Abbott Labs (ABT - Analyst Report) recently announced that it has obtained the CE Marking (Conformite Europeenne) in Europe for its glucose monitoring system – FreeStyle Optium Neo Blood Glucose and Ketone Monitoring System.
The CE mark is a mandatory confirmation for products placed in the European markets.
In Jul 2013, Abbott Labs obtained the U.S. Food and Drug Administration (FDA) clearance for its FreeStyle Precision Pro Blood Glucose and β-Ketone Monitoring System.
We note that Abbott Labs continues to invest in the development of innovative technologies in its diabetes care business. The company is currently investing in the next-generation sensing technology which it expects to initially launch in the European markets in the second half of 2014.
Abbott Labs expects diabetes care sales growth to be relatively flat in the third quarter of 2013.
Although growth in the emerging markets is forecasted to be strong, Abbott Labs expects the implementation of Centers for Medicare and Medicaid Services (CMS) competitive bidding for Medicare patients to impact sales in the U.S. in the remainder of the year.
Sales from diabetes care business declined marginally in the second quarter of 2013. Share gains in the hospital and retail units in the U.S. were offset by market pricing and reimbursement pressures. International sales climbed 4% driven by the continued uptake of FreeStyle InsuLinx Meter along with growth in the emerging markets continues to positively impact sales in international markets.
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.
We believe the diversification bodes well for Abbott Labs and should enable the company to counter the challenging business environment as a result of austerity measures undertaken by developed markets in 2013 coupled with weak economic conditions elsewhere.
Abbott Labs, a large cap pharma company, currently carries a Zacks Rank #3 (Hold). Right now, large cap pharma stocks that look well-placed include Bayer (BAYRY - Analyst Report) and Novo Nordisk (NVO - Analyst Report). Both carry a Zacks Rank #2 (Buy).