Abbott ups forecast on better-than-expected third quarter results

Diversified US health care major Abbott Laboratories pleased investors, after posting third-quarter 2009 results that beat its own expectations and caused the company to increase its full-year earnings guidance to $3.70 to $3.72 per share, up from $3.65 to $3.70 per share. Analysts' consensus forecasts were for $3.69 per share, according to Thomson Reuters. The firm's share price gained 3% on the news.

Group turnover was up 3.5% to $7.76 billion, in line with Wall Street expectation, hindered by the strong dollar, without which sales would have risen 8.4%. Abbott said it had earned $1.48 billion, or 95 cents per share, up from $1.09 billion, or 69 cents per share, a year earlier. The results included a gain of $287 million from a previously announced settlement with Medtronic over heart stent technology.Global prescription drug sales fell 1.6 percent to $4.1 billion, impacted by new generic forms of Abbott's anti-epileptic drug Depakote (valproic acid). However, this is still better than the 4.3% downturn seen in drug sales in the second quarter.

Strong showing from Humira

The latter disappointment was offset by the firm's best selling drug Humira (adalimumab), for rheumatoid arthritis, sales of which rose 24% to $1.49 billion. This was about $30 million ahead of Wall Street expectations, according to the average estimate of five analysts polled by Thomson Reuters. Including the negative impact of foreign exchange, Abbott expects Humira sales growth of 18-20%, up from its earlier guidance.

The company's lipids franchise, TriCor (fenofibrate) and the recently-approved TriLipix (fenofibric acid) contributed $330 million, down 1.1%, while Niaspan (niacin) generated $215 million, up 0.6%. The prostate cancer therapy Lupron (leuprolide) fell 11.5% to $195 million, while revenue from the HIV drug Kaletra (lopinavir/ritonavir) fell 8.7% to $353 million. Turnover of the hypothyroid product Synthroid (levothyroxine) increased 3.7% to $134 million.

Sales of Abbott's drug-coated stents, includingXience, rose 10% to about $330 million in the quarter. Company officials predicted Xience, already the market leader, will capture greater share in coming months due to new data showing advantages over rival stents used to prop open heart arteries that have been cleared of plaque. The Vascular division continued to perform well, with sales increasing 4.7% to $666 million.

"Abbott is performing well, generating higher-than-expected earnings growth in the third quarter," said Miles White, chairman and chief executive officer, Abbott. "During the quarter, we announced several acquisitions that support our long-term growth strategy. These acquisitions add to our diverse mix of global businesses, with new technologies, established products and emerging market infrastructure that will help us deliver sustainable industry-leading growth.

In particular, last month, Abbott announced plans to buy Belgian firm Solvay pharmaceuticals unit for $6.6 billion in cash. The deal, the second-biggest in the US company's history, would give it a number of new medicines in late-stage development, including treatments for Parkinson's disease and other neurological conditions.