Abbott Labs (ABT - Analyst Report) recently announced that it has initiated a randomized controlled study in Japan to evaluate Absorb, its bioresorbable vascular scaffold (BVS) device, in patients suffering from coronary artery disease (CAD).
About 400 patients will be enrolled in the study, ABSORB Japan, that will compare Absorb BVS to the company’s Xience family of metallic drug eluting stents. The primary endpoint of the study is target lesion failure (TLF) in the first year, which will test both the safety and efficacy of the device.
Moreover, the trial includes state-of-the-art imaging techniques which will help to study the impact of treatment with Absorb in the blood vessel.
Abbott Labs expects to use results from this trial to support regulatory filings with the Japanese Pharmaceutical and Medical Devices Agency (PMDA) for gaining approval for the device. We note that Absorb obtained CE mark in Europe. However, it is not approved in the US yet.
The vascular business is a core part of Abbott Labs’ product portfolio and generated sales of $742 million in the first quarter of 2013, down 7.7% from the year-ago period. Of the total vascular sales, approximately $387 million came from the sale of drug-eluting stents and the BVS product portfolio.
Abbott Labs is continuously working to boost its vascular products portfolio and expects to launch several products in the next five years. The launch of new products should help the company to combat the decline in vascular sales due to pricing pressure, in our view.
We remind investors that Abbott Labs became a diversified medical products company focusing on branded generic pharmaceutical, medical devices, diagnostic and nutritional businesses following the separation of its research-based pharmaceuticals business into a new company, AbbVie Inc. (ABBV - Analyst Report), in Jan 2013.
The business environment continues to be challenging in 2013 due to austerity measures undertaken by developed markets and weak economic conditions elsewhere. We believe Abbott Labs’ diversification in varied business lines will enable the company to counter the challenging business environment and maintain top-line growth.
Abbott Labs currently carries a Zacks Rank #3 (Hold). Right now, AtriCure, Inc. (ATRC - Snapshot Report) and Baxano Surgical, Inc. (BAXS - Snapshot Report) look well placed. Both carry a Zacks Rank #2 (Buy).