Abbott Laboratories (ABT - Free Report) recently announced the receipt of the FDA’s approval for its next-generation FreeStyle Libre 2 integrated continuous glucose monitoring (“iCGM”) system for use in diabetic adults and children who are aged 4 years and above. Notably, the system is the most durable self-applied iCGM sensor currently available in the market and costs a third of other available CGMs.
The FreeStyle Libre 2 system will be available in the upcoming weeks at participating pharmacies and durable medical equipment suppliers across the United States. The system will be available at the same price as that of the currently available FreeStyle Libre 14 day system, which was cleared by the FDA in July 2018.
The company has secured partial or full reimbursement for the FreeStyle Libre system in 36 countries, including Canada, France, Germany, Japan, the U.K. and the United States.
With the latest milestone, Abbott aims to fortify grounds in the global CGM market, thus boosting its Medical Devices segment. The FreeStyle Libre portfolio is a component of the company’s diabetes care business.
Significance of the Approval
The FreeStyle Libre 2 system uses Bluetooth technology to notify the users about their fluctuating glucose levels without the need to scan the sensor. The iCGM system is armed with customizable real-time alarms, which can be turned off by the users.
To date, it is the only iCGM system with optional real-time alarms that measures glucose levels every minute for 14 days. This includes superior day one accuracy unlike other available iCGMs as well as accuracy and alarm performance at low glucose levels.
Per a report by Grand View Research, the global CGM device market size was valued at $3,929.7 million in 2019 and is anticipated to reach $10.4 billion by 2027 at a CAGR of 12.7%. Factors like rising incidents of diabetes and increasing adoption of CGM devices are expected to drive the market.
Given the market potential, this well-timed clearance will provide a boost to the company’s business.
Recent Developments in Diabetes Care
Of late, Abbott has been witnessing a slew of developments in its business arm.
The company announced new late-breaking data in June, which illustrated that use of its FreeStyle Libre system is associated with significant reduction in hemoglobin A1c levels for people having type 2 diabetes on either long-acting insulin or non-insulin therapy.
In April, Abbott announced the receipt of Health Canada’s authorization for the use of FreeStyle Libre system in hospital setting during the COVID-19 pandemic. This will enable frontline healthcare workers to remotely monitor patients' glucose status and history. Additionally, Abbott announced that it will donate 3,000 FreeStyle Libre sensors to ensure hospitals in need have immediate access to the technology.
During the company’s first-quarter 2020 earnings call in April, it confirmed that Freestyle Libre continued to be accepted by new users throughout the quarter at an impressive rate, reflected in the robust sales growth. Abbott also continued to expand reimbursement coverage for Libre globally, including recently becoming the only CGM system to obtain reimbursement in Japan for Type 2 diabetic patients.
In the same month, the company also announced that the FDA has allowed the use of FreeStyle Libre 14 day system in the hospital settings during the COVID-19 pandemic. Further, to help hospitals and medical centers in COVID-19 outbreak hotspots to achieve better access to the technology, Abbott will donate 25,000 FreeStyle Libre 14 day sensors in partnership with the American Diabetes Association, Insulin for Life USA and Diabetes Disaster Response Coalition.
Shares of the company have gained 9.1% in the past year against the industry’s 5.3% fall and the S&P 500's 6.1% rise.
Zacks Rank & Key Picks
Currently, Abbott carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Quest Diagnostics Incorporated (DGX - Free Report) , Hologic, Inc. (HOLX - Free Report) and QIAGEN N.V. (QGEN - Free Report) .
Quest Diagnostics’ long-term earnings growth rate is projected at 7.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic’s long-term earnings growth rate is estimated at 7%. The company presently has a Zacks Rank #2.
QIAGEN’s long-term earnings growth rate is estimated at 12.2%. It currently sports a Zacks Rank #1.
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