reported strong Humira sales and edged just above third-quarter estimates Wednesday. But the drugmaker, which is gearing up for potential product approvals in the first half of next year, suffered off-setting charges related to its Guidant acquisition.
Abbott earned 67 cents a share, excluding items, in the quarter ended Sept. 30, on sales of $6.4 billion. The results beat the 58 cents a share it earned in the prior-year period as well as the company's guidance of 64 cents to 66 cents a share. Analysts surveyed by Thomson Financial had expected earnings of 66 cents a share on revenue of $6.2 billion.
However, charges left the company reporting net earnings of $717 million, or 46 cents a share after items, flat with the $716 million, or 46 cents a share, it reported in the comparable 2006 quarter.
U.S. pharmaceutical sales increased 18% and international pharmaceutical sales increased 22%, driven by double-digit growth in Humira (for Crohn's disease), HIV treatment Kaletra and cholesterol drug TriCor, as well as $167 million of sales from cholesterol drug Niaspan.
Worldwide medical products sales increased 12%, supported by 14% growth in diabetes care sales, 15% growth in Abbott Vascular sales and 14% growth in diagnostics sales.
Humira sales in particular increased 49% globally to $803 million. Looking ahead, based on the sales performance of Humira, Abbott estimates 2007 global sales of $3 billion. Abbott launched Humira in the U.S. and Europe for Crohn's disease in the first half of 2007. It also has filed for regulatory approval for psoriasis and juvenile rheumatoid arthritis, expecting to launch the drug as a treatment for those indications in the first half of 2008. (It's also in phase III development for ulcerative colitis).
The company confirmed its 2007 earnings outlook and raised the lower end of its previous guidance range. It now expects to report $2.82 to $2.84 a share for the year before items (compared to $2.80 to $2.84) and 91 cents to 93 cents for the fourth quarter, on the same basis.
Abbott approximated specified items of 44 cents a share for the full-year 2007 and 7 cents a share for the fourth quarter, primarily associated with acquisition integration, cost-reduction initiatives, a writedown of Omnicef inventory and adjustments related to its ownership of
stock (as previously disclosed). Including those items, Abbott expects to earn $2.38 to $2.40 a share for the full-year 2007 and 84 cents to 86 cents a share in the fourth quarter on the same GAAP basis.
Abbott said on a conference call Wednesday morning that the 2008 estimates already factor in risk-associated pressure from competition after patent expiration for Depakote DR in 2008 and don't assume an upside from a pending Food and Drug Administration decision on its Xience stent that's expected in the first half of 2008.
Abbott filed for regulatory approval of the Xience V drug-eluting stent in May and is working toward a Nov. 29 date for an FDA advisory panel meeting. Next week at the Transcatheter Cardiovascular Therapeutics (TCT) meeting, the company will present new data from the Xience V clinical program and will conduct an investor meeting Oct. 23. The stent was launched internationally in 2006.
In the Wednesday call, the company noted that the market for stents is clearly different than when it acquired Guidant in 2006 but noted that it's a market the company is barely participating in globally, and with the quality and efficacy of the product it continues to think it will get more than enough profit from this product to justify the acquisition.
"We would expect another year of strong double-digit growth. As we look into 2008, there's tons of potential in this market. We're building a very large plant in Singapore and we're putting our money behind our forecast," the company said in the call.
Shares rose 56 cents, or 1.1%, to $52.54 in recent trading.