Abbott Laboratories (ABT - Analyst Report) recently announced that the company has gained approval from the US Food and Drug Administration (FDA) for its TECNIS Toric 1-Piece intraocular lens (IOL). The company gained approval for treating cataract patients with pre-existing corneal astigmatism.
Abbott Labs has launched the product following the approval.
Corneal astigmatism results in blurred vision as it prevents light rays from focusing clearly on the retina. We note that the new product from Abbott Labs is superior to conventional IOLs since it has the ability to correct the loss of focus due to pre-existing corneal astigmatism of one diopter or greater.
As per Abbott Labs, the number of surgeries is expected to grow nearly 3% each year driven by an aging US population which should fuel patient demand for improved, precise visual outcomes and independence from glasses.
We note that cataract sales accounted for 60% of the company’s total medical optics in the first quarter of 2013 driven by solid growth of its TECNIS brand of intraocular lenses. In particular, growth was strong in emerging markets. Meanwhile, sales of Medical Optics were down 0.6% in the first quarter of 2013 as growth in cataract sales was partially offset by a modest decline in refractive sales driven by continued soft market conditions.
Going forward, Abbott Labs expects to launch several products in the cataract segment such as TECNIS Preloaded IOLs in 2013. In addition, the Japanese launch of Tecnis OptiBlue IOL in the first quarter of 2013 should further propel growth of cataract sales.
Abbott Labs expects low-single digit sales growth in its vision care business in the second quarter of 2013 (excluding the impact of foreign exchange).
We remind investors that in Jan 2013, Abbott Labs separated its research-based pharmaceuticals business by creating a new company – AbbVie (ABBV - Analyst Report).
Following the move, Abbott Labs became a diversified medical products company with a presence in branded generic pharmaceutical, devices, diagnostic and nutritional businesses.
Abbott intends to increase its presence in emerging markets, which provide a substantial opportunity for growth, given the rise in middle-class income and aging population. The diversification should enable Abbott to penetrate these markets and capture market share.
Abbott Labs currently carries a Zacks Rank #3 (Hold). As of now, Nuvasive (NUVA - Analyst Report) looks attractive with a Zacks Rank #1 (Strong Buy). Exactech (EXAC - Snapshot Report) also looks well placed with a Zacks Rank #2 (Buy).