Abbott (ABT - Free Report) recently announced the launch of the latest generation of the Afinion test system — Afinion 2 analyzer — in the United States. This system delivers accurate hemoglobin A1c (HbA1c) results in 3 minutes and albumin to creatinine ratio (ACR) results in 5 minutes. Therefore, the product will enable healthcare providers to adhere to American Diabetes Association (ADA) testing guidelines efficiently and promptly.
What Is Afinion 2 Analyzer Rapid Test System?
The Afinion 2 analyzer is a rapid and compact multi-assay platform which is capable of streamlining and simplifying the delivery of actionable and accurate measurements of HbA1c and ACR results at the point of care. The Afinion 2 platform also provides all-in-one connectivity to laboratory and hospital information systems (LIS/HIS), which enables healthcare providers to use it in various out-patient settings.
Per the ADA, regular measuring of HbA1c and ACR levels are effective for long-term management of patients diagnosed with diabetes. Given the host of benefits it offers, we are upbeat about the launch of the Afinion 2 analyzer system which is expected to boost the top-line contributions from the Diagnostics division.
A Glimpse at the Diagnostics Business
Abbott’s Diagnostics division manufacturesand markets diagnostic systems as well as tests in four business lines — Core Laboratory, Molecular, Point of Care and Rapid Diagnostics (reflects sales from Alere, which was acquired on Oct. 3, 2017). The division accounted for 24.9% of total sales in first-quarter 2018.
In the last reported quarter, the Diagnostics revenues grew 58.7% year over year (up 5.5% on a comparable operational basis) driven by better-than-expected performance of the company’s Rapid Diagnostics business and strength in flu season across the United States.
Notably, Rapid Diagnostics recorded sales of $559 million, driven by solid contributions from infectious disease testing that include flu and strep testing. Further, management projects the uptrend in this division to continue on the back of new product launches, benefits from Alere acquisition and strength in Alinity test platform.
Theprevailing demographics are in favor of high incidence of diabetes among individuals. Per a report from Mordor Intelligence, the global market for diabetes care devices is expected to attain a value of $30.25 billion by 2021. Further, per Abbott, more than 30 million people (or 9.4% of the total population) in the United States are suffering from diabetes. Thus, under such circumstances, we conclude that the developmental steps undertaken by the company seem to be progressive and are strategically aligned.
Abbott has been gaining investors’ optimism on consistently positive results. Over the past six months, the stock has outperformed the industry. Shares of the company have gained 9.9% compared with the industry’s rise of 7.9%.
Zacks Rank & Stocks to Consider
Abbott currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical sector are Intuitive Surgical (ISRG - Free Report) , Illumina, Inc. (ILMN - Free Report) and Amedisys, Inc. (AMED - Free Report) . While Intuitive Surgical and Illumina sport a Zacks Rank #1 (Strong Buy), Amedisys carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has an expected long-term earnings growth rate of 12.1%.
Illumina expects long-term earnings growth of 20%.
Amedisys has an expected long-term earnings growth rate of 17.5%.
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