged the peril in internal documents, a lawyer told a Missouri jury recently.
The company was accused of putting profits over safety by an attorney for the mother of a premature baby girl who developed necrotising enterocolitis, or NEC, and suffered brain damage after being fed Abbott’s Similac Special Care 24, a cow’s milk-based formula.
The trial that kicked off in early July is the first of more than 1,000 such claims against Abbott and other formula makers to be presented to a jury.
- Reporting by Reuters, Bloomberg, and the Irish Examiner