Rank: #3 (Last year: #3) $28.32 Billion ($42B total)
Prior Fiscal: $26.87 Billion
Percentage Change: +5.4%
R&D Expenditure: $2.8B
Best FY24 Quarter: Q4 $7.57B
Latest Quarter: Q1 $6.95B
No. of Employees: 114,000 (total)
Global Headquarters: Abbott Park, Ill.

Mixed reality (MR) is a form of virtual reality (VR) that blends the real world with digital elements so users can interact with both virtual and physical objects simultaneously. VR has been demonstrated to benefit patients undergoing procedures that require inserting a needle, so Abbott Labs decided that MR might be useful for blood donation given its usability, impact on anxiety, and safety.

Adult blood donors donned a Microsoft HoloLens 2 MR headset with Abbott and Blood Centers of America-developed software called Paragon to wear while donating blood. In Paragon, an avatar guides the wearer to focus on a superimposed bag, from which seeds are selected and planted to grow colorful trees and flowers in the visual environment (blood collection) area. Calming background music accompanies the experience, which lasts about eight minutes and concludes with a positive message about donating blood.

Of the 142 donors who reported pre-donation anxiety, 68.4% said using mixed reality during donation decreased their anxiety. For donors who tried mixed reality while donating, 89.2% said they wanted to come back to donate again.

The innovation was designed to help boost the sustainability of the nation’s blood supply and attract younger people because blood centers have lost about 30% of donors under the age of 30 over the last decade. On average, only 3% of the eligible U.S. population donates blood each year. In the pilot study, 54% of donors with baseline reported anxiety said they would use mixed reality again, with the highest future interest in young donors.

“The adoption of mixed reality in blood donation is a significant innovation, particularly for attracting new donors. By making the donation process more engaging and less intimidating, this innovation can play a crucial role in increasing the blood supply,” said Jennifer Kapral, senior VP at Blood Centers of America and a co-author of the study. “Mixed reality helps modernize the donation experience and also potentially increases the frequency and number of younger donors. It can really make a difference to get more people interested in donating and making it more fun when they do.”

A long-term tenant of the Top 30 reports, Abbott is at the forefront of innovative technologies like these. In its fiscal year 2024 (ended Dec. 31) the company celebrated 5.4% growth to $28.32 billion in its combined Medical Devices and Diagnostics portfolios.

Medical Devices captured $18.99 billion of this sum, ascending 13.7% over the prior year. This was led by double-digit growth in Diabetes Care, Structural Heart, Electrophysiology, and Heart Failure.

ANALYST INSIGHTS: “Abbott is uniquely positioned for sustained growth driven by diabetes technology leadership, cardiovascular innovation, highly productive R&D, and expanding global reach—with strong fundamentals and investor confidence poised well into the next decade.”

—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors

Electrophysiology sales boasted a 12.3% increase last year, rising to $2.47 billion. The company cited higher procedure volumes and increased demand for catheters and cardiac mapping products as the catalysts for strong performance in this segment.

The first global procedures were conducted using Abbott’s Volt pulsed field ablation (PFA) system in January 2024. The atrial fibrillation (AFib) treatment pairs a balloon-in-basket catheter with the EnSite X EP system, a heart mapping system that lets physicians visualize and position tools in the heart. Abbott said Volt’s design helps make improved contact with the targeted heart tissue because of the catheter’s positioning, handling, and steering. Its balloon feature allows efficient energy transfer to tissue to improve how the catheter creates lesions to stop erratic heart signals.

October witnessed both early completion of enrollment in the company’s VOLT-AF IDE study supporting the Volt PFA system and launch of the FOCALFLEX trial to evaluate the company’s TactiFlex Duo ablation catheter, Sensor Enabled, for treatment of paroxysmal AFib. The company also announced FDA clearance of its Advisor HD Grid X mapping catheter, sensor enabled in August.

Abbott said increased interest in its PFA system propelled enrollment in the VOLT-AF IDE study to be completed four months ahead of the expected timeline, enrolling nearly 400 patients in three months. The FOCALFLEX PFA study will assess the dual-energy ablation solution that offers both PFA and RF energy delivery.

The Advisor HD Grid X mapping catheter, Sensor Enabled, provides an electrode configuration for high-density heart mapping. The design is meant to make physicians more aware of the heart’s electrical signals, regardless of catheter placement during an ablation procedure.

Heart Failure’s $1.16 billion of revenue last year was an impressive 12.1% rise over the previous year. Abbott pointed to growth in heart assist devices as the main provocation for strong performance in this segment.

In April, the FDA noted Abbott’s recall of the HeartMate II and 3 left ventricular assist system (LVAS) over extrinsic outflow graft obstruction (EOGO) as Class I. EOGO happens when biological material builds up between the HeartMate outflow graft and outflow graft bend relief, or additional components added during surgery. The buildup in the systems can obstruct the device, rendering it less effective in helping the heart to pump blood. The device can trigger alarms indicating low blood flow and impact its ability to help the heart pump blood properly. This accumulation usually occurs over two or more years.

The product wasn’t removed from the market despite being responsible for 14 deaths related to the EOGO issue. The company urged users to pay attention to low flow alarms, because they’re the first sign of a significant outflow obstruction. Further guidance was also provided about how to diagnose unresolved low flow associated with the outflow graft obstruction.

A month later, another recall involving HeartMate 3 was deemed Class I by the FDA, this time following complaints about blood leakage or air entering the seal interface between the left ventricular assist device (LVAD) inflow cannula and apical cuff. The issue was seen during the device’s implantation in all reported events.

This time, two deaths were associated with the leakage problem. Again, the product wasn’t removed from the market but Abbott advised that if leakage or air is suspected or seen, that residual air must be immediately evacuated from the device’s blood chamber before starting LVAD support. Bleeding should be assessed and hemostasis properly managed before closing all wounds.

To resolve air leaks or surgical bleeding, the company recommended adjusting pump position, waiting for blood’s natural tendency to coagulate. Upon reversal of anticoagulation, users were advised to add surgical materials and exchange the apical cuff, the pump, or both. A complete backup system (implant kit and external components) should be available onsite and nearby during HeartMate 3 implantation should an emergency arise.

In August, HeartMate 3 was once again in the news—for a label update unrelated to the recalls. The FDA-approved update eliminated aspirin as part of routine patient management, based on Abbott’s ARIES-HM3 trial challenging the assumption that patients with a heart pump must take daily aspirin. The HeartMate 3 patients who didn’t take aspirin spent 47% fewer days in the hospital due to a nearly 40% decrease in bleeding events, compared to patients who continued to take aspirin daily.

Rhythm Management posted a 6% increase in 2024, growing to $2.39 billion of sales thanks to the Aveir leadless pacemaker and Assert-IQ implantable cardiac monitor.

The Assert-IQ insertable cardiac monitor (ICM) obtained CE mark clearance in March—it had previously won FDA clearance in May 2023. Part of the company’s portfolio of connected health devices, Assert-IQ helps monitor heart rhythms remotely for up to six years, inserted under the skin of the chest to monitor the heart continuously and detect arrhythmias. The ICM connects to a transmitter (usually the wearer’s own cell phone) and checks heart rhythms every 20 seconds, transmitting important data to their clinic’s portal. Abbott also said it has the longest battery life for a Bluetooth-enabled ICM.

The Aveir dual chamber (DR) leadless pacemaker system, which has been FDA-approved since June 2023, added a CE mark in June. Aveir DR is comprised of two devices: one that paces the right ventricle (Aveir VR) and one that paces the right atrium (Aveir AR). Each is about one-tenth the size of a traditional pacemaker and smaller than a AAA battery, according to Abbott.

Using the company’s i2i (implant-to-implant) communication, Aveir DR delivers synchronized pacing between two leadless pacemakers on every heartbeat. The tech uses high-frequency pulses to relay messages through the blood’s naturally conductive characteristics between the paired, co-implanted devices. Abbott said conductive communication uses far less battery than inductive, radiofrequency, or Bluetooth communication.

In December, Abbott announced completion of the first in-human leadless left bundle branch area pacing (LBBAP) surgeries using its Aveir conduction system pacing (CSP) leadless pacemaker in a feasibility study. The LBBA is a crucial part of the heart’s electrical conduction system that the new pacemaker activates after being implanted deep in the wall separating the heart’s left and right chambers. The approach permits physiologic pacing, which mimics the heart’s natural electrical current to potentially improve physiological response compared to other pacing options.

Vascular revenue totaled $2.84 billion and rose 5.8% from the prior year. The company cited higher vessel closure sales as the main reason for strong performance here.

April saw FDA approval for the Esprit BTK (below-the-knee) everolimus eluting resorbable scaffold system. Esprit BTK treats people with chronic limb-threatening ischemia (CLTI) below the knee by keeping arteries open and delivering everolimus to support vessel healing, before completely dissolving.

It’s made of a material similar to dissolving sutures. The device is inserted during a catheter-based procedure via a small incision in the leg. Once the blockage is open, the scaffold helps heal the vessel and offers support for about three years until the vessel is strong enough to stay open on its own.

Structural Heart sales achieved double-digit growth—the segment pocketed $2.25 billion in 2024, growing 15.5%.

The company’s first-of-its-kind TriClip transcatheter edge-to-edge (TEER) system for tricuspid regurgitation (TR) or a leaky tricuspid valve received FDA approval in April. TriClip is delivered through a vein in the leg and works by clipping together a portion of the leaflets to repair the tricuspid valve and help blood flow in the right direction. It uses the same clip-based technology as its MitraClip device, but is specifically designed to treat the tricuspid valve’s complex anatomy.

Abbott said on average people who receive TriClip need only one day in the hospital before they can recover and return home. In the company’s TRILUMINATE pivotal study, 90% of subjects receiving TriClip reduced their TR grade from severe or higher to moderate or less at 30 days—a reduction that remained at one year with the device. 98% of patients were free of major adverse events through 30 days, with significant quality of life improvement.

The company’s investigational transcatheter aortic valve implantation (TAVI) balloon-expandable system for aortic stenosis was used in its first procedures in November. The TAVI device crimps a new heart valve on a deflated balloon, which is implanted through a groin artery and routed to the heart. Once positioned, the balloon is inflated to expand the new valve. Abbott said it developed the TAVI platform to build a foundation to incorporate AI-guided procedural capabilities.

Neuromodulation revenues totaled $962 million last year, rising 8.2% over the prior year.

January saw FDA approval of expanded MRI labeling for the Proclaim DRG (dorsal root ganglion) stimulation therapy for chronic pain. Patient can now receive full-body MRI scans while implanted with the device. Proclaim DRG is the only FDA-approved DRG technology, offering targeted relief for people with complex regional pain syndrome (CRPS) types I and II of the lower limbs by stimulating the DRG, clusters of nerve cells found along the spine.

FDA approval to launch the Liberta RC DBS (deep brain stimulation) system to treat movement disorders also arrived in January. It’s touted as the world’s smallest rechargeable DBS with remote programming. It also needs the fewest charges of any FDA-approved DBS, requiring only 10 recharge sessions a year for most patients. A wireless charging system lets people be active while wearing the device, which can be controlled on an Abbott-supplied patient controller or compatible iOS device. Liberta RC is about the height and width of a smartwatch face, about 31% smaller than other similar devices.

In September, Abbott began the TRANSCEND pivotal trial to evaluate its DBS system to manage treatment-resistant depression. The DBS had previously been granted breakthrough status from the FDA for this indication.

As part of the TRANSCEND study, doctors place leads in an area of the brain that impacts depression. These are connected to a stimulator placed under the skin in the chest. The stimulator sends electrical pulses to the leads with the goal of adjusting activity in the brain and reducing symptoms associated with depression.

Diabetes Care remains one of Abbott’s most profitable franchises—the business collected $6.81 billion of revenue in 2024, growing an impressive 18.1% over the prior year. The company highlighted continued growth in CGM systems in the U.S. and internationally as the main driver for Diabetes Care’s success. CGM sales were $6.4 billion in 2024, reflecting a 21.8% increase.

In January 2024, the company’s FreeStyle Libre 2 Plus continuous glucose monitoring (CGM) sensor became available for Tandem t:slim X2 automated insulin delivery (AID) users in the U.S. The pump connects wirelessly to the sensor and sends automatic glucose readings every minute to the pump. Users can see minute-to-minute glucose data on the pump and accompanying t:connect mobile app. The pump’s Control-IQ tech predicts glucose levels a half hour into the future, adjusting insulin delivery every five minutes based on CGM readings.

June saw FDA clearance for two over-the-counter CGM systems, Lingo and Libre Rio. Both use the company’s FreeStyle Libre CGM technology and each was designed for different needs of diabetes patients.

Lingo was engineered for adults looking to improve overall health and wellness. It tracks glucose and offers personalized insights and customized coaching, consisting of a biosensor worn on the upper arm for 14 days that continuously streams glucose data to a coaching application. The company said it’s not meant to diagnose diseases, including diabetes. It began commercial sale in the U.S. in September.

Libre Rio is the company’s first over-the-counter CGM for people with diabetes in the U.S. It’s designed for adults with type 2 diabetes who don’t use insulin and usually manage their diabetes through lifestyle modifications. It’s also the first over-the-counter CGM with a measurement range of 40-400 mg/dL, which allows measuring extremely low or high glucose events.

In July, the company began a voluntary medical device correction for a small number of FreeStyle Libre 3 sensors distributed in the U.S. during the first half of May 2024. Internal testing showed some of the sensors from among three lots may provide incorrect high glucose readings. Lot numbers T60001948, T60001966, and T60001969 were the only ones affected, and the FreeStyle Libre 3 reader and app were not impacted. Those wearing an affected FreeStyle Libre 3 sensor were advised to immediately discontinue use and dispose of any affected sensors.

Abbott began a global partnership with Medtronic in August to collaborate on an integrated CGM system based on FreeStyle Libre that will connect with Medtronic’s automated insulin delivery (AID) and smart insulin pen systems. Combining Abbott’s CGM sensor with Medtronic’s AID algorithms will allow automatic insulin adjustments to keep glucose in range. The CGM sensor is designed to work exclusively with Medtronic devices. It will be developed by Abbott and sold by Medtronic.

A partnership with Beta Bionics was also revealed in September. The duo will integrate Abbott’s FreeStyle Libre 3 Plus glucose sensing technology with the iLet Bionic Pancreas automated insulin delivery system. The iLet Bionic Pancreas was the first AID integration of FreeStyle Libre 3 Plus available in the U.S., and the integration launched in Q4 2024.

In October, the FreeStyle 2 and 3 CGMs were approved to be worn during X-rays, CT scans, and MRIs. The FDA cleared removal of the imaging contraindication, making the systems the first, only patient-applied CGM sensors approved for these screenings.

The month after marked the grand opening of a new manufacturing facility for FreeStyle Libre 3 sensors in Kilkenny, Ireland. The 30,000-square-foot manufacturing center is fully electric—it’s powered by six air-to-water heat pumps and boasts 600 solar panels on its roof with tanks to collect rainwater to use onsite. Abbott simultaneously declared a $100,000 grant to The Ireland Funds to support STEM education in the area.

November also saw the release of the FreeStyle Libre 2 Plus’ integration with the Omnipod 5 AID system and subsequent launch in the U.S., adding another option for diabetes patients to reap the benefits of a preferred CGM with an AID system.

Two days before Christmas, the company revealed it had reached an agreement with CGM maker Dexcom to settle patent disputes in cases related to CGM products. The agreement dismissed pending cases and included a provision that neither party would litigate patent, trade dress, and design rights disputes with each other for the next 10 years. The settlement’s terms did not include financial payments from either Abbott or Dexcom.

Diagnostic product sales dropped 3.9% to $9.34 billion last year because of lower demand for COVID-19 tests. The Rapid Diagnostics segment was hit hardest due to this—it plummeted 17.8% to about $3 billion. Excluding COVID-19 testing sales, the strong demand for respiratory disease tests for influenza, strep throat, and RSV powered 1.3% growth in these areas.

Core Laboratory revenues jumped 5.6% to $5.16 billion thanks to the Alinity platform and higher volume of routine diagnostic testing in hospitals and labs. Price increases also impacted growth, somewhat offset by lower sales in China. Molecular proceeds of $574 million and Point of Care sales of $565 million represented a 42.3% drop and 7.5% rise, respectively.

In April, the company earned FDA clearance for the i-STAT TBI (traumatic brain injury) cartridge with whole blood, which helps doctors evaluate suspected concussions at the bedside and get lab-quality results in 15 minutes. The test measures the ubiquitin C-terminal hydrolase L1 (UCH-L1) and glial fibrillary acidic protein (GFAP) biomarkers from the brain that may be released into the bloodstream, indicating a potential brain injury. Results from this test can help rule out the need for a CT scan of the head and determine the next best steps for care. Using a whole blood sample means testing can occur at healthcare settings without a lab, helping speed head trauma evaluation. It can be used to evaluate patients up to 24 hours after a head injury.

$26.87 Billion ($40.10B total)
Prior Fiscal: $31.27 Billion
Percentage Change: -14.05%
R&D Expenditure: $2.74B
Best FY23 Quarter: Q4 $6.97B
Latest Quarter: Q1 $6.66B
No. of Employees: 114,000 (total)

Twenty Twenty-three was no ordinary year.

It was a memorable 12 months, by far. Historic, in some respects.

Yet it was more than that. 2023 was the year, and not just because of Taylor Swift or Barbenheimer; not just because of ChatGPT or the Apple Vision Pro; not just because of atmospheric rivers or scorching heat; and not just because of Ozempic, RSV, or even COVID-19’s long-expected endemic shift.

Granted, all those matters helped shape 2023, but they didn’t really define the year.

At least not in the way goal fulfillment did.

Think about it: There would have been no “Barbenheimer” without director Greta Gerwig’s desire to explore women’s issues, and filmmaker Christopher Nolan’s longing to chronicle the birth of nuclear weapons. Similarly, the Apple Vision Pro was conceived to provide the business world with spatial computing, and Ozempic’s original target was type 2 diabetes.

All meaningful creations, all because of goal fulfillments.

“I’ve known for years we would get here,” Apple CEO Tim Cook told Vanity Fair shortly before the Vision Pro’s release this past February. “I didn’t know when, but I knew that we would arrive here.”

That blend of uncertainty and conviction transpired continually last year as athletes, educators, entertainers, scientists, and business leaders alike forged intently toward their respective goals. Automaker Tesla, for example, kept its promise to deliver 1.8 million electric vehicles to consumers despite a lackluster third quarter, and NVIDIA became a generative AI darling with record 2023 revenue and off-the-charts product (semiconductor chip) demand. Amazon Europe, meanwhile, converted to completely recyclable packaging, and CVS expanded its value-based care footprint by closing its $8 billion bid for Signify Health.

Likewise, Abbott Laboratories kept its word to emerging market consumers by expanding a six-year collaboration with mAbxience Holdings that will increase patient access to oncology, women’s health, and respiratory therapies. The healthtech behemoth also remained loyal to shareholders in 2023, disbursing its 400th consecutive quarterly dividend (a full century) and growing its overall dividends for the 52nd straight year (the latter of which gained Abbott entry into the exclusive Dividend Kings club).

The ultimate goal fulfillment.

“In our 135th anniversary year, Abbott demonstrated the resilience, the creativity, and the commitment needed to meet the challenges of the present and the vast potential of the future of healthcare,” Board Chairman/CEO Robert B. Ford wrote in a prelude to the company’s 2023 annual report. “2023 was the year we’ve been working toward.”

Was it really, though? Granted, Abbott’s base-business growth swelled 11.6% (as measured in organic sales) and three of its four business units increased revenue by respective margins. But its overall financial performance was comparatively inferior to past years: Total sales fell 8.5% to $40.1 billion, operating earnings plummeted 25.4% to $6.47 billion, net earnings sank 19.1% to $5.72 billion, and basic earnings per share descended 18.3% to $3.28. The company also initiated a voluntary product recall for the second consecutive year, pulling several FreeStyle Libre reader models from the U.S. market over potential fire and overheating risks. The recall affected more than 4.2 million Abbott FreeStyle Libre, FreeStyle Libre 14-day, and FreeStyle Libre 2 Flash Glucose Monitoring System readers.

…the year we’ve been working toward.

This kind of year? Seriously?

Okay, maybe not. Perhaps Ford was referring to the double-digit increase in Medical Devices revenue rather than the drastic drop in Diagnostics proceeds. Or, he might have been touting the solid growth in Nutritionals and Established Pharmaceuticals sales instead of the near two-thirds cut in Rapid Diagnostics revenue.

That seems more like a year to work toward.

“The key to Abbott’s successful 2023 was balance. Our balanced success…led to excellent financial results for the year, with both sales and earnings exceeding the expectations we shared at the beginning of the year,” Ford wrote in his brag sheet to shareholders. “…the breadth and depth of our product portfolio gives Abbott both defensive strength with the ability to balance challenges in one business with overperformance in another, and offensive strength with more ways to win.”

That balance was evident in Abbott’s 2023 balance sheet. The company somewhat counteracted massive diagnostics and molecular sales losses with considerable gains in medical device, nutritional, and pharmaceutical revenue, and bolstered its product pipeline to compensate for waning COVID-19 test demand. New Abbott family tree branches included several assays the firm hopes will thrive in a post-pandemic world: Alinity i TBI, a lab-based blood test for concussion detection (provides results in 18 minutes); Alinity h, an integrated hematology system for complete blood count testing (with a processing potential up to 119 CBC results per hour); and Alinity m high risk HPV, a human papillomavirus detection and routine cervical cancer screening tool that determines the genotype on 14 high-risk carcinogenic HPV strains.

Despite the effort, Abbott’s new testing complements could not even out the lopsided balance sheet in the company’s Diagnostic segment, which fell victim to COVID-19’s endemic shift and flagging need for virus detection. Consequently, COVID-19 test-related sales shrank more than five-fold last year, falling to $1.6 billion from $8.4 billion in 2022 (an 80% decrease), the annual report notes. Abbott collected nearly half of that SARS-CoV-2 test total—$730 million—in the first quarter, before the federal public health emergency expired on May 11.

Such a steep COVID-19 sales decline tipped the Diagnostics segment’s scales in the wrong direction: Total 2023 revenue subsided 49% (38.2% excluding the impact of foreign exchange) to $4.32 billion, flattened by monumental losses in the Molecular and Rapid Diagnostics units. Sales in the former were down 53.6% to $574 million while proceeds in the latter unit plunged 92.6% (62.9% excluding the impact of foreign exchange) to $3.69 billion, the annual report indicates.

Saving the Diagnostic segment from total (fiscal) annihilation last year were the Core Laboratory and Point of Care units, both of which posted solid increases compared with 2022. Core Laboratory sales benefited from year-over-year volume of routine diagnostic testing in hospitals and other laboratories, rising 5.4% to $5.15 billion. Point of Care returns, meanwhile, climbed 7.3% to $565 million.

The Diagnostics segment’s extreme financial fluctuations are unlikely to continue, however, without a global public health emergency to overinflate sales. Accordingly, Abbott helped secure the segment’s fiscal future with last December’s U.S. Food and Drug Administration (FDA) approval of a new laboratory automation system (Abbott GLP Systems Track) designed to meet high-volume needs, reduce turnaround time for test results, and ensure lab workers’ safety.

“…we knew the pandemic would not last forever, so we planned ahead,” Ford told investors during a Q4 2023 earnings call in January (2024). “We pulled forward our accelerated investments in several areas across the company when the demand for COVID testing was at peak levels, knowing that we would scale these investments back down when the eventual decline in demand for COVID testing occurred. And the experiences we gained in creating the COVID testing business and then managing the rapid scale-up and subsequent scale-down of that business will have a lasting positive impact on our company. Our R&D pipeline was one of the areas we targeted for the accelerated investments, and we’re seeing those investments pay off. In the last two years, we have announced more than 25 new growth opportunities, which include a mix of new products, new indications, and geographical and reimbursement expansions. And this level of pipeline activity is occurring across the entire company.”

That level of pipeline activity bore an abundance of fruit for the Medical Devices segment, where 2023 sales swelled 14.1% to $16.88 billion, operating earnings surged 19.6% to $5.3 billion, and 10 new products earned FDA approvals. Ford said the additions were “well-balanced” within each of the segment’s seven businesses, “accomplishing at least one significant pipeline-related achievement.”

In Diabetes Care, that one significant achievement likely was the FDA’s clearance last March of its FreeStyle Libre 2 and FreeStyle Libre 3 sensors for automated insulin delivery (AID) integration. Abbott modified the sensors so they’d integrate with AID systems—i.e., diabetes care management mechanisms that automatically adjust and administer insulin delivery from an insulin pump based on real-time glucose data from sensors. The clearance expanded the FreeStyle Libre 2 and FreeStyle Libre 3 sensors’ authorized use to children as young as two years old and pregnant women with diabetes, and boosted its wear time by one day (up to 15 days total).

The sensor clearances were the first of several regulatory victories secured by Abbott’s FreeStyle Libre platform last year. Nearly six weeks after earning the sensor endorsement, Abbott gained clearance for a standalone reader used with its FreeStyle Libre 3 integrated continuous glucose monitoring system. Featuring a sensor worn on the back of the upper arm, the small handheld reader is powered by a rechargeable lithium-ion battery similar to those used in mobile phones. The FreeStyle Libre 3 displays real-time glucose readings on a large screen, and enables users to check their blood sugar levels with existing smartphone apps. “The FreeStyle Libre 3 reader provides more choice to people living with diabetes to have access to lifesaving technology that is smaller and easier to use and comes without the high-cost burdens of other systems,” Diabetes Care Senior Vice President Jared Watkin said upon the product’s April 2023 clearance.

In addition to the FDA clearances, Abbott expanded reimbursement coverage for its FreeStyle Libre portfolio last year, gaining Medicare coverage for the overall Libre line in the spring, and French coverage for FreeStyle Libre 2 in early summer. The Libre 2 previously was only covered in France for type 1 and type 2 diabetics who required intensive insulin therapy; the policy change expanded the continuous glucose monitor to all diabetics who use basal insulin to manage their disease.

FROM THE TOP: “In our 135th anniversary year, Abbott demonstrated the resilience, the creativity, and the commitment needed to meet the challenges of the present and the vast potential of the future of healthcare.”

—Robert B. Ford, Board Chairman and CEO

Spoiling the FreeStyle Libre’s near-perfect regulatory report card last year was a Class I recall for certain Libre glucose monitoring systems readers. Abbott issued the recall in early April for 4.2 million readers used with the FreeStyle Libre, FreeStyle Libre 14 day, and FreeStyle Libre 2 Flash Glucose Monitoring Systems, warning the units posed a potential fire hazard.

Specifically, the handheld readers’ lithium-ion batteries could potentially catch on fire if improperly stored, charged, or used without Abbott’s USB cable and power adapter, the FDA cautioned it its recall notice. The safety notification impacted readers made between November 2017 and Feb. 13, 2023, but did not affect the FreeStyle Libre’s body-worn sensors.

Abbott initiated the recall based on a “limited number” of patient reports worldwide (0.0017%) about the readers’ lithium-ion batteries swelling, overheating, or in rare cases, sparking and catching fire. No deaths were linked with the battery’s potential fire hazard, the company said. Abbott did not physically pull the devices from the market, telling patients the readers are safe when used with the firm’s chargers and cables.

The recall had virtually no impact on Diabetes Care’s 2023 fiscal performance: The segment bested its Medical Devices unit brethren in earnings growth, boosting revenue 21.1% to $5.76 billion. Abbott attributed the steep rise to its popular FreeStyle Libre platform, which increased sales 24% last year. “In terms of sales dollars,” Ford noted, “Libre has become the most successful medical device in history, and it has outpaced market growth in 13 out of the last 16 quarters.”

Lacking such a blockbuster product, no other segment came close to matching Diabetes Care’s success last year. The runner-up (for sales growth) was Neuromodulation, which increased proceeds 15.6% to $890 million due partly to its pipeline-related achievement—the FDA’s approval of its Proclaim XR spinal cord stimulation system for diabetic peripheral neuropathy (DPN) treatment.

First sanctioned five years ago as a chronic pain therapeutic, the Proclaim XR system delivers traditional “tingling” tonic stimulation to relieve chronic DPN pain. Patients implanted with the system’s pulse signal generator—which is connected to one or two leads—control their therapy using an Apple device, though they also have access to Abbott’s NeuroSphere Virtual Clinic, a connected care app that fosters patient-physician communication and remote treatment adjustments through a cellular or WiFi connection.

The Neuromodulation segment further bolstered its product portfolio with dual FDA approvals last spring. Within a five-day span, Abbott received the agency’s blessing for expanded MRI options on its Eterna spinal cord stimulation (SCS) system, and its overall SCS line for non-surgical back pain treatment.

The Eterna SCS system has been used by patients for the past 18 months to relieve chronic pain. The latest FDA assent expands the product’s indication to include new magnetic resonance-conditional leads, enabling chronic pain sufferers to undergo MRIs within the approved specific conditions and giving them access to a wider selection of lead options for full-body scans. Billed as the smallest implantable, rechargeable spinal cord stimulator to treat chronic pain, the Eterna SCS system, along with TotalScan MRI technology, offers full-body MRI capabilities with normal operating mode scanning using select leads.

Clinicians now also have additional options for treating non-surgical back pain. The FDA validated Abbott’s SCS devices for such purposes based on study data indicating its BurstDR SCS technology improved pain and activity levels as well as emotional well-being in patients. Participants in the 270-patient trial experienced an average 69.7% reduction in pain, and 91.4% had significant pain relief or significantly improved function, Abbott reported.

“To date, we have struggled with how to treat people who weren’t considered a good surgical candidate because we didn’t have clear, data-driven treatment options for non-surgical back pain,” Timothy Deer, M.D., president/CEO of the Spine and Nerve Centers of the Virginias in Charleston, W.V., said upon the FDA’s approval. “This new indication for Abbott’s SCS devices, together with BurstDR stimulation, allows physicians the ability to identify and treat a new group of people, providing them with relief from chronic back pain.”

Following the Neuromodulation segment’s lead, Abbott’s Structural Heart unit expanded treatment options for patients battling aortic stenosis and heart valve disease. Its latest-generation transcatheter aortic valve implantation (TAVI) system, Navitor, gained FDA approval in January 2023 to treat people with severe aortic stenosis who are at high or extreme risk for open-heart surgery.

Navitor features a fabric cuff (NaviSeal) to reduce or eliminate blood backflow around the valve frame known as paravalvular leak (PVL). Additionally, the new device reportedly is the only self-expanding TAVI system containing leaflets within the native valve, a design that helps improve access to coronary arteries. Navitor is implanted using Abbott’s FlexNav delivery system, which features a slim design to accommodate different patient anatomies and small vessels for stable, predictable and accurate valve delivery and placement.

Two months after greenlighting Navitor, the FDA approved Abbott’s Epic Max stented tissue valve for aortic regurgitation/stenosis treatment. Epic Max is designed to achieve excellent hemodynamics (blood flow), and its low-profile frame facilitates potential future transcatheter interventions.

“With Epic Max, we’re accomplishing two important things: First and foremost, we’re improving heart valve hemodynamics, which is the purpose of the procedure,” noted Michael Dale, senior vice president of Abbott’s Structural Heart business. “Secondly, we’re preserving options and [the] ability for patient lifetime disease management…”

The company also is preserving both its present and future viability with the Epic Max and Navitor, though the Structural Heart segment needed little help last year turning a profit: The unit notched the third-best performance in the Medical Devices business, increasing sales 13.5% to $1.94 billion. It edged out the Electrophysiology division’s 13% growth rate ($2.19 billion in total sales), and Heart Failure’s 11.5% augmentation ($1.16 billion total proceeds).

Electrophysiology supplemented its product portfolio in February 2023 with U.S. and European regulatory approvals of its ablation technology. The company’s TactiFlex Ablation Catheter, Sensor Enabled, secured a CE mark to treat abnormal heart rhythms (cardiac arrhythmia) such as atrial fibrillation (Afib). TactiFlex is marketed as the world’s first ablation catheter designed with a flexible tip and contact force sensing ability to treat cardiac arrhythmias. It can be integrated with the EnSite X EP System—which helps physicians identify areas in the heart requiring ablation—to deliver high power while more easily adapting to the heart tissue.

Concurrent with the TactiFlex Catheter’s CE mark was the FDA approval of expanded indications for Abbott’s FlexAbility Ablation Catheter, Sensor Enabled. This product also has a flexible tip, though it’s used to help physicians identify abnormal signals associated with ventricular tachycardia in patients with non-ischemic cardiomyopathy.

Heart Failure’s pipeline-related achievement transpired last April with two new FDA clearances for its CentriMag acute circulatory support system. The agency cleared the CentriMag Blood Pump to provide longer-term support to critically ill patients requiring life-saving extracorporeal membrane oxygenation (ECMO). The decision authorizes the pump to be used longer than its previously approved six hours, giving physicians additional time and flexibility to make critical decisions for patients.

The FDA also cleared Abbott’s CentriMag Pre-connected Pack for urgent cardiopulmonary support lasting less than six hours. The Pre-connected Pack contains several CentriMag system components, including a blood pump and oxygenator to enable quick deployment of the life support system in emergency situations. Before this clearance, the system had to be assembled from separate components.

“With CentriMag, our mission has always been to transform the treatment of advanced cardiac and respiratory conditions to improve clinicians’ ability to most effectively manage their sickest patients,” said Robert L. Kormos, M.D., divisional vice president of Global Medical Affairs for Abbott’s Heart Failure business. “With the two new FDA clearances, physicians can deploy support in fewer steps and are provided more time to get their patients the necessary treatment during a critical window.”

Rhythm Management topped Heart Failure’s portfolio addendums and sales totals, posting a 6.2% revenue hike to end 2023 with $2.25 billion in proceeds. It enriched its lineup with a trio of product approvals over a seven week period last spring and summer, beginning with the FDA clearance of the Assert-IQ insertable cardiac monitor (ICM) in May (2023). The device offers doctors two battery life choices: a three-year option for traditional monitoring/diagnosis of fainting, heart palpitations, or abnormal heart rhythms; and a six-year option for long-term monitoring. The Assert-IQ ICM connects to a transmitter (usually a cell phone) through Bluetooth technology to track heart rhythms every 20 seconds and send results in real time to clinicians. Moreover, some Assert-IQ models can be remotely programmed to allow physicians to adjust the settings, optimize performance, and limit unnecessary alerts or transmissions, according to the company.

Twenty-four hours after receiving the Assert-IQ ICM clearance, Abbott won FDA approval of the TactiFlex Ablation Catheter, Sensor Enabled, for Afib treatment.

Then in early July 2023, Abbott nabbed FDA approval of the AVEIR dual chamber (DR) leadless pacemaker for treating abnormal or slow heart rhythms. Through the company’s proprietary i2i communication technology, AVEIR DR devices provide synchronized or coordinated cardiac pacing between two leadless pacemakers based on the patient’s clinical needs. The i2i technology uses high-frequency pulses to relay messages through the naturally conductive characteristics of the body’s blood between each leadless pacemaker. To support dual chamber therapy, each implant communicates beat-to-beat with a paired, co-implanted device. This conductive communication uses considerably less battery current than inductive, radio frequency or Bluetooth communication—the other alternatives typically used in implantable medical devices or traditional pacemakers.

Roughly one-tenth the size of a traditional pacemaker, the AVEIR DR leadless pacing system is comprised of two devices—the previously-approved AVEIR VR single chamber device, which paces the right ventricle, and the (2023) approved AVEIR AR single chamber device, which paces the right atrium.

“Modern medicine has been filled with technological achievements that fundamentally changed how doctors approach patient care, and now we can officially add dual chamber leadless pacing to that list of achievements,” Vivek Y. Reddy, M.D., director of cardiac arrhythmia services for Mount Sinai Hospital and the Mount Sinai Health System, commented upon the AVIER DR system’s regulatory triumph. “In delivering a true dual chamber leadless pacemaker system, Abbott is expanding access to the benefits of leadless pacing to far more people than ever before and provided additional options to improve our ability to treat people with slow or abnormal heart rhythms.”

Abbott also improved its ability to develop digital diabetes care solutions and peripheral/coronary artery disease treatment. The company accomplished the former by acquiring smart insulin management systems developer Bigfoot Biomedical in September. The firm’s Bigfoot Unity system features the first and only FDA-cleared connected insulin pen caps that use integrated continuous glucose monitoring (iCGM) data and healthcare provider instructions to provide insulin dosing recommendations.

Abbott’s additional expertise in peripheral and coronary artery disease treatment came courtesy of its $890 million deal for atherectomy device developer Cardiovascular Systems Inc. last winter. Industry analysts predicted the purchase would help expand Abbott’s vascular market footprint and help close product gaps in its vascular franchise. The transaction also gives Abbott access to key pipeline products in kidney stone removal, drug-coated balloons, and mechanical circulatory support for high-risk coronary procedures, analysts noted. Furthermore, the deal could boost sales in Abbott’s Vascular segment, which grew revenue 8% in fiscal 2023 to $2.68 billion.

“[In] Vascular, it’s been a combination of adding organically to the business and organic plays to reposition some of the portfolio to a higher-growth segment,” Ford said. “The pipeline is generating a lot of new opportunities for growth.”

$31.27 Billion ($43.65 Billion)
Prior Fiscal: $30.01 Billion
Percentage Change: +4.2%
R&D Expenditure: $2.88B
Best FY22 Quarter: Q1 $8.85B ($11.9B)
Latest Quarter: Q1 $6.58B ($9.7B)
No. of Employees: 115,000 (total)

Consistency and discipline births successful outcomes.

— Robin S. Baker

Warren Buffett is nothing if not consistent.

For decades, the renowned “Oracle of Omaha” has doled out the same investing advice to novice capitalists, using baseball analogies and obscure terms like “circle of competence” and “three-dimensional chess” to explain his strategy. He is a practitioner of patience—virtually unheard of in this age of instant gratification—and prefers printed text research to digitized financial files.

“In the securities business, you literally every day have thousands of the major American corporations offered to you at a price and at a price that changes daily,” Buffett expounded in a 1985 televised profile. “And you don’t have to make any decisions. Nothing is forced upon you. There are no called strikes in the business. They may be wonderful pitches to swing at, but if you don’t know enough, you don’t have to swing. And you can sit there and watch thousands of pitches and finally you get one right there where you want it…and then you swing.”

Baseball metaphors were a favorite of the late Jack Welch as well. GE’s longtime CEO consistently employed a corporate leadership strategy known as “differentiation” during his two-decade tenure with the company. Often dubbed “rank-and-yank”—a term Welch absolutely abhorred—differentiation is a process by which managers assess employees based on performance and separate them into three categories: top 20%, middle 70%, and bottom 10%. Members of the latter group, obviously, are terminated.

“The New York Yankees function perfectly well as a team (much to the dismay of Red Sox fans like myself, I might add) with a highly transparent system of differentiation in place. Stars are lavishly rewarded; underperformers are shown the clubhouse exit,” Welch wrote in his 2005 business /management book “Winning,” which he co-authored with his wife Suzy. “…I am convinced that along with being the most efficient and effective way to run your company, differentiation also happens to be the fairest and the kindest. Ultimately, it makes winners out of everyone.”

Regardless of the target. Case in point: Stack ranking has traditionally not been employed by Abbott Laboratories to manage workers but executives have used the “rank-and-yank” concept to weed out product line and business unit underperformers—a practice Welch referred to as “hardware differentiation” in his book.

Former Abbott Chairman/CEO Miles D. White, for example, significantly revamped the company during his 21-year reign: first purchasing BASF’s Knoll pharmaceutical segment in 2001, then spinning off the firm’s hospital products business in 2004 (Hospira, acquired by Pfizer in 2015), jettisoning the animal health division in 2015 (to Zoetis), and finally transferring its vision care business in 2017 (to Johnson & Johnson). White’s eventual successor, Robert B. Ford, championed the same strategy while heading up the Medical Devices business, orchestrating the $25 billion acquisition of St. Jude Medical Inc. (its cardiovascular solutions complemented Abbott’s own), and the eventual $5.3 billion takeover of Alere Inc.

ANALYST INSIGHTS: After benefitting from a huge windfall in the form of COVID diagnostic tests during the pandemic, Abbott is back to focusing on organic and inorganic growth in its core businesses. The recent acquisition of Cardiovascular Systems Inc. should add nicely to its portfolio. Recent FDA clearances for newer versions of the Freestyle Libre platform will continue the growth of its market-leading diabetes platform. Expect Abbott to be back to strong year-over-year growth by Q4 when the pandemic bubble sales comparisons are behind them.

—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors

Such business unit differentiation was noticeably absent last year, but Abbott compensated for that dearth with product diversification, winning more than a half-dozen regulatory approvals/clearances and debuting several new innovations that bolstered its offerings in cardiac care, diabetes, and chronic pain management.

“In 2022 alone, we delivered a host of innovative new product approvals and launches…And our pipeline for the future remains very rich,” Ford told shareholders in Abbott’s latest annual report. “We have the technologies and opportunities we need to fuel both therapeutic advancement and robust growth for years to come. The key to…success in an environment like today’s is our diversified business strategy, which gives us defensive strength by protecting us from market downturns in particular businesses, and offensive strength by providing us more ways to compete and win.”

Ford closed his letter the same way he’s ended all annual shareholder messages since assuming the corner office—with the words “Abbott Proud.”

An interesting sign-off, considering Abbott experienced a mix of both proud and humbling moments in fiscal 2022.

Abbott’s most ignominious moment surely was the voluntary infant formula recall and manufacturing plant shutdown that sparked a nationwide formula shortage last winter and an eventual U.S. Justice Department investigation. The February 2022 recall affected three powdered baby formula brands (Alimentum, EleCare, Similac) produced at Abbott Nutrition’s Sturgis, Mich., facility; four infants were sickened by the tainted formula and two died.

A less opprobrious but still not boastful moment occurred in October with a second voluntary infant formula recall, but this revocation was far less extensive than the earlier action, involving “less than a day’s worth” of total formula used in the United States. Abbott instituted the second recall over bottlecap sealing issues, though no injuries or deaths were reported.

As dreadful as those recalls were, though, they nevertheless sparked some proud moments, too. Abbott increased formula production at two U.S. plants and shipped product from its facilities in Ireland and Spain to bulk up the U.S. formula supply in August, and extended rebates on competitive products through part of the fourth quarter. The company also plans to build a new $500 million nutrition facility in the United States for specialty and metabolic formulas.

Abbott Proud.

Infant formula recalls aside, Abbott pride manifested itself in numerous ways last year, mainly through a solid financial performance. Strong demand for COVID-19 diagnostic tests and growth in the Established Pharmaceutical Products and Medical Devices segments nudged total net sales 1.3% to $43.65 billion and earnings before taxes 1.2% to $8.3 billion. Barring the impacts of coronavirus test-related proceeds and foreign exchange, total net sales increased 5.1%.

Abbott’s higher revenue in FY22 stemmed from improved showings in three of its four business segments. Thanks to its recall troubles, Nutritionals was the only segment to lose money last year—sales slipped 10% to $7.45 billion. The company recouped that loss, however, with sound growth in its three other three segments, one of which benefitted considerably from the continuing need for coronavirus testing.

That segment was Diagnostics, which increased revenue 6% last year to $16.58 billion. COVID-19 testing-related transactions beget more than half that total ($8.4 billion), led by sales of Abbott’s BinaxNOW, Panbio, and ID NOW rapid testing platforms. SARS-CoV-2 testing sales have risen steadily over the past three years despite fluctuating caseloads, but that surge could dissipate as COVID-19 morphs into an endemic disease and federal testing funding dries up. “The availability of fast, accurate, and accessible testing was a major factor in the world’s response to the pandemic. The success of our actions built major new businesses for Abbott at unprecedented speed and, importantly for the long term, demonstrated the power and potential of rapid diagnostics,” Ford noted in Abbott’s 2022 annual report. “We showed the world the many benefits of testing—and of health technology broadly—that is decentralized, digitized, and democratized. So, while Covid testing will become a smaller part of our business as we move from a pandemic to an endemic level, Abbott has built a leading position for the promising future of rapid testing.”

That position is already paying off. 2022 Rapid Diagnostics sales spiked 18.9% to $10.1 billion, bolstered by high demand for COVID-19 rapid tests. Demand was considerably less robust last year for SARS-CoV-2 molecular assays—sales of those tests fell by more than half from 2021 ($891 million to $411 million) and 59% from 2020. Overall, Molecular business unit revenue plummeted 30.3% in fiscal 2022 to $995 million but sales actually rose 9% and 13.8% apart from coronavirus testing-related proceeds and foreign exchange rates, respectively.

The Point of Care and Core Laboratory units posted losses too, though not as severe: proceeds in the former slid 2.1% to $525 million while sales in the latter fell 4.7% to $4.8 billion due to lower turnover of lab-based coronavirus antibody detection tests and intermittent market disruptions in China. Specifically, COVID-19 testing revenue from Abbott’s ARCHITECT and Alinity i platforms were down a staggering 69.6% from 2021 and 76.3% from 2020. Yet, like the Molecular unit, Core Laboratory revenue rose barring the impact of foreign exchange and coronavirus testing-related sales, thanks to higher volumes of routine diagnostic assays from the continued rollout of Abbott’s Alinity platform and an expanded test menu.

The first new menu item was the Alinity m STI Assay, a test for simultaneously detecting and differentiating four common sexually transmitted infections (STIs). Cleared by the U.S. Food and Drug Administration (FDA) in early May 2022, the Alinity m STI test for Chlamydia trachomatis, Neisseria gonorrhoeae, Trichomonas vaginalis, and Mycoplasma genitalium requires one swab or urine sample collected in a healthcare setting by a clinician or patient. The test runs on Abbott’s Alinity m system, the company’s most advanced high-volume laboratory molecular instrument. Alinity m uses polymerase chain reaction (PCR) technology, with high sensitivity in detecting infectious diseases.

Five months after debuting the STI Assay, Abbott won FDA emergency use authorization (EUA) for a commercial Mpox virus test kit. The first to become commercially available through an EUA, the Alinity m MPXV assay is for use by CLIA-certified laboratories for detecting Mpox virus DNA from lesion swab samples. The assay can be used on Abbott’s Alinity m instrument or other authorized equipment that performs sample preparation, PCR assembly, amplification, detection, and result calculation and reporting.

“Over the next few years, Abbott will continue rolling out our Alinity family of harmonized systems, which are being designed to run more tests in less space, generate test results faster, and minimize human errors, while continuing to provide high-quality results,” Abbott’s annual report stated. “…our pipeline for the future remains very rich. We have the technologies and opportunities we need to fuel both therapeutic advancement and robust growth for years to come.”

Such technologies and opportunities transcend Diagnostics, though. Abbott’s Medical Devices segment enriched its product pipeline last year to ensure future growth and improve cardiac care, electrophysiology, and glucose control therapeutics. Total Medical Devices sales expanded 2.2% (8.1% excluding foreign exchange rates) to $14.7 billion on strong performances in the Diabetes Care, Structural Heart, Electrophysiology, and Heart Failure segments.

Diabetes Care revenue ballooned 9.9% last year to $4.75 billion, driven by continued growth at home (United States) and abroad of Abbott’s continuous glucose monitoring (CGM) system, the FreeStyle Libre, which comprised 90.5% ($4.3 billion) of the unit’s FY22 total proceeds. The company further enhanced its FreeStyle Libre offering in May with the FDA clearance of the next-generation FreeStyle Libre 3 system, made for diabetics aged 4 and older. With a 7.9% overall mean absolute relative difference, Abbott claims its FreeStyle Libre 3 system is the most accurate CGM, with readings sent directly to a smartphone every minute. The device is the size of two stacked U.S. pennies and is made to be worn on the back of the arm; it features a Bluetooth integration range of up to 33 feet—50% further than other CGMs—and was cleared for use with the FreeStyle Libre 3 iOS and Android mobile apps.

Further Diabetes Care diversification is likely to come from Abbott’s partnership with CamDiab and Ypsomed. The trio is developing an integrated automated insulin delivery (AID) system to help reduce the burden of round-the-clock diabetes management. The alliance’s initial focus will be in European countries.

The new integrated AID system will connect Abbott’s FreeStyle Libre 3 sensor to CamDiab’s CamAPS FX mobile app, which then will link with Ypsomed’s mylife YpsoPump—creating a smart, automated insulin delivery process based on real-time glucose data. The connected, wearable solution will constantly monitor glucose levels and automatically adjust and deliver proper insulin amounts at the appropriate time, thus removing insulin dosing guesswork.

“Our goal is to make diabetes care as easy as possible, which is why Abbott continues to expand its team of insulin delivery partners, digital coaching, and technology leaders,” Jared Watkin, senior vice president of Abbott’s Diabetes Care unit, said when the partnership was announced last spring. “We want to deliver new advanced solutions that simplify and make it possible for people to spend less time thinking about diabetes and more about living.”

Abbott also wants fewer pensive moments dedicated to cardiovascular disease and chronic pain management. Accordingly, the company augmented its portfolio in both areas last year through nearly a dozen product approvals and market introductions, beginning with the FDA’s clearance in January of the EnSite X EP System with EnSite Omnipolar Technology, a new cardiac mapping system designed to improve cardiac arrhythmia treatment. The system creates highly detailed three-dimensional heart maps to help doctors identify and treat areas of the heart where abnormal rhythms originate. The system includes Abbott’s proprietary EnSite OT, which leverages the Advisor HD Grid Catheter to provide true electrograms regardless of a catheter’s orientation within the heart. With the ability to sample EGMs in 360 degrees, the EnSite X EP System with EnSite OT can map 1 million points in the heart and provide more precise treatment area locations.

The EnSite X EP, along with higher procedure volumes, helped boost Abbott’s FY22 Electrophysiology unit sales 1.04% (7.3%, excluding the impact of foreign exchange) to $1.92 billion.

Heart Failure unit revenue climbed 3.5% to $920 million. Abbott ensured future growth in this treatment area by securing an expanded FDA indication last winter for the CardioMEMS HF System, whose early warning sensor technology enables doctors to guard against worsening heart failure. The new indication adds an estimated 1.2 million potential U.S. patients to the CardioMEMS treatment pool by authorizing the device’s use by Class II heart failure victims and those with elevated natriuretic peptide levels in their blood. The CardioMEMS HF System was initially approved in 2014 for Class III heart failure patients with a prior heart failure hospitalization within the last year.

“Heart failure is a race against time where too often we’re behind because patients are not getting care early enough,” Philip B. Adamson, M.D., chief medical officer of the Heart Failure unit, noted in announcing the CardioMEMS expanded indication. “This expanded indication means physicians can treat more people with earlier-stage heart failure, providing the opportunity to prevent further suffering and possibly avoid later-stage progression that can have a profound impact on a person’s quality of life.”

Leaky heart valves and abnormal heart rhythms can impact quality of life as well, thus prompting Abbott to release two Amplatzer devices to the U.S. and European market in 2022. The company’s Amplatzer Steerable Delivery Sheath became available in the United States last spring, while the Amplatzer Talisman PFO Occlusion System launched in Europe in September.

The Amplatzer Steerable Delivery Sheath is used with Abbott’s Amplatzer Amulet Left Atrial Appendage Occluder to treat atrial fibrillation, a condition that increases the risk of ischemic stroke. The Talisman PFO Occlusion System treats patients with patent foramen ovale—i.e., a hole in the heart—who have experienced a stroke and are prone to suffering another.

Surprisingly though, neither new Amplatzer release moved the needle forward (financially, at least) in the Structural Heart unit in fiscal 2022. Rather, the Amplatzer Amulet Left Atrial Appendage Occluder—approved by the FDA in 2021—and the MitraClip (authorized in 2013) topped sales, inducing a 6.34% revenue increase (13%, excluding the impact of foreign exchange) to $1.71 billion.

Growth in Electrophysiology, Heart Failure, Structural Heart, and Diabetes helped offset losses in the Medical Devices segment’s three other business units, which succumbed to new coronavirus surges, intermittent pandemic-related lockdowns in China, and healthcare staffing challenges throughout 2022. Vascular proceeds declined 6.4% to $2.48 billion due to lower average selling prices for traditional drug-eluting stents and other coronary products as well as a slower recovery of percutaneous coronary intervention procedures.

Rhythm Management sales slid 3.6% to $2.11 billion despite the April 2022 FDA approval of the Aveir single-chamber leadless pacemaker for treating slow heart rhythms in U. S. patients. Implanted directly inside the heart’s right ventricle, the Aveir pacemaker features a mapping capability that allows physicians to measure the heart’s electrical signals and determine the device’s correct placement before final implantation. Its battery lasts up to two times longer than other commercially available leadless pacemakers, and the device itself can be retrieved if necessary.

Neuromodulation experienced the same fate as Rhythm Management: Revenue fell 1.4% to $770 million in spite of several new innovations, the first of which was new expanded MRI compatibility for the Proclaim XR Spinal Cord Stimulation (SCS) System with Octrode leads. Approved by the FDA in January, the expanded compatibility essentially lifted magnetic resonance imaging restrictions for lead tip location and the amount of radiofrequency power permissible under an MRI scan’s normal operating mode.

Six months after gaining the expanded compatibility for Proclaim XR, Abbott won FDA Breakthrough Device Designation to investigate using its deep brain stimulation (DBS) system for treatment-resistant depression (TRD), a form of major depressive disorder. The company’s DBS system is a personalized, adjustable therapy that entails implanting thin wires (or leads) into targeted areas of the brain. A pulse generator implanted under the skin in the chest is connected to the leads and produces electrical impulses that can modulate abnormal brain activity. Abbott has traditionally used its DBS system to help control symptoms of movement disorders (Parkinson’s disease, essential tremor) but evidence suggests that implanting electrodes in the part of the brain that regulates mood could help reduce TRD symptoms.

In late August—six weeks after nabbing the Breakthrough Device Designation—Abbott received FDA approval for its new Proclaim Plus SCS system featuring FlexBurst360 therapy. Hailed as the next generation of Abbott’s proprietary BurstDR stimulation, which delivers pulses (or bursts) of mild electrical energy to alter pain signals on their journey from the spinal cord to the brain, FlexBurst350 therapy provides pain relief in up to six areas of the trunk and/or limbs and features adjustable programming for evolving therapeutic needs.

The Proclaim Plus SCS system needs no recharging, as its battery can last up to a decade. It can be used with Abbott’s NeuroSphere Virtual Clinic connected care technology, which allows patients to communicate with a physician through a secure in-app video chat and remotely receive stimulation settings in real time regardless of location.

Abbott secured its final neuromodulation-related FDA approval shortly before Christmas last year, gaining the agency’s blessing for its Eterna SCS system—the smallest implantable, rechargeable spinal cord stimulator currently available for treating chronic pain. Developed from studies with patients, physicians, and caregivers, the company designed Eterna to need recharging less than five times per year under normal use. The product uses BurstDR stimulation, which mimics natural firing patterns in the brain to relieve pain. Eterna also features Abbott’s TotalScan technology, which allows for full-body MRI scans.

“Abbott’s low-dose BurstDR stimulation is clinically proven to reduce pain, improve people’s ability to perform everyday activities, and reduce emotional suffering associated with pain,” Timothy Deer, M.D., president/CEO of the Spine and Nerve centers of the Virginias (Charleston, W.V.), stated upon the Eterna’s FDA approval. “Until now, it wasn’t available on a rechargeable device that was this small, and that only needs to be charged a few times a year. This makes a big difference in comfort for many patients who now can have access to the best of both worlds—a small, best-in-class rechargeable device with superior stimulation therapy.”

$30.01 Billion ($43.1B total)
Prior Fiscal: $22.59 Billion
Percentage Change: +32.8%
R&D Expenditure: $2.7B
Best FY21 Quarter: Q4 $8.22B
Latest Quarter: Q1 $8.85B
No. of Employees: 113,000 (total)

Abbott Labs has reached the Top 30’s runner-up spot for the first time, and it’s predominantly thanks to the company’s innovation in response to the dire need for quick and accurate diagnostic testing for COVID-19.

Abbott began the year by fulfilling the U.S. federal government’s order of 150 million BinaxNOW COVID-19 Ag tests. The 15-minute, credit card-sized tests were distributed through the U.S. Department of Health and Human Services (HHS) to states, territories, and targeted entities, such as nursing homes, assisted living facilities, home health and hospice agencies, historically black colleges and universities (HBCUs), and the Indian Health Service. Two months later, the at-home version of the test earned emergency use authorization for asymptomatic, non-prescription, over-the-counter self-use. Abbott began shipping the self-tests to retailers a month later.

“Let’s not back down on testing, let’s double down on it,” Thomas Quinn, M.D., professor of medicine and pathology at the Johns Hopkins School of Medicine, told the press. “As long as COVID remains unpredictable, there’s an important role for the corner pharmacy and the central lab to tackle this virus in tandem, which gives this country the best chance to detect and screen for COVID-19.”

The Panbio COVID-19 Ag Rapid Test Device earned CE mark approval for asymptomatic screening and self-administered sample collection with a nasal swab last January as well. The test also delivers results as early as 15 minutes with no instrumentation. The self-test version of the Panbio COVID-19 test earned a CE mark last June, allowing it to be sold directly to consumers with or without symptoms.

ANALYST INSIGHTS: Abbott was on fire in Q1 2022 with growth across their various business units, but then crashed and burned in Q2 due to their now infamous challenges to produce infant formula. While they may be still making money, they have a lot of work to do to enhance their image with the American public and the FDA. I’m guessing Abbott is up to the challenge and the company will be once again rising to the occasion in 2023. Rearview mirror can’t come fast enough for CEO Robert Ford.

—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors

Last March saw FDA emergency use authorization for the company’s Alinity m Resp-4-Plex molecular assay to detect and differentiate SARS-CoV-2, influenza A, influenza B, and respiratory syntactical virus (RSV) in one test. The test can be conducted via either one swab specimen (anterior nasal or nasopharyngeal) collected by a clinician or an anterior nasal swab specimen self-collected at a healthcare location. The test is also CE marked.

Last March, Abbott also announced formation of the Abbott Pandemic Defense Coalition, a first-of-its-kind worldwide scientific and public health partnership dedicated to early detection of and rapid response to future pandemic threats. The initiative connects global centers of excellence in laboratory testing, genetic sequencing, and public health research to identify new pathogens, analyze possible risk level, rapidly develop and deploy new diagnostic testing, and assess public health in real time.

“We cannot fight what we cannot see coming. This program establishes a global network of ‘eyes on the ground’ that are always looking for threats, which helps the global health community to stay one step ahead of the next viral threat, and allows us to utilize Abbott’s expertise and technology to quickly develop tests to address them,” Gavin Cloherty, Ph.D., head of infectious disease research at Abbott, told the press. “The COVID-19 pandemic has demonstrated a clear need for advanced surveillance and viral sequencing—and the critically important role of testing. Understanding what pathogenic threats are emerging will help us test, diagnose, and hopefully help prevent the next pandemic.”

All in all, Abbott’s COVID-19 test-related sales totaled about $7.7 billion in 2021. As a result, Rapid Diagnostics sales nearly doubled last year, growing an impressive 95% to $8.55 billion. Strong demand for Abbott’s point-of-care COVID-19 molecular tests on the ID NOW platform and BinaxNOW COVID-19 Ag Card test in the U.S. and international demand for COVID-19 rapid tests on the Panbio platform drove the drastic increase. The revenue increase also included the recovery of routine diagnostic testing. Rapid Diagnostics COVID-19 testing-related sales accounted for $6.6 billion of the business’s proceeds.

Outside of COVID-19, last January saw 510(k) clearance for the i-STAT Alinity TBI plasma test, the first rapid handheld traumatic brain injury (TBI) blood test, according to Abbott. The test measures specific proteins in the blood after a TBI and generates results in 15 minutes. All the test requires is a small blood sample taken from the arm, from which plasma is extracted with a centrifuge and applied to the test’s cartridge. A negative result can be used to rule out need for a head CT scan, while a positive result complements CT scans to evaluate whether the patient has a TBI.

Core Laboratory Diagnostics sales grew 12.4% to $5.13 billion in 2021, driven by increased volume of routine diagnostic testing in hospitals and labs. This was partially offset by lower sales for lab-based IgG and IgM tests for COVID-19 antibodies.

Molecular Diagnostics sales fell 2.9% from 2020 with posted sales of $1.43 billion. It was the only Abbott medical device or diagnostic business to decline, due to lower demand for lab-based molecular COVID-19 tests on the m2000 platform. This was partially offset by growth in the base business from continued rollout of the Alinity m platform. Molecular Diagnostics COVID-19 testing-related sales last year were $891 million. Point-of-Care diagnostics sales rose 4% to reach $536 million last year.

Although, according to Reuters, Abbott cut its full-year 2021 profit forecast as it expected a sharp revenue decline from its COVID-19 tests as more Americans got vaccinated. Only time will tell whether the company can continue to innovate in critical diagnostic testing areas as the current pandemic continues and future pathogens emerge.

“I think it is important to keep it in perspective here that our revised EPS guidance is up 20% versus last year and more than 30% compared to our pre-pandemic EPS in 2019,” CEO Robert Ford told Forbes last year. “I mentioned that because I think there’s just a couple of companies in our peer group here that have been able to achieve that sort of growth since the start of the pandemic.”

Medical Devices revenue kept pace and increased 19.4% last year, driven by double-digit growth across all divisions and led by Diabetes Care, Structural Heart, and Electrophysiology, which achieved sales growth from pre-pandemic levels. Though cardiovascular and neuromodulation procedure volumes were stifled early in 2021 by elevated COVID-19 case rates in some countries—including the U.S.—overall volumes improved over the course of the year. The Rhythm Management division’s sales expanded 15% in 2021, coming to rest at $2.2 billion.

The Jot Dx insertable cardiac monitor (ICM) launched in the U.S. last July. It continuously monitors cardiac rhythms and connects to the myMerlin mobile app that transmits data in real-time. Physicians can toggle between viewing only three key cardiac episodes or all episodes depending on the patient’s needs. The newly included SyncUP support service also enrolls a newly implanted device in the system, orients the patient to familiarize them with the device, and confirms a connection to the app.

Abbott released late-breaking data from the Leadless II IDE study evaluating the investigational Aveir leadless pacemaker in November. At six weeks post-implant, 96% of patients met the safety endpoint of no serious adverse device effects and 95.9% achieved the efficacy endpoint of acceptable therapy delivered. Physicians were able to accurately position Aveir either the first time or with a single repositioning in 96% of cases. Leadless pacemakers are implanted directly into the heart’s right ventricle via a minimally invasive procedure.

The Electrophysiology business gathered $1.91 billion in 2021, growing 21% from the previous year. Heart Failure proceeds rose 20% to reach $889 million last year. Vascular business revenue totaled $2.65 last year, rising 14% due to a handful of product releases and a new acquisition.

Last April, the Xience stent earned CE mark approval for shorter duration (28 days) of dual anti-platelet therapy (DAPT) post-implant for patients with high bleeding risk. FDA approval for this indication followed suit two months later, as did FDA approval and CE mark clearance for the next-gen Xience Skypoint stent. According to Abbott, Skypoint is easier to place and allows treatment of larger blood vessels via improved stent expansion.

April also saw a CE mark for the company’s new coronary imaging platform powered by Ultreon 1.0 software, which merges optical coherence tomography (OCT) with AI to enhance visualization. It can automatically spot severity of calcium-based blood vessel blockages and measure vessel diameter to boost precision during coronary stenting. The software integrates with the firm’s Dragonfly OpStar imaging catheter to extend OCT’s reach by allowing capture of information from complex patient anatomies. The platform also earned FDA clearance last August.

Abbott also acquired Walk Vascular, and its minimally invasive mechanical aspiration thrombectomy systems to remove peripheral blood clots, last August. The JETi and next-gen JETi AIO (all in one) systems break up and remove clots from peripheral vasculature and reduce risk of dislodged clots. Both systems have 510(k) clearance and CE mark approval. The deal’s financial terms were not disclosed.

Structural Heart revenues flourished last year due to several landmark product introductions, as well as U.S. Centers for Medicare & Medicaid Services (CMS) expanded reimbursement coverage eligibility for MitraClip in January 2021. Last year the business posted $1.61 billion in sales, ballooning 29% over the year prior.

The next-gen TriClip transcatheter tricuspid valve repair system obtained CE mark approval last April. The TriClip G4 clip-based therapy treats the tricuspid—the “forgotten valve” that has had historically limited treatment options. The device treats leaky tricuspid valves and allows clinicians to tailor valve repair to each patient’s unique anatomy. TriClip is delivered to the heart by a catheter inserted through the femoral vein and clips together a portion of the tricuspid valve’s leaflets to reduce the backflow of blood. With a differentiated delivery system designed for the tricuspid valve and steerable guiding catheter system, physicians can independently grasp and effectively clip valve leaflets to reduce regurgitation. TriClip G4 includes two new clip sizes, offering a total of four sizes to tailor the device to different anatomies.

The Navitor transcatheter aortic valve implantation (TAVI) system gained EU approval last May for high or extreme surgical risk, severe aortic stenosis patients. Navitor features a fabric cuff (NaviSeal) that works with the cardiac cycle to remove paravalvular leak. The self-expanding TAVI system has intra-annular leaflets and large frame cells to improve access to critical coronary arteries. The new design also improves hemodynamics.

A month later, the Amplatzer steerable delivery sheath obtained CE mark and Health Canada approval. Used with the Amplatzer Amulet LAA occluder, the delivery sheath was developed specifically for minimally invasive LAA occlusion procedures for atrial fibrillation patients at risk of ischemic stroke. The sheath has bi-directional steering and an auto-lock setting for more accurate alignment with the LAA. A hemostasis valve helps stabilize blood flow and minimize blood loss during the operation, and the new design removes the need for catheter manipulation or exchanges.

The Amplatzer Amulet LAA occluder gained FDA approval last August. The device’s dual-seal technology helps immediately close the LAA to reduce stroke risk in atrial fibrillation patients and eliminates the need for blood-thinning medication. Amulet can treat a wide range of anatomies with the widest range of occluder sizes on the market. It’s also recapturable and repositionable for optimal placement.

September saw FDA approval for the Portico with FlexNav transcatheter aortic valve replacement (TAVR) system for symptomatic, severe aortic stenosis patients at high or extreme risk for open-heart surgery. Portico is self-expanding with intra-annular leaflets to help provide optimal blood flow. The replacement valve’s structure preserves access to critical coronary arteries for future interventions. Portico is implanted using the FlexNav delivery system, whose slim design accommodates different anatomies and small vessels.

That same month the FDA approved the firm’s Amplatzer Talisman PFO (patent foramen ovale) occlusion system to treat those at risk of recurrent ischemic stroke thanks to PFO. The next-gen system adds an additional 30 mm device size and comes pre-attached to the delivery cable. The Talisman delivery sheath was also approved.

Completing the trifecta in September was FDA approval for the company’s Epic Plus and Epic Plus Supra stented tissue valves for aortic or mitral valve disease. Enhancements included more radiopaque markers that make it easier for navigation if future transcatheter procedures are needed. The Epic Plus Mitral holder helps to ensure precise insertion of the valve via lower profile, so physicians have a better view of the device for accurate placement during implantation.

Although Neuromodulation business procedure volumes took a hit early in 2021 due to elevated COVID-19 cases, the division posted $781 million in proceeds to rise 11% over 2020.

Last March, the business launched the NeuroSphere virtual clinic in the U.S. The technology enables patients using Abbott’s suite of neuromodulation technologies to communicate with their physicians and remotely receive stimulation settings in real time, regardless of their location. Clinicans can prescribe new treatment settings remotely to the neurostimulation device using a programmer app and secure remote care connection.

The Diabetes Care business accrued $4.33 billion last year, rising an impressive 24.5% in sales over the previous year.

The business achieved FDA clearance for the FreeStyle Libre 2 iOS application for compatible iPhones last August. The app pairs with the FreeStyle Libre 2 continuous glucose monitor (CGM). The app lets users get glucose readings directly on their iPhones without a reader, and caregivers can remotely monitor glucose readings and get real-time alarms. Users also receive a trend arrow to help determine how food, exercise, and other lifestyle factors impact their diabetes management.

However, also in August, Abbott settled to pay $160 million to resolve claims that two of its units submitted false claims to Medicare by providing kickbacks to diabetes patients, including “free” or “no cost” glucose monitors, according to the U.S. Department of Justice. The claim was made against Arriva Medical, a Medicare mail-order diabetes testing supplier, and its parent company Alere, that Abbott acquired in 2017. Arriva was also accused of systematically charging Medicare, a U.S. government health plan, for glucometers given to ineligible patients, and submitting claims for 211 patients who had been dead at least two weeks.

Longtime CEO Miles D. White officially left Abbott in December when he stepped down as the company’s executive chairman after a remarkable 38-year tenure. Current CEO Robert Ford took his place on Dec. 10.

“It’s been my privilege to serve Abbott and its many stakeholders, reshaping the company to keep it relevant and strong while medicine, technology and society have evolved,” White told the press. “Abbott will be in good hands with Robert’s leadership, and I want to thank the board and my colleagues—current and past—for their support during my tenure.”

$22.59 Billion ($34.61 Billion)
Prior Fiscal: $19.95 Billion
Percentage Change: +13.2%
No. of Employees: 109,000 (total)

How does a business post double-digit growth during a pandemic?

Easy—be its premier diagnostic test supplier.

Abbott Labs began to supply mission-critical COVID-19 diagnostic tests as early as last March. The company was awarded emergency use authorization (EUA) for its first COVID-19 molecular PCR (polymerase chain reaction) test then, and immediately shipped 150,000 m 2000 RealTime systems to run the tests to existing customers. The company vowed to provide up to 1 million tests a week to support infection control efforts. An EUA in May to run the test on the Alinity m molecular laboratory instrument bolstered these efforts.

An EUA for the ID NOW molecular point-of-care COVID-19 test came about a week later. The test is able to deliver positive results in as little as five minutes, and negative results in 13. ID NOW’s small, lightweight, and portable design allowed a wide range of healthcare settings to offer rapid COVID-19 test results.

The ID NOW test came under scrutiny beginning in May, however. The FDA said in a statement that the test may return false negative results, citing preliminary data. The agency said at the time it had received 15 reports about the tests, and began reviewing the reports.

Responding to the reports, Abbott stated, “We’re seeing studies being conducted to understand the role of ID NOW in ways that it was not designed to be used. In particular, the NYU study results are not consistent with other studies. While we’ve seen a few studies with sensitivity performance percentages in the 80s, we’ve also seen other studies with sensitivity at or above 90 percent, and one as high as 94 percent.”

Abbott released its own interim clinical study data about a week later, demonstrating ID NOW COVID-19 test performance was ≥94.7 percent in positive agreement (sensitivity) and ≥98.6 percent negative agreement (specificity) compared to two different lab-based PCR reference methods. The data also suggested ID NOW performed best in patients tested earlier post-symptom onset. Another set of interim clinical study results the firm published in October showed performance of 95 percent sensitivity and 97.9 percent specificity within seven days of symptom onset. According to Abbott, ID NOW became the most studied COVID-19 test available; the interim post-authorization study evaluated 1,003 people.

The third COVID-19 test—the SARS-CoV-2 IgG lab-based serology blood test to detect antibodies—arrived in mid-April. The test identifies if a person was previously infected, identifying the IgG protein that is produced in the late stages of infection and can remain for up to months and possibly years after recovery. It was made available on the Architect i 1000SR system, which can run 100-200 tests per hour. The company shipped a total of 4 million tests in April, and ramped up to nearly 30 million tests in May due to an EUA for the IgG test on the Alinity i system as well. The company also received a government contract to supply millions of these tests to National Health Service labs across the U.K. in May, beginning with 800,000 antibody tests shipped. The test received EU approval in December.

Another lab-based serology test—AdviseDx SARS-CoV-2 IgM—gained EUA in October to run on the Architect and Alinity platforms. The IgM antibody helps determine recent infection because those antibodies become undetectable within weeks or months following infection.

The most welcome diagnostic innovation via EUA arrived last August—the BinaxNOW COVID-19 Ag card rapid antigen test. The credit card-sized nasal swab test costs only $5 and can spot active COVID-19 infection in 15 minutes.

“Results can be read directly from the testing card, a similar design to some pregnancy tests,” the FDA said in a statement. “This simple design is fast and efficient for healthcare providers and patients and does not need the use of an analyzer.”

ANALYST INSIGHTS: Abbott has had a great run due to their COVID capabilities in their Diagnostics business. At the same time, their Diabetes products continue to hum along with positive growth. While their stock may have a temporary softness due to the high expectations during COVID, expect Abbott to continue to outperform in the long run.

—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors

Abbott simultaneously launched the complementary NAVICA app to display a temporary digital health pass renewed with each new diagnostic test. Clinical study data on BinaxNOW demonstrated 97.1 percent sensitivity and 98.5 percent specificity within seven days of symptom onset. Abbott pledged to ship 50 million tests a month by October.

Two days later, the Trump Administration struck a $750 million deal with Abbott for 150 million of the rapid tests to increase rapid testing availability. The government began distributing the tests a month later.

“This is a major development that will help our country to remain open, get Americans back to work, and kids back to school,” then-White House Strategic Communications Director Alyssa Farah told the press. “The Trump administration is proud to partner with Abbott Labs to make this purchase possible to help the American people.”

The first shipments of 6.5 million tests rolled out that week, each state receiving their share based on population.

In December, BinaxNow grabbed an EUA for virtually guided home use. Abbott partnered with digital health firm eMed to deliver an expected 30 million home tests in this year’s first quarter, with 90 million more after the second quarter expected. eMed’s service determines eligibility, guides self-collection, generates public health reporting requirements, and generates results via the NAVICA app in about 20 minutes for $25 a pop.

Abbott’s diagnostic prowess won the company an impressive 13.2 revenue boost from the prior year. The firm’s medical device and diagnostics business pocketed nearly $22.95 billion. The chief drivers were the molecular diagnostic and rapid diagnostic businesses, which skyrocketed 225 percent to $1.4 billion and 113 percent to $4.3 billion, respectively. The core laboratory business fell 4 percent to $4.5 billion, and the point of care segment slipped 8 percent to $516 million.

Save for the two diagnostics franchises and one medical device business (stay tuned) all Abbott medtech categories reported losses due to the global pandemic slowing production and stifling elective procedures. The historically profitable rhythm management business fell 3 percent to $2.1 billion.

The Gallant ICD and CRT-D devices obtained CE marks last February. The devices pair with Abbott’s secure myMerlinPulse mobile app to help streamline communication and increase engagement between doctors and patients. The CRT-D system includes Abbott’s MultiPoint Pacing and SyncAV features to help more patients respond to CRT therapy. The ICD device features Abbott’s TailoredTherapy suite to help physicians more intuitively program devices. The Gallant devices received FDA approval last July.

Structural heart revenue slowed 11 percent to reach $1.2 billion in revenue last year.

At the end of last January, Abbott earned EU approval for the Tendyne transcatheter mitral valve implantation (TAVI) system. For patients at high risk for open-heart surgery or in situations when the mitral valve is too damaged for a successful repair with the firm’s MitraClip device, Tendyne offers a minimally invasive treatment option when the leaky valve must be replaced. The self-expanding valve is delivered through a small incision in the chest and up through the heart, where it’s implanted in a beating heart, replacing the native mitral valve.

The FlexNav delivery system to improve control and delivery of the firm’s Portico TAVI system garnered a CE mark last March. Physicians implanting Portico gained the benefit of improved delivery, flexibility, and navigation during implantation, even in complex cardiac anatomies.

The TriClip transcatheter tricuspid valve repair system won CE mark last April. According to Abbott, it is the first minimally invasive, clip-based tricuspid valve repair device in the world. It’s delivered through the femoral vein and works by clipping together a portion of the leaflets of the tricuspid valve to reduce backflow of blood, allowing the heart to pump blood more efficiently. TriClip leverages the same clip-based technology as MitraClip with a differentiated delivery system designed for delivery to the tricuspid valve.

In July the firm resolved its patent disputes with Edward Lifesciences related to transcatheter mitral and tricuspid repair products. All pending cases and appeals were dismissed and the companies agreed not to litigate patent disputes with each other in those fields for 10 years. The injunctions in place against the sale of Edwards’ transcatheter mitral and tricuspid repair system were lifted. Abbott received a one-time payment and will receive ongoing payments based on Edwards’ Pascal sales through 2025.

The fourth-gen MitraClip TMVR system (MitraClip G4) acquired a CE mark in September. Enhancements to the delivery system offer advanced steering during implant, four clip sizes with two wider clips, and independently controlled grippers to grasp one or both mitral valve leaflets at a time during the procedure.

Vascular product sales plummeted 18 percent to $2.3 billion, the drastic drop in part due to COVID-19 and from lower Chinese sales in 2020’s fourth quarter resulting from a new national tender program.

The firm launched a virtual reality-based training program for cardiologists in December. It incorporates virtual with traditional training techniques to increase experience and expertise in using Abbott’s OCT (optical coherence tomography) imaging and improve outcomes in patients needing a stent to open clogged arteries. The new OCT virtual reality-based training programs, powered by Oculus Go, aim to dramatically enhance decision-making for physicians utilizing OCT instead of angiography.

Electrophysiology and heart failure proceeds fell 8 and 4 percent respectively, to $1.6 billion and $740 million.

At the beginning of last year the company earned FDA approval for an alternative surgical technique for the HeartMate 3 heart pump that allows heart failure patients to avoid open heart surgery. The lateral thoracotomy technique creates an incision between the ribs to access the heart rather than typical open heart surgery, and can result in less bleeding and shorter recovery times. HeartMate 3 was approved for pediatric patients battling advanced refractory left ventricular heart failure in December.

The EnSite X EP system nabbed a CE mark and approval in Australia in November. The system creates a 3D model of cardiac anatomy in real-time so areas of the heart needing ablation treatment are clearly seen. Traditional impedance monitoring or electromagnetic technology can be used to precisely locate sensor-enabled catheters during treatment.

Neuromodulation was hit second-hardest, reporting a 16 percent loss with $702 million in sales.

Last January saw expanded indication for the Infinity deep brain stimulation (DBS) system that extended the device’s reach to the brain’s internal globus pallidus (GPi). The GPi is crucial to motor function, and targeting it with DBS can improve Parkinson’s symptoms not controlled by medication. With this approval, the Infinity DBS is approved for all major targets used to treat movement disorders, Parkinson’s, and essential tremor: the subthalamic nucleus, ventral intermediate nucleus, and GPi.

Abbott gained FDA approval for a Patient Controller app on iOS devices in July. It was integrated into Abbott’s broader NeuroSphere Digital Care connected care management platform, which was released in May. It is compatible with the Infinity DBS System, Proclaim XR SCS System, and Proclaim DRG Neurostimulation System, allowing physicians to more easily treat individual patient needs.

The IonicRF generator launched in the U.S. in November. The minimally invasive radiofrequency ablation device uses heat to target specific nerves and block pain signals for up to a year. It was the first Abbott-developed radiofrequency ablation device and is approved in Europe as well.

The lone medical device business to profit last year was Abbott’s powerhouse diabetes care portfolio. The franchise pocketed $3.3 billion last year, rising a remarkable 29 percent amid the health crisis due to continued strong sales of the FreeStyle Libre continuous glucose monitoring (CGM) system. FreeStyle Libre sales totaled $2.6 billion, a 42.6 percent rise over the prior year.

Last February Abbott and Insulet Corporation began a partnership to integrate glucose sensing and automated delivery technologies. The collaboration combined the FreeStyle Libre CGM with Insulet’s Omnipod Horizon automated, tubeless insulin delivery system. Glucose data from the sensor will be sent to the Omnipod, which is embedded with an algorithm to automatically adjust insulin delivery without an additional device, connection, or tubing. The system will always remain in automated insulin delivery mode and can be controlled through a smartphone app.

In April the company earned FDA authorization to use the FreeStyle Libre 14 day system in a hospital setting so frontline healthcare workers could remotely monitor diabetes patients receiving inpatient care. The firm also donated 25,000 FreeStyle Libre 14 day sensors in partnership with the American Diabetes Association, Insulin for Life USA, and Diabetes Disaster Response Coalition. Health Canada authorization for this was obtained at the end of April.

In June Abbott finalized the agreement began in 2019 with Tandem Diabetes Care to develop and commercialize solutions combining FreeStyle Libre and Tandem’s t:slim X2 insulin pump. The firms will work to digitally connect their technologies for future automated insulin delivery systems, which will provide options to tailor and simplify diabetes management.

The Libre Sense glucose sport biosensor was introduced in Europe via CE mark in September. The consumer over-the-counter product provides glucose monitoring via a mobile app to athletes aged 16+ performing cycling, running, and swimming, to understand the efficacy of their nutrition choices on training and competition. Tracking and understanding glucose levels helps athletes fuel appropriately through nutrition to avoid fatigue from low glucose and know when to replenish during training and competition.

The FreeStyle Libre 3 CGM system earned CE mark certification in September as well. It features a 14-day wear time and a smaller and thinner sensor—total volume was 70 percent reduced, according to Abbott. The sensor is applied via a one-piece applicator worn on the back of the upper arm and does not need a fingerstick. An accompanying mobile app enables users to capture and view real-time glucose levels, glucose history, and trend arrows.

$19.95 Billion ($39.1B total)
Prior Fiscal: $18.86 Billion
Percentage Change: +5.8%
No. of Employees: 107,000 (total)

Last November, scientists working with advanced DNA sequencing technology documented a hitherto unidentified strain of HIV under the group responsible for the majority of human infections.

Though found in only three people, the findings by Abbott Laboratories—an HIV test maker—will stir conversation about how to classify new surfacing viral strains. Strains from HIV Group M are most common and are responsible for the global AIDS pandemic, affecting about 90 percent of the 37.9 million people the World Health Organization estimated were living with HIV in 2018.

Abbott’s findings established a 10th group M strain, the first identified since 2000. It was traced to the Democratic Republic of Congo, where the first HIV infection in humans emerged in the mid-1900s. According to The Wall Street Journal, researchers and epidemiologists don’t expect the new strain to change the way HIV is diagnosed or treated. But new strains can offer clues about how HIV evolved and spread.

“There’s a lot of mystery around why certain things happened. New strains can unravel some of that unknown history,” Brian Foley, an HIV geneticist at New Mexico’s Los Alamos National Laboratory, which holds the largest HIV gene bank and sets the guidelines on classifying new strains, told Forbes. He said the findings could help achieve the ultimate goal in fighting HIV, a vaccine.

The new Group M strain, called L, was spotted by Abbott’s global surveillance program, which seeks out unusual HIV and hepatitis strains. The program helps keep Abbott’s diagnostics tests up to speed. With $7.7 billion in sales (up 5.9 percent from the prior fiscal year) the global medical device maker’s diagnostics business makes up about 39 percent of its $19.95 billion medical technology revenue—up 5.8 percent from 2018. Growth was seen across all four segments: core laboratory, molecular, point of care, and rapid diagnostics, the latter of which grew by 400 percent due to Alere’s full integration.

The Alinity m diagnostics system and assays earned a CE mark last March. Initial assays included HIV-1, hepatitis B virus, and hepatitis C virus; sexual health-related testing for Chlamydia trachomatis, Neisseria gonorrhoeae, Trichomonas vaginalis, and Mycoplasma genitalium or CT/NG/TV/MG panel; and high-risk human papillomavirus (HPV) testing. Alinity m can potentially shrink lab equipment footprint from four to six instruments down to one.

The FDA approved the Alinity s blood and plasma screening system in July. The new system can run up to 600 tests an hour, increases “walk-away time” (when lab workers are free to manage other responsibilities as samples are processed) to a minimum of three hours, and allows continuous sample load and unload. An intuitive software interface, menu design, and sample loading layout also flattens the device’s learning curve.

September saw an FDA nod for the ARCHITECT STAT High Sensitivity Troponin-I blood test for heart attack diagnosis. The test measures very low levels of troponin so heart attack patients can be evaluated within two to four hours. According to a study in BMJ, women may particularly benefit from the high-sensitivity test because they often have lower troponin levels than men, which contemporary troponin tests might miss.

The Determine HBsAg test to spot hepatitis B surface antigen in serum, plasma, or whole blood received a CE mark last February. Deployed at the point of care, the highly sensitive lateral flow test detects the hepatitis B virus in 15 minutes with an analytical sensitivity of 0.1 IU/mL.

Last June saw the launch of the Afinion HbA1c Dx assay on the Afinion 2 and Afinion AS100 analyzers. The rapid point-of-care test generates glycated hemoglobin results in about three minutes so diabetes can be diagnosed and an individualized care plan developed in one doctor’s visit.

Last April, the company began the next phase of a partnership with the U.S. Department of Defense and researchers from the TRACK-TBI Network by starting a clinical trial to assess Abbott’s point-of-care i-STAT Alinity blood test technology under development to evaluate brain injuries in minutes using only a few drops of blood.

“Whether on the battlefield or in the emergency room, we need quick and accurate information to help assess a person who may have sustained brain injury,” said Geoffrey T. Manley, M.D., Ph.D., principal investigator of TRACK-TBI, neurosurgeon, and professor of neurosurgery, University of California, San Francisco. “Our goal with this partnership is to validate the scientific rigor behind new technologies, like this blood test, and how they can help ensure the best care for our troops and patients.”

The Medical Devices business was responsible for the remaining $12.25 billion in revenue, reaching double-digit growth with 10.5 percent. The Diabetes Care, Structural Heart, Electrophysiology, and Heart Failure portfolios’ double-digit revenue expansions were the main drivers for Abbott’s success last year. Structural heart revenue growth was broad-based across several areas of the business. Heart failure segment growth reflected rapid U.S. market adoption of the HeartMate 3 Left Ventricular Assist Device and higher CardioMEMS heart failure monitoring system sales.

Higher 2019 international rhythm management sales were offset by a 4.4 percent decrease in U.S. revenue. The next generation of the paperclip-sized Confirm Rx insertable cardiac monitor (ICM) won both FDA and CE mark approval last May. The Confirm Rx ICM combines smartphone connectivity and continuous, remote monitoring to track unpredictable heart rhythm problems. It is the only ICM device on the market that syncs to a smartphone via Bluetooth. It also features a mobile app so an additional transmitter isn’t needed.

Electrophysiology sales grew thanks to high global sales of cardiac diagnostic and ablation catheters. The TactiCath Contact Force Ablation Catheter, Sensor Enabled also obtained FDA approval last January to treat AFib. It delivers more precise heart images overlaid with real-time electrical activity information. “Contact force” technology prevents surgeons from applying too much or insufficient pressure to heart tissue during cardiac ablation procedures. TactiCath’s design allows for better reach and maneuverability, according to Abbott.

The structural heart business kicked off its year by acquiring a less-invasive mitral valve replacement in development from privately held Cephea Valve Technologies for an undisclosed amount. The artificial valve is delivered through a vein in the leg to forego the need for open-heart surgery. Abbott’s minimally invasive mitral valve disease business now includes two valve replacements (Tendyne in 2015 and Cephea) and the MitraClip valve repair device.

Last January, Abbott won FDA approval for Amplatzer Piccolo, which (according to Abbott) was the world’s first device that can be minimally invasively implanted in babies weighing as little as two pounds to treat patent ductus arteriosus (PDA), a common congenital opening in the heart. Smaller than a small pea, the self-expanding, wire mesh implant is inserted using a transcatheter approach via the leg. The approval is a significant advance to treat premature infants and newborns with PDA who are non-responsive to medical management and a high risk for surgery. Amplatzer Piccolo nabbed a CE mark in September.

“This approval is a potentially life-saving advance for the very smallest premature infants that will help us treat these delicate babies who might otherwise not be able to survive,” said Evan Zahn, M.D., director of the Congenital Heart Program at Cedars-Sinai’s Smidt Heart Institute, and principal investigator for the study that led to FDA approval.

Supported by the landmark COAPT trial’s positive results, The MitraClip transcatheter clip-based therapy won expanded FDA indication for difficult-to-treat heart failure patients with secondary mitral regurgitation last March. According to Abbott, MitraClip then became the first transcatheter mitral valve intervention therapy to treat patients fitting that description.

MitraClip G4, the fourth-generation of MitraClip, got an FDA nod in July. It has been enhanced with a larger clip size range (four sizes), alternative leaflet grasping feature, and real-time facilitation of procedure assessment. An upgraded catheter with an integrated pressure monitor provides real-time continuous left atrial pressure monitoring during implantation.

A first of its kind in the U.S., the TRILUMINATE Pivotal IDE trial evaluating Abbott’s TriClip catheter-based, non-surgical tricuspid valve repair for severe tricuspid regurgitation began in September with first enrollments at Minneapolis’ Abbott Northwestern Hospital. The study enrolled 700 patients in total. Alongside the study, TriClip was accepted for parallel FDA and Centers for Medicare and Medicaid Services (CMS) review.

Neuromodulation sales declined 4 percent from the previous year. The Proclaim XR recharge-free spinal cord stimulator for chronic pain obtained FDA approval in September. It uses low energy proprietary BurstDR therapy coupled with BoldXR low dosing protocol, and has a battery life of up to 10 years. Low-energy stimulation finds the lowest effective dose as determined by the treating clinician. Proclaim XR also uses Apple mobile digital devices and Bluetooth to help discreetly manage pain.

Although Abbott’s diabetes business released no new products last year, the continued success of the FreeStyle Libre continuous glucose monitoring system kept the segment thriving. The $1.8 billion in FreeStyle Libre sales in 2019 was a whopping 69.8 percent increase over 2018. The company also entered into a number of partnerships with firms with expertise in technologies complementary to FreeStyle Libre.

February: Integrating insulin dose data from Novo Nordisk’s prefilled and durable connected insulin pens into digital health tools compatible with FreeStyle Libre. Glucose and insulin data can then be viewed together for more meaningful, productive health conversation.

September: Combining FreeStyle Libre with global biopharmaceutical firm Sanofi’s insulin dosing information for future smart pens, insulin titration apps, and cloud software.

October: Integrating FreeStyle Libre with the Omada Health digital care program. The combined solution will generate real-time glucose data and actionable information for better management and will provide personalized recommendations.

October: Developing and commercializing integrated diabetes solutions combining FreeStyle Libre with Tandem Diabetes Care’s t:slim X2 insulin pump. t:slim X2 was the first to earn FDA clearance in a new device category called alternate controller enabled (ACE) pumps early in 2019. ACE pumps have special controls for reliable, secure communication with compatible external devices like FreeStyle Libre. Combining the two would allow diabetes patients to choose tools and tailor management to their needs.

Under New Management
Twenty-one-year CEO Miles D. White (the second longest tenure for a non-founder in today’s S&P 100) announced his retirement at age 64 in November. He remains as executive chairman, and 23-year Abbott veteran, president, and Chief Operating Officer Robert B. Ford succeeded White on March 31 of this year.

Named chairman and CEO in 1998, White strategically reshaped Abbott many times, most recently by adding medical device maker St. Jude Medical Inc. and diagnostics firm Alere in 2017. He also led the spinouts of hospital products business Hospira Inc. in 2004 (acquired by Pfizer for $17 billion in 2015) and drug business AbbVie (now valued at over $125 billion) in 2013. Abbott’s market capitalization hovered around $75 billion when White took over, and has soared to $149 billion in 2019, according to Forbes.

“We are deeply grateful for the leadership and strategic direction Miles has provided over the past two decades,” said William A. Osborn, lead director and chair of the Nominations and Governance Committee of Abbott’s Board of Directors. “He embodies the values of the company in every respect and his impact on employees, shareholders, and most importantly, patients, will continue for years to come. He has positioned Abbott well for continued top-tier growth and innovation and we thank him for his countless contributions.”

COVID-19 Consequences

Q2 2020 Medical Device & Diagnostics Revenue: $4.4 Billion
Q2 2019 Medical Device & Diagnostics Revenue: $5 Billion
Percentage Change: -12%

Although COVID-19 stifled Abbott’s medtech revenue 12 percent, Diagnostics sales jumped 7 percent thanks to strong demand for the company’s five  emergency use authorized (EUA) COVID-19 tests.

The RealTime SARS-CoV-2 molecular test gained EUA on March 18. The test is run on the company’s m2000 RealTime System, which can run up to 470 tests in 24 hours. The company immediately began shipping 150,000 tests to existing U.S. customers after receiving FDA authorization.

On March 28, Abbott gained EUA for a molecular point-of-care test that can detect COVID-19 in five minutes with negative results in 13 minutes. It runs on the ID NOW platform, which weighs 6.6 pounds and is about the size of a small toaster. The test can be conducted in physicians’ offices, urgent care clinics, and hospital ERs. ID NOW COVID-19 tests became available in urgent care settings the week of March 30.

Abbott’s FreeStyle Libre 14-day continuous glucose monitor was cleared for use in hospitals on April 8, minimizing diabetes patients’ exposure to the virus. According to the CDC, over half of all diabetes patients diagnosed with COVID-19 are hospitalized.

The company launched a serology blood test to detect the antibody IgG that identifies if a person has had COVID-19. It will shed light on how long antibodies stay in the body and if they provide immunity, potentially supporting treatment and vaccine development.

On April 15, CEO Robert Ford was named to the White House task force designated by President Trump to provide recommendations on how best to safely reopen the U.S. economy in the wake of the pandemic.

Abbott gained EUA on May 11 for its SARS-CoV-2 IgG lab-based serology blood test on the Alinity i system. The company shipped almost 30 million antibody tests in May.

A COVID-19 molecular test for the new Alinity m molecular laboratory instrument received FDA emergency authorization on May 12. Alinity m can run up to 1,080 tests in 24 hours.

The FDA warned on May 15 that early data (15 adverse event reports) suggested Abbott’s ID NOW point-of-care test to diagnose COVID-19 may return false negatives. One New York University study found it missed close to half of the positive samples detected by a rival company’s test. But later that month a senior FDA official said COVID-19 tests outside lab setting would be considered useful in fighting the pandemic even if they missed one in five positive cases. According to federal contract records, over $205 million worth of contracts have been issued by the U.S. government for the tests.

Calling the NYU research “flawed,” Abbott immediately underwent a multi-site clinical study, and reported interim results a week later that determined test performance is ≥94.7 percent in positive agreement (sensitivity) and ≥98.6 percent negative agreement (specificity) when compared to two different lab-based PCR reference methods.

By June, however, the FDA had received 106 adverse event reports for the test. The agency has not received a single adverse event report for any other point-of-care tests meant to diagnose COVID-19, an FDA spokesperson told Kaiser Health News. Medical professionals are split over the FDA’s proclaimed 80 percent threshold.

“There’s no way I would be comfortable missing 2 out of 10 patients,” said Susan Whittier, director of clinical microbiology at NewYork-Presbyterian/Columbia University Medical Center.

Abbott has since made several revisions for how its rapid test should be performed. It previously removed language saying swabs could be placed in viral transport medium before the test is run to remove risk of dilution. In the latest, only direct swabs from patients should be inserted in the analyzer. Abbott also revised instructions for handling patient specimens.

“The difference now,” said Christopher Polage, medical director of Duke University Health System’s clinical microbiology lab, “is that people are so fearful and tolerance for false negatives is just zero.”

AT A GLANCE
$18.93 Billion ($30.6B total)
Prior Fiscal: $16.2 Billion
Percentage Change: +17%
No. of Employees: 103,000

In a January 2018 piece about the firm and its leader, Forbes senior contributor Bruce Japsen was right on the money when he stated Abbott’s CEO, Miles White, “may be setting the diversified healthcare company up for a calm year of paying down debt and investing in research and operational performance.” After experiencing back-to-back headlines-filled years in 2016 and 2017, dominated by the two multi-billion dollar acquisitions of St. Jude and Alere, as well as the subsequent ups and downs that came with both transactions—cybersecurity and “hacking” concerns with St. Jude devices, and ethical and financial issues with Alere—it’s no wonder 2018 was significantly quieter in comparison.

At the time of the Forbes article, Abbott’s debt load had recently been reduced by $4 billion from $28 billion, which represented the largest in the firm’s 130-year history (a result of the two major deals in the years prior). White expected to pay down another $4 billion before the end of 2018, noting that as a top priority. According to the firm’s 2018 annual report, the company exceeded that goal by approximately $700 million.

Without looking to conduct market-leading M&A transactions in 2018, Abbott was able to focus on organic growth through product launches and innovation. Although the firm wasn’t making much noise in business and financial headlines, that by no means meant it was operating under the radar during the year. Just ask now 4-year-old Sadie Rutenberg of Seattle, Wash., how Abbott has made an impact.

Sadie, the “cover model” for the firm’s 2018 annual report, was a participant in a clinical trial for the Masters HP 15-mm rotatable mechanical heart valve, becoming the first child in the U.S. to receive the Abbott device. The dime-sized implant—the world’s smallest mechanical heart valve for pediatric patients with heart defects—received FDA approval in March 2018 and represented just one way the organization had a substantial effect during the year.

“There’s an urgent need for the smallest babies and children who need a suitable replacement valve in order to survive,” Michael Dale, vice president of Abbott’s structural heart business, said in a news release announcing the approval. “Abbott’s new mechanical pediatric heart valve is a life-changing technology for the smallest pediatric patients, giving them a better chance at a long, healthy life with a fully functioning heart.”

In fact, the company claims in the U.S. alone, heart defects affect nearly 1 percent of births each year (about 40,000). Those involving a poorly functioning valve gained a new option with the approval.

The pediatric valve joined a family of products produced by Abbott to treat an array of heart-related conditions, housed within the firm’s Cardiovascular and Neuromodulation business. The unit, bolstered substantially by the St. Jude acquisition, contributed $9.44 billion to the organization’s 2018 $30.58 billion sales total as the largest of all of Abbott’s four major businesses.

The segment is comprised of six divisions, led in 2018 by the Vascular portion, which contributed $2.9 billion to the sales total ($1.1B from U.S. and $1.8B from international).

Following that was Rhythm Management, Electrophysiology, and Structural Heart, offering $2.1 billion ($1.0B U.S.; $1.1B intl.), $1.7 billion ($764M U.S.; $904M intl.), and $1.2 billion ($488M U.S.; $751M intl.) respectively. Only two portions were under $1 billion in sales—Neuromodulation at $864 million ($690M U.S. and $174M intl.) and Heart Failure at $646 million ($467M U.S. and $179 intl.). Perhaps not so coincidently, those two units were also the only ones of the six where U.S. sales exceeded those from abroad. Further, five of the six units saw growth over the prior fiscal year, which was $8.9 billion for the entire business in 2017, with Rhythm Management as the lone exception.

Although perhaps most newsworthy, the pediatric valve was not the only new product from Abbott’s Cardiovascular and Neuromodulation business to gain attention during its last fiscal year. Among other notable product news was:

FDA approval for magnetic resonance-conditional labeling for the Quadra Assura MP cardiac resynchronization therapy defibrillator and Fortify Assura implantable cardioverter defibrillator. The approvals follow with similar decisions by the regulatory agency regarding MRI-ready implantable cardiac solutions sold by Abbott. In addition, both the Fortify Assura and Quadra Assura MP include the company’s suite of TailoredTherapy features, which are designed to provide physicians additional flexibility and control in how they deliver therapy to treat their patients’ cardiac arrhythmias and congestive heart failure. Finally, the Quadra Assura MP also offers MultiPoint Pacing and SyncAV technology to provide additional options for patients who are not responsive to traditional cardiac resynchronization therapy.

The Advisor HD Grid Mapping Catheter with Sensor Enabled technology gained FDA clearance in May. The device’s design allows physicians to capture and analyze data in a novel manner to create highly detailed maps of the heart that better differentiate healthy from unhealthy tissue.

The DRG Invisible Trial System, which had secured both U.S. FDA approval and a European CE mark, was launched in November. The technology leverages Abbott’s dorsal root ganglion (DRG) stimulation technology, providing an opportunity for patients to try a non-opioid pain therapy before actually getting an implantable device. If the DRG therapy works for a patient, they would then have the company’s Proclaim DRG system implanted.

The XIENCE Sierra, the latest in the company’s line of everolimus-eluting coronary stents, received FDA approval last May. Design and technology advances in this generation of XIENCE provide features specifically designed for the treatment of complex blockages that now account for up to 70 percent of cases, according to Abbott. Those design innovations include a thinner profile, increased flexibility, longer lengths, and small diameters.

An EU CE mark was received and FDA granted approval of the firm’s next-generation version of the MitraClip heart valve repair device used to repair a leaky mitral valve without open-heart surgery. This offering provides advanced steering, navigation, and positioning capabilities, making it easier to use in difficult anatomies.

In October, the HeartMate 3 Left Ventricular Assist Device (LVAD) gained FDA approval as a destination therapy for people living with advanced heart failure, enabling the system to be used for patients not eligible for a transplant who will live with their device for the rest of their lives. While reducing the size of the LVAD, the company also employed Full MagLev (fully magnetically-levitated) Flow, which reduces trauma to the blood passing through the pump while improving flow.

Abbott’s Diagnostics business came in second in overall sales contributions at $7.5 billion, but reflected the greatest dollar increase over prior year, which was $5.6 billion in 2017. While all four units of Diagnostics saw increases in sales over the prior year, two were almost flat while a third accounted for almost the entirety of the rise. Core Laboratory enjoyed a modest increase between 2017’s $4.1 billion in sales to 2018’s $4.4 billion ($985M U.S.; $3.4B intl.). Point of Care and Molecular, virtually flat, had sales of $553M and $484M in 2018 respectively. Experiencing a huge bump in contribution, Rapid Diagnostics went from $540 million in 2017 to $2.1 billion in 2018 ($1.1B U.S.; $924M intl.). Undoubtedly, the full integration of Alere and its product line into the fold was the most significant factor in the increase year-over-year.

Similar to the Cardiovascular and Neuromodulation business, Diagnostics enjoyed positive news of its own with regard to its product offerings.

Most notable among the highlights was the CE mark awarded for the first troponin test to enable a better prediction of the chances for a heart attack or other cardiac event potentially months to years in advance in people who otherwise appear healthy. The test enables doctors to alter how they identify those at risk for developing heart disease because the diagnostic test uses a biomarker specific to the heart. With this added information, doctors can help ensure the correct treatment is given to people at high risk and prevent unnecessary testing, medication, and costs for lower-risk patients.

Across the pond, the FDA cleared Abbott’s next-generation Influenza A & B 2 and Strep A 2 molecular assays for point-of-care testing. According to the company, at the time of the clearance announcement, the Influenza A & B 2 assay offers the fastest point-of-care molecular detection and differentiation of influenza A and B virus available—13 minutes or less, with early call out of positive results in as little as five minutes. The Strep A 2 provides molecular detection of Group A Streptococcus bacterial nucleic acid more than twice as rapidly as other available molecular tests—in six minutes or less, with call out of positive results as early as two minutes.

The company also announced the first viral load point-of-care test designed to provide healthcare professionals, especially in remote and underserved communities, with a fast, accurate, and easy-to-use test to manage HIV. By providing viral load test results in less than 70 minutes, this life-changing technology allows patients to get tested and treated in the same visit.

A CE mark was received for the Alinity h-series integrated system for hematology testing. The system integrates the Alinity hq with the Alinity hs slide maker and stainer module into a combined solution. The solution is 20 percent faster per m2 than other currently available integrated hematology systems, according to Abbott, with a throughput of 133 complete blood counts (CBCs) per m2.

Also in 2018, the company launched its Afinion 2 analyzer in the U.S. for diabetes management. The analyzer is a compact rapid, multi-assay platform that streamlines and simplifies the delivery of actionable, accurate measurements of hemoglobin A1c (HbA1c) and albumin to creatinine ratio (ACR) results at the point of care. The system arms healthcare professionals with the information needed to make fast and accurate medical decisions—three minutes for HbA1c and five minutes for ACR—enabling healthcare professionals to dedicate more time to counseling diabetes patients within a single office visit.

Speaking of diabetes, Abbott reports on its offerings for this space as “other” in its annual report, although it’s a significant segment of the company. The products out of this portion led to just shy of $2 billion in sales, with a 25/75 percent ratio U.S./international ($493 million versus $1.5 billion). The group saw a substantial rise over 2017, which had the contribution from this segment at $1.65 billion.

Abbott’s diabetes focus is centered around its Freestyle Libre product, which was the focus of several notable headlines in 2018. Making the most waves was the announcement of its app for the iPhone that enables users to access glucose data directly from their Apple smartphone. This capability eliminated the need for users to carry a separate reader device. While the app had been available for Android users since 2015, it had just been released for the iPhone.

Also of significance was the announcement of the Freestyle Libre being made available to Medicare patients. The factory-calibrated system is the only CGM system recognized by Medicare that requires no user calibration whatsoever (either by fingerstick or manual data entry) at the time of the company’s announcement. The system also does not require the need for routine fingersticks and allows for patients to dose insulin based on the system’s results.

$16.2 Billion ($27.4B total)
NO. OF EMPLOYEES: 99,000

Wednesday, Jan. 4, 2017, ushered in a new era for Abbott Labs and the medical device industry as a whole. It solidified the largest medtech deal since Medtronic’s $50 billion Covidien buyout, added a bevy of cardiovascular and chronic pain management technologies to Abbott’s arsenal, and constructed a brand new medical device behemoth.

According to the Chicago Tribune, since integrating Minnesota-based St. Jude Medical Inc., cardiovascular and chronic pain devices now comprise about a third of Abbott’s total business. Prior to that, cardiovascular technologies made up approximately 15 percent of the business, and the chronic pain management segment didn’t exist at all. In fact, 2017 revenue from the chronic pain management and cardiovascular sales alone—about $8.9 billion—would have been enough to earn it a spot in the Top 30.

But with $16.2 billion in fiscal 2017 medical device and diagnostics sales (year ended Dec. 31), Abbott surged ahead several spots in the list. Chiefly thanks to the full integration of St. Jude, the Illinois-based firm’s medical device earnings jumped an earth-shattering 60.4 percent over the previous year. To fully realize the sale’s tremendous impact, Medtronic’s integration of Covidien netted it a 42.3 percent payoff boost—especially impactful considering the $25 billion St. Jude deal was half the price.

Absorbing St. Jude didn’t come without a price to Abbott, however. The Federal Trade Commission only gave its consent to  the deal after Abbott agreed to sell its business focused on steerable sheaths—which are used to guide catheters in treating heart arrhythmias—and St. Jude’s vascular closure device business to Tokyo-based medical device maker Terumo Corp.

Less than a week after the deal closed, the FDA also confirmed that St. Jude’s implantable cardiac devices contained vulnerabilities that could permit hackers to access a device. Once in, the agency warned that intruders might be able to deplete the battery or administer incorrect pacing or shocks.

The potential for vulnerability was already in the public mind as early as August 2016, when investment firm Muddy Waters founder Carson Block released a report claiming St. Jude’s devices could be tampered with. At the time, St. Jude said the claims were “absolutely untrue” and subsequently filed a lawsuit against the firm.

Block told CNN Tech the FDA’s announcement “vindicates” his firm’s research. St. Jude also developed a software patch in response to the issue to fix the vulnerabilities, but Block was still skeptical.

“It also reaffirms our belief that had we not gone public, St. Jude would not have remediated the vulnerabilities,” he said. “Regardless, the announced fixes do not appear to address many of the larger problems, including the existence of a universal code that could allow hackers to control the implants.”

Abbott finally remediated the issue late last August, following an FDA approval for a software update earlier that month. The update included a battery performance alert for implantable cardioverter defibrillators (ICDs) that warns physicians about the risk of premature battery depletion earlier. According to the Tribune, as of October 2016, two people had died in incidents associated with the devices. Further, as of that date, 841 out of nearly 400,000 devices experienced the early battery depletion.

Though the FDA found no instances of patient harm resulting from the cybersecurity issue, Abbott also released a planned update to pacemaker firmware that added additional security protections to reduce the risk of unauthorized access.

“All industries need to be constantly vigilant against unauthorized access,” Robert Ford, Abbott’s executive vice president of medical devices, commented regarding the update. “This isn’t a static process, which is why we’re working with others in the healthcare sector to ensure we’re proactively addressing common topics to further advance the security of devices and systems.”

And in the midst of all of this, Abbott was still embroiled in the tumultuous deal to purchase Massachusetts-based point-of-care (POC) diagnostics firm Alere. Those following the acquisition’s sordid history may recall that Abbott had previously attempted to back out of the deal after a slew of financial and ethical missteps that came to light during negotiations. This led to lawsuits filed from both companies, with Alere forcing Abbott to move ahead with the deal, and Abbott wanting to back out, citing “substantial loss” in the diagnostic company’s value.

Rather than abandoning the deal, last April Abbott instead offered to purchase Alere at about $5.3 billion, $500 million down from the original purchase price—and Alere agreed. Abbott ended up paying $51 per share for the company, a far better outcome than what Alere’s shareholders had priced in—according to Reuters, Alere’s shares closed at $42.31 the day before the offer was made.

“The renegotiated price is in the realm of investor expectations and seems to reflect the impact from some of the challenges witnessed in Alere’s business over the last 12 months,” Raymond James analyst Nicholas Jansen told Reuters.

After nearly 20 months of negotiations, Abbott finally closed the deal for Alere early last October. The transaction made the company a leading force in the POC testing market, the fastest growing segment of the $50 billion in-vitro diagnostics (IVD) market. According to Abbott, the POC testing market was valued at $7 billion in 2016, and is growing quickly as physicians increasingly adopt rapid tests that speed up treatment. POC tests provide results to doctors in minutes and can be conducted in the physician’s office, an ambulance, or at home.

Abbott’s diagnostics business produces core laboratory, molecular, and POC diagnostics, in addition to rapid diagnostics offerings obtained through buying Alere. Last year, the business accrued $5.6 billion in revenue, rising a respectable 16.7 percent primarily due to the addition of Alere’s portfolio in the fourth quarter, which touted $540 million in sales. Meanwhile, core laboratory sales rose 6 percent to $4.1 billion, molecular diagnostics stepped up 2 percent to $463 million, and POC diagnostics increased 7 percent to $550 million. Continued adoption of the i-STAT handheld system and share gains in the global core laboratory and POC markets were also significant drivers of revenue expansion for this business.

A week after closing the St. Jude deal, Abbott gained CE mark clearance for its Alinity ci-series instruments for clinical chemistry and immunoassay diagnostics. The next generation of harmonized systems aim to help labs and hospital systems run more tests in less time, reduce human error, and increase testing productivity. With a flexible, modular design, the Alinity c clinical chemistry system and Alinity i immunoassay system can operate individually or as an integrated Alinity ci-series unit, all within half the size of typical diagnostics systems. The system features increased loading capacity for samples and tests, continuous access to solutions and supplies, error-proof design elements, and an intuitive menu design with a user-friendly interface. The Alinity ci-series instruments also received FDA clearance last Halloween.

The same day the Alinity ci-series instruments hit the European market, Abbott also obtained EU approval for the Alinity s System for blood and plasma screening. The new system screens blood and plasma faster, more efficiently, and within a smaller footprint than Abbott’s current solutions. Alinity s can run up to 600 tests per hour and boosts walk-away time to a minimum of three hours. Further, it allows lab professionals the option to continuously load and unload samples and supplies without pausing or stopping the system.

Last February, the FDA authorized Abbott’s RealTime ZIKA molecular test to detect Zika virus in whole blood when collected alongside a patient-matched serum or plasma sample for emergency use. It marked the first molecular test made by a commercial manufacturer authorized to detect Zika in whole blood samples, which is significant because Zika can be detected in whole blood for longer (up to two months) and at higher levels than testing with serum and urine samples. The test generates results in five to seven hours and is also automated, so lab professionals can spend less time preparing and handling samples.

The Alinity hq analyzer for hematology achieved CE mark approval last June. Hematology studies the physiology of blood and the cause, diagnosis, treatment, and prevention of blood-related diseases. Hematology tests examine blood composition by identifying and quantifying different types of blood cells. The Alinity hq analyzer automates these tests and reports on 29 different parameters within minutes. It does so via advanced optical technology combined with algorithms to handle normal and pathological samples, and a scalable, modular design to customize configurations to better serve a broad array of labs.

The same day, Abbott procured CE mark clearance for the Sekisui CP3000 coagulation system, an automated analyzer that tests bleeding and clotting function in blood. Abbott’s AlinIQ informatics and service offerings streamline operations, providing intelligent lab insights and simplifying reading and interpretation of results. Further, the CP3000 coagulation system can automate and standardize sample management and flag unsuitable samples at the start of testing. It offers an expanded menu of barcoded reagents to reduce data entry errors. All of these functions work together to curb delays in coagulation testing related to sample errors and manual errors in the testing process.

Abbott’s cardiovascular and neuromodulation portfolio consists of remaining vascular and structural heart products not divested to Terumo, as well as rhythm management, electrophysiology, heart failure, and neuromodulation technologies obtained through the St. Jude purchase. This segment expectedly benefitted from the most significant revenue bump due to the deal—in 2017, the business generated $8.9 billion in sales, approximately tripling in revenue from the year prior.

The rhythm management, electrophysiology, heart failure, and neuromodulation product lines acquired from St. Jude exhibited $2.1 billion, $1.4 billion, $643 million, and $808 million in 2017 revenue respectively. The vascular portfolio rose 14 percent to achieve $2.9 billion in proceeds, and the structural heart segment ballooned 208 percent to earn $1.1 billion in sales.

Abbott launched the EnSite Precision cardiac mapping system and Advisor FL Circular Mapping Catheter to map cardiac arrhythmias during ablation treatments last January. Built on the foundation of St. Jude’s cardiac mapping technology, EnSite Precision lends automation, flexibility, and precision to cardiac mapping. The dual-technology platform leverages detailed anatomical models and maps to treat a wider range of arrhythmias, including atrial fibrillation and ventricular tachycardia. The system’s EnSite AutoMap module helps electrophysiologists more quickly perform morphology matching to identify the source of the irregular heartbeat. The TurboMap feature included within the module also allows physicians to construct heart maps 10 times faster than current systems using recorded data.

A week later, the Proclaim DRG (dorsal root ganglion) Neurostimulation system for chronic neuropathic pain was launched in Europe. Neuropathic pain is one of the most prevalent, yet undertreated forms of chronic pain. The device targets nerves within the DRG, which is a spinal structure rife with sensory nerves. By stimulating this area, Proclaim DRG can help patients manage difficult-to-treat chronic pain in the foot, knee, hip, or groin. Abbott’s ACCURATE study of Proclaim DRG also demonstrated that DRG therapy can offer superior pain relief for patients with complex regional pain syndrome and other focal chronic neuropathic pain conditions, as compared to traditional spinal cord stimulation technology.

“Many patients battling chronic neuropathic pain have not found adequate relief from other forms of treatment, which is why dorsal root ganglion stimulation has been such an important therapeutic advancement for pain specialists worldwide,” said Harold Nijhuis, M.D., an anesthesiologist from St. Antonius Ziekenhuis, Niuwegein, the Netherlands. “With the approval of the Proclaim DRG System, I am able to address chronic focal pain for my patients while offering them access to new, patient-centric benefits and features to improve their therapy experience.”

The Assurity MRI pacemaker and Tendril MRI pacing lead won FDA approval for MR-conditional labeling at the start of February 2017, granting patients implanted with the low-voltage devices the ability to undergo full-body MRI scans. The world’s smallest, longest lasting wireless MRI-compatible pacemaker can also wirelessly and remotely monitor the patient so physicians can securely access diagnostic metrics and daily device measurements. Assurity MRI also uses a handheld device to trigger pre-programmed MRI settings tailored to individual patients, eliminating the effort, time, and inconvenience of conventional pre- and post-scan reprogramming.

Abbott obtained FDA approval for the FlexAbility Ablation Catheter, Sensor Enabled a month later. Expanding the company’s electrophysiology portfolio for patients suffering from cardiac arrhythmias, the ablation catheter helps collect both impedance and magnetic data for detailed, accurate mapping and to assist in treating sites triggering or sustaining abnormal heart rhythms. FlexAbility was the second Sensor Enabled tool released in the United States for the EnSite system, and allows physicians to create highly detailed 3D cardiac models with the heart’s electrical activity overlaid on it.

Last May, the Confirm Rx Insertable Cardiac Monitor (ICM), the world’s first smartphone compatible ICM, was awarded CE mark approval. The Confirm Rx ICM continuously monitors heart rhythm and transmits information to the myMerlin mobile app so physicians can follow patients remotely and accurately diagnose arrhythmias. The ICM directly and securely communicates to the app downloaded onto a patient’s smartphone. Traditionally, remote monitoring has required bulky handheld or bedside transmitters, limiting patient mobility. Further, the device is slimmer than currently available ICMs, and touts one-touch indication-based programming to make the technology more convenient. The Confirm Rx ICM made its U.S. debut last October.

“The Confirm Rx ICM device will be an important tool for diagnosing patients with suspected arrhythmias, such as those who have experienced fainting or palpitations,” said Georg Nölker, M.D., head of electrophysiology at the Herz-und Diabeteszentrum NRW, Ruhr-University of Bad Oeynhausen, Germany. Dr. Nölker was one of the first physicians to implant the Confirm Rx ICM after it received CE mark clearance. “The simple insertion procedure and small device size make this technology convenient for both patients and providers. Patients can record symptoms directly on their smartphone without the need for a bedside transmitter or separate activator.”

A week later, the TactiCath Contact Force Ablation Catheter, Sensor Enabled, the latest catheter for use with the EnSite Precision system, gained EU approval. Like its predecessor, TactiCath provides dual impedance and magnetic technologies to more precisely model the heart. However, the integrated system also helps physicians determine where to apply optimal contact force (pressure) when creating a lesion during a cardiac ablation to correct a heart rhythm abnormality.

In August, Abbott began the TRILUMINATE study, a prospective, single-arm, multi-center study designed to evaluate the performance of clip-based technology in approximately 75 symptomatic moderate or severe tricuspid regurgitation patients at 25 sites across the United States and Europe. The transcatheter tricuspid valve repair system builds on Abbott’s more than a decade of development for the MitraClip system for mitral regurgitation. TRILUMINATE is the first trial of its kind to evaluate minimally invasive treatment using clip technology for moderate or severe tricuspid regurgitation.

Toward the end of last August, Abbott achieved an FDA nod for the Full MagLev HeartMate 3 Left Ventricular Assist System (LVAD). HeartMate 3 offered physicians a new option to manage advanced heart failure patients needing bridge-to-transplant or bridge to myocardial recovery. HeartMate 3’s pump uses magnetic levitation (the only LVAD of its kind to do so), which helps to reduce trauma to blood passing through the system. The “Full MagLev” technology allows the device’s rotor to be “suspended” by magnetic forces rather than bearings to more gently pass blood cells trough the pump, no matter what speed settings are used by the physician. It can pump up to 10 liters of blood per minute, and relies on a built-in “pulse,” which is programmed to ensure blood continues to move through without becoming static, reducing the risk of blood clots.

This past May, however, Abbott recalled all lots of HeartMate 3 due to a malfunction in the device’s outflow graft assembly that may cause the outflow graft to twist and close up (occlusion) over time.

Last September, the Ellipse ICD with Tendril MRI pacing lead and Durata and Optisure high voltage leads obtained FDA approval for MR-conditional labeling. Ellipse, according to Abbott, is one of the company’s most widely used ICDs and associated high-voltage leads.

Xience Sierra, the newest generation of Abbott’s Xience everolimus-eluting coronary stent system, received CE mark approval last October. Xience Sierra boosts cardiologists’ ability to access and unblock difficult-to-reach lesions thanks to a new stent design and delivery system and unique size options.

Abbott’s remaining medical device revenue is encompassed in the “Other” category, which since the sale of Abbott Medical Optics to J&J in 2016 consists entirely of Diabetes Care products. The segment—which will presumably be named Diabetes Care in next year’s report—reported $1.7 billion in revenue.

However, Diabetes Care released what was perhaps Abbott’s most momentous device of the year. Last September, the FreeStyle Libre Flash Glucose Monitoring System won FDA approval for adults. Consisting of a sensor about the size of a quarter worn on the back of the upper arm, the device was the first continuous glucose monitor (CGM) that doesn’t require diabetics to routinely prick their fingers, even for calibration. Patients place a handheld reader near the device to see current glucose levels, trends, patterns, and where their levels may be headed. Those readings can help patients determine how much insulin to take to manage their diabetes.

At the time of release, national health insurance systems in 18 countries—including the U.K., France, Germany, and Japan—agreed to partially cover the CGMs. Two months after the approval, FreeStyle Libre CGM entered the shelves of U.S. pharmacies. And as of January 2018, the device received coverage for Medicare patients with diabetes who use insulin and meet the eligibility criteria.

“The accessibility and affordability of this CGM technology is unprecedented, and this is a huge step forward for the diabetes community—both Type 1 and Type 2,” said George Grunberger, M.D., chairman of the Grunberger Diabetes Institute. “More importantly, the evidence of FreeStyle Libre being used in the real world shows how people are getting better insights into their glucose levels with this product and achieving better glycemic control—that’s something that you can’t put a price to.”

Last July, Abbott also began a collaboration to develop breakthrough diabetes technologies with Bigfoot Biomedical, a Milpitas, Calif.-based insulin delivery service firm that seeks to improve the lives of diabetics through the application of smart technology that leverages data, connectivity, automation, and machine learning. Under the agreement, Abbott will supply glucose measurement sensors for all of Bigfoot’s insulin delivery systems in the United States as the exclusive sensors for those systems. Bigfoot will develop and commercialize multiple systems using Abbott’s FreeStyle Libre CGM, including systems designed to perform auto-titration for Bigfoot’s connected insulin injection devices, as well as automated insulin delivery using Bigfoot’s insulin infusion platform.

$10.1 Billion ($20.9B total)
NUMBER OF EMPLOYEES: 75,000

Medical device megamergers are fast becoming an annual tradition.

Abbott Laboratories’ $25 billion purchase of St. Jude Medical Inc. was by far the most momentous medtech news of 2016—yet another continuation of almost yearly deals valued in the double-digit billions. (Although there was no mega-M&A activity in 2015, 2014 made up for that with two: Zimmer’s $14 billion Biomet purchase and Medtronic’s $50 billion deal for Covidien.) 2017 has already seen its landmark deal in Becton, Dickinson and Company’s $24 billion procurement of C.R. Bard announced in April. This string of deals will undoubtedly have the industry on tenterhooks at the beginning of each new year, as everyone awaits the latest in monumental medtech mega-purchases.

The St. Jude grab endowed Abbott with the product arsenal to compete in almost every area of the cardiovascular device market. St. Jude’s strong seat in heart failure devices, atrial fibrillation, and cardiac rhythm management heartily complements Abbott’s vascular division, which includes a healthy pipeline of coronary intervention and transcatheter mitral repair products. Abbott also inherited a completely new neuromodulation division consisting of St. Jude Medical’s variety of spinal cord stimulation, dorsal root ganglion stimulation, deep brain stimulation, and radiofrequency therapy technologies to manage chronic pain and movement disorders. Some of St. Jude’s notable products now in Abbott’s possession include:

• • The Quadra Allure and Assura line of cardiac resynchronization therapy (CRT) pacemakers and defibrillators with MultiPoint pacing

• • The EnSite Precision Cardiac Mapping System, which allows automation, flexibility, and precision for a wider range of arrhythmias

• • CardioMEMS HF System, a wireless heart failure monitor

• • The Axium dorsal root ganglion (DRG) neurostimulator system for chronic pain

“Bringing together these two great companies will create a premier medical device business and immediately advance Abbott’s strategic and competitive position,” Miles D. White, Abbott’s chairman and CEO, said in a press release detailing the acquisition. “The combined business will have a powerful pipeline ready to deliver next-generation medical technologies and offer improved efficiencies for healthcare systems around the world.”

The deal wasn’t without a few hitches, however. St. Jude faced a number of problems for Abbott to contend with during integration, including a U.S. Food and Drug Administration (FDA) investigation of claims by short-seller Muddy Waters that St. Jude’s heart devices were vulnerable to fatal cyber-attacks. These claims resulted in the combined company suing Muddy Waters and cyber research firm MedSec Holdings, with then St. Jude CEO Michael Rousseau (who now leads Abbott’s Cardiovascular and Neuromodulation division) citing misleading information to investors and patients regarding the devices’ safety. According to Abbott, St. Jude’s Cardiac Rhythm Management business—which sells pacemakers and defibrillators—also struggled toward the end of 2016 as it lost out to rival MRI-compatible devices in the United States. Further, St. Jude recalled some of its 400,000 implanted heart devices in October 2016 because of premature battery depletion, which was linked to two deaths in Europe.

The issues appeared to have been resolved fairly quickly, however, because Abbott completed the acquisition on Jan. 4, 2017, without much further ado. St. Jude became a wholly-owned subsidiary of Abbott and the company became a force to be reckoned with in the medical device arena.

However, according to Bloomberg, one question Abbott will have to answer is whether the deal extends far enough to ease pressures from hospitals seeking to cut costs and become more efficient under the Affordable Care Act (still in place, as of July).  The added scale St. Jude provided should help, but Abbott is launching itself headlong into a market that often depends on government reimbursement and is especially susceptible to healthcare policy changes. It’s the type of market White said in the past he was trying to diverge from, seeking a more consumer-facing strategy focused on emerging markets. However, White also made a decent point to Reuters that could assuage some of the tensions here—with St. Jude, Abbott can more aptly compete in an environment where hospitals prefer only two or three vendors.

Investors and shareholders will have to wait and see whether 2017’s annual performance reflects the enormous market potential St. Jude has promised for Abbott.

(Editor’s note: Because the St. Jude Medical acquisition was completed after the end of Abbott’s fiscal year 2016—ended Dec. 31—Abbott’s consolidated financial statements do not include the financial condition or operating results of St. Jude Medical. St. Jude Medical’s 2016 financial report is included in this year’s Top 30 as entry No. 16.)

This deal was so momentous that it somewhat overshadowed the troublesome $5.8 billion buy of point-of-care diagnostics firm Alere, which has been undergoing negotiations for about 18 months now, having been announced in February 2016. The purchase has been rife with troubles since the outset, to the point that Abbott attempted to exit the agreement twice during the year.

2016 touted a laundry list of troubles for Abbott to reach the agreement. Less than a month after the acquisition’s announcement, Alere informed Abbott of a delay in its 2015 annual report filing due to issues with African and Chinese revenue. In March, the U.S. Department of Justice subpoenaed Alere for documents concerning sales practices in Africa, Asia, and Latin America, and the company’s shares fell 8 percent in early trading following the news. An investigation of bribery concerns overseas came next, and Abbott attempted to terminate the deal for the first time in April and offer Alere $30 to $50 million—which Alere promptly rejected.

So the deal slogged on. The catastrophes were far from over, however—in July, Alere recalled its INRatio devices, which monitor patients taking warfarin, a blood-thinning medication. In August, Alere filed a lawsuit against Abbott, accusing the company of dragging its feet on key antitrust submissions to sabotage the deal. By December, Abbott had reached the last straw. The recall, subpoenas, and then five-month delay in Alere’s 10-K filing encouraged Abbott to file a formal complaint with the Delaware Court of Chancery seeking to terminate the proposed acquisition.

“Alere is no longer the company Abbott agreed to buy 10 months ago,” Scott Stoffel, Abbott’s divisional vice president of external communications, said in a press release. “These numerous negative developments are unprecedented and are not isolated incidents brought on by chance. We have attempted to secure details and information to assess these issues for months, and Alere has blocked every attempt. This damage to Alere’s business can only be the result of a systemic failure of internal controls, which combined with the lack of transparency, led us to filing this complaint.”

With tensions rising, Abbott and Alere went into mediations at the start of 2017 to determine the terms and potential cancellation of the merger agreement. Negotiations over the next few months resulted in Alere’s purchase price being lowered $500 million to $5.3 billion, which Alere shareholders approved in July. The transaction is expected to (finally) close by the end of the third quarter of 2017.

ANALYST INSIGHTS: After a busy year of acquisitions (St. Jude and Alere), Abbott will be focused in the coming months on synergies (savings) and core portfolio (growth) to pay for its heavy buying spree. Watch for “opportunistic” divestitures as well as “Reductions in Force” to continue to improve their balance sheet.

—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors

In order to develop a more centralized product portfolio—and perhaps make some headway on the $5.8 billion in debt assumed from St. Jude—Abbott entered into an agreement with Johnson & Johnson in September 2016 to sell its Medical Optics (AMO) vision care division for $4.3 billion. Abbott’s vision business has products in areas including cataract surgery, laser vision correction (LASIK), and corneal care products. The decision reflected Abbott’s proactive tailoring of its medical device portfolio in line with the strategic priorities of the St. Jude acquisition to establish Abbott as a cardiovascular leader. White further explained the sale in saying although AMO had historically gained share and operated profitably, he did not see the opportunity to expand the business into a broad-based leader.

“We’ve been actively and strategically shaping our portfolio, which has recently focused on developing leadership positions in cardiovascular devices and expanding diagnostics,” White said in a company press release. “Our vision care business will be well-positioned for continued success and advancement with Johnson & Johnson.”

To further adjust its product anthology and take an important step toward completing the St. Jude acquisition, in October 2016 Abbott sold a portion of its and St. Jude’s vascular closure and electrophysiology businesses to Terumo Corp. for $1.1 billion. The divestiture included St. Jude Medical’s Angio-Seal and Femoseal vascular closure products as well as Abbott’s Vado Steerable Sheath; the deal closed on Jan. 20, 2017—shortly after the close of the St. Jude acquisition. Abbott retained the remainder of its vascular closure technologies to support its formidable cardiovascular technology portfolio.

With all the hullaballoo surrounding Abbott’s Medical Devices and Diagnostics divisions, it’s easy to forget that the company also touts strong Established Pharmaceuticals and Nutrition businesses that make up about half of the company’s $20.9 billion revenue. However, the Medical Devices and Diagnostics segments make up the totality of Abbott’s medtech offerings, and amidst massive restructuring, 2016 medical device sales rose 4 percent to $10.1 billion.

Worldwide 2016 Diagnostics sales expanded 3.6 percent to $4.8 billion, just shy of a fifth of the company’s total revenue. The sales growth reflected continued penetration by the Core Laboratory business in the United States and China, as well as growth in other emerging markets, most prominently in Latin America. The Diagnostics division was vastly invigorated in 2016 with the unveiling of Alinity, Abbott’s unified family of next-generation diagnostics systems.

The Alinity line (the name of which is derived from the attributes of alignment, innovation, and unity) includes a harmonized group of systems across immunoassay, clinical chemistry, point-of-care, hematology, blood and plasma screening, and molecular diagnostics. The Alinity systems are designed with universal, intuitive interfaces and common software/hardware, run more tests in less space, achieve faster test results, and minimize human errors. The comprehensive offering mitigates the challenges of using multiple diagnostics platforms, which can lower testing efficiencies. In the final quarter of 2016, Abbott was granted CE mark clearance for the i-STAT Alinity point of care, immunoassay, clinical chemistry, and blood screening systems. The handheld blood testing platform analyzes a large menu of tests ranging from blood chemistries to cardiac markers with only two to three drops of blood. The test provides results in two to 10 minutes, and its advanced connectivity features permit testing to be conducted virtually anywhere.

“We spent countless hours doing on-the-ground research with doctors, nurses, lab directors, point-of-care coordinators, and other customers from around the world. We asked about their pain points and listened to what they want and need for testing,” Matt Bates, Abbott’s divisional vice president, research and development, Point of Care Diagnostics, said in a company press release. “Using these customer insights, Abbott designed and built i-STAT Alinity for better access, efficiency, and speed to improve clinical decision making.”

Abbott expects to obtain approval for and launch a number of devices in the Alinity family over the next few years.

Abbott’s Vascular division—which includes coronary, endovascular, structural heart, vessel closure, and other medical device products—reported 2016 sales of $2.9 billion, rising 3.7 percent from the previous year. This was primarily stimulated by double-digit expansion of the MitraClip structural heart device to treat mitral regurgitation, combined with endovascular franchise sales success. That increase was partially offset by pricing pressures on Abbott’s drug-eluting stents (DES), and a lower market share for the Xience DES franchise in some regions. However, the Vascular segment saw Abbott’s (and perhaps the medtech industry’s) most noteworthy product release of the year—the Absorb bioresorbable stent.

July’s FDA approval of the Absorb GT1 Bioresorbable Vascular Scaffold (BVS) system marked the first ever fully dissolving stent approved to treat coronary artery disease. Stents have traditionally been made of metal, but the Absorb stent is composed of a naturally resorbing material similar to that of dissolving sutures. Except for two pairs of tiny metallic markers remaining in the artery to indicate to physicians where it was placed, Absorb disappears completely in about three years after doing its job of leaving a clogged artery open and bolstering the treated artery section’s healing process. It is a direct contrast to permanent metal stents, which restrict vessel motion for the patient’s entire life.

“The Absorb bioresorbable scaffold represents a major advance in the treatment of coronary artery disease,” Gregg W. Stone, M.D., FACC, FSCAI, director, cardiovascular research and education, Center for Interventional Vascular Therapy, Columbia University Medical Center, New York-Presbyterian Hospital and chairman of the Absorb clinical trial program, said in a company press release. “This technology appeals to both physicians and patients alike because after treating the underlying blockage it is completely absorbed, leaving nothing behind. No metal means the treated artery can pulse and flex naturally as demands on the heart change with everyday activities. No metal may also reduce the potential of future blockages that occur with permanent metallic stents, and allows easier access to other treatment options should they prove necessary in the patient’s future.”

However, highly anticipated research presented at the Transcatheter Cardiovascular Therapeutics (TCT) conference in October 2016 revealed some rather underwhelming evidence for those hoping it would outperform metal stents.

The two studies comparing Absorb to Abbott’s metallic stent Xience V demonstrated that it didn’t work much better than the Xience model. After two years, Absorb’s rates of clinical events, cardiac death, and device thrombosis (which Absorb was attempting to minimize) were comparable to Xience. Much of the reason Absorb BVS didn’t outperform Xience in the trials can be attributed to physicians not implanting Absorb stents properly, said Charles Simonton, M.D., chief medical officer at Abbott, in an interview with the news website Cardiovascular Business.

“What we learned in two or three years is that the key to really good outcomes with Absorb is getting a really good final expansion of the scaffold or the stent itself,” Simonton told Cardiovascular Business. “The patients in the trial were enrolled about two years before we actually discovered how to properly implant Absorb. So we weren’t surprised that the results were not up to par. The results now, what they reflect, is what you can get if you implant the device the way we did it back then, which is not the way we’re doing it now. Next year you’ll see some of the other Absorb data coming out and that hopefully will help clarify some of this.”

Further adding to the company’s structural heart offerings, MitraClip NT, Abbott’s latest in the line of MitraClip transcatheter mitral valve repair devices, was launched in the United States in 2016.

Abbott’s remaining segments, the Diabetes Care and recently divested Medical Optics businesses, are classified as non-reportable and therefore are not broken down any further. In 2016, these businesses contributed $2.4 billion in revenue, a 5 percent increase over the year prior.

The FDA approved the Tecnis Symfony intraocular (IOL) lenses in July. They are the only lenses in the United States that simultaneously allow a full range of continuous, high-quality vision post-cataract surgery and mitigate the effects of presbyopia by helping to focus on nearby objects. The FDA approval also included a version of the lens for astigmatism, the Tecnis Symfony Toric IOL. The Tecnis IOL—along with the rest of Abbott’s Medical Optics products—is now in the possession of Johnson & Johnson.

In September, Abbott gained FDA approval for the FreeStyle Libre Pro system, a continuous glucose monitoring (CGM) system intended for a clear, visual snapshot of glucose levels, trends, and patterns for up to two weeks. The sensor does not need fingersticks for calibration, but rather measures glucose in insterstitial fluid through a tiny filament (5.0 x 0.4 mm) inserted subcutaneously. Glucose levels are recorded every 15 minutes, resulting in 1,340 glucose results over two weeks that provides a complete glycemic patient profile. The two weeks’ worth of data stored in the sensor can be downloaded by a healthcare professional in as little as five seconds.

“Abbott has been an enduring company because we’ve never hesitated to be an evolutionary company,” White said in the closing of his letter to Abbott’s shareholders in the company’s annual report. “Changing times require changing practices. What remains unchanged is our commitment to bringing people the health innovations they need to live their best possible lives. To that end, we have again reshaped our company. Today’s Abbott is built to deliver more and better healthcare solutions, to improve more lives around the world, and to strengthen our competitiveness and accelerate our growth. That’s what a leading healthcare company does. And it’s what we’ll keep doing here at Abbott.”

$9.7 Billion (20.4B total)
NUMBER OF EMPLOYEES: 74,000

About 108 million blood donations are collected each year. That sounds like a fairly significant number, right? Prepare to be humbled; about 234 million major operations requiring blood transfusions or treatments occur annually, meaning there’s a continuous need for donations. Unfortunately, many people don’t consider the need until it becomes critical.

“We can all make a difference by donating blood. Each donation can benefit up to three people in emergency situations and for long-term medical treatments,” said Cristiano Ronaldo, forward for Real Madrid and captain for Portugal National Football. “That’s why I am enthusiastic to be partnering with Abbott to bring awareness to the importance of blood donation and to encourage people around the world to become lifelong blood donors and help save lives.” Since giving to a teammate’s sickly son, the soccer star donates blood regularly, and goes so far as to avoid any activities that would prevent him from donating—even if only temporarily.

Why bring this up? In October 2015, Ronaldo partnered with Abbott to raise public awareness of this important cause, as the first global ambassador for the BE THE 1 movement (also known as #BeThe1Donor). While it’s true that Abbott has a financial stake in a campaign like this—according to the company, over half of the world’s blood supply is screened with Abbott testing instruments—its Global Surveillance Program works to safeguard the world’s blood supply. The company’s screening process continually identifies new viruses and diseases, including newly emerging HIV and Hepatitis B and C strains.

Financial Landscape

Abbott’s business is split into four segments: Pharmaceuticals, Nutritionals, Diagnostics, and Vascular. As a whole, the company reported net sales of $20.4 billion in 2015 (year ended Dec. 31), representing a less than 1 percent increase over 2014. Abbott’s medical device businesses are divided into four segments: Diagnostics, Vascular, Diabetes Care, and Medical Optics. The latter two make up less than 10 percent of the company’s revenues or assets, and are therefore deemed non-reportable. Abbott’s medical device segment achieved revenue of $9.71 billion in 2015. Despite the slight increase in overall net sales, due primarily to a significant 19.3 percent increase in revenue in the company’s Established Pharmaceuticals division, this demonstrated a 4.6 percent deficit from 2014.

Abbott’s Diagnostics segment, including its Core Laboratories Diagnostics, Molecular Diagnostics, Point of Care, and Ibis diagnostic divisions, brought in $4.6 billion in revenue, a 1.6 percent decrease over the previous year. The Vascular Products division, which includes the company’s Vascular and Electrophysiology products, reported net sales of $2.8 billion, a 6.5 percent decrease from 2014. Abbott’s Diabetes Care and Medical Optics divisions reported revenue of $2.3 billion (bringing in about $1.1 billion apiece), which represented a 7.9 percent deficit from the previous year.

In 2015, Abbott’s domestic revenue of $6.3 billion accounted for 30.7 percent of the company’s total sales, a slight increase over 2014. U.S. sales in general rose 2 percent over the previous year. Continuing the trend from 2013 and 2014, the Chinese market continued to demonstrate Abbott’s largest market growth opportunity.

Chinese net sales of $1.8 billion represented 8.8 percent of the company’s total revenue—a fairly significant increase over 2014’s 6.5 percent of total sales. The Chinese market’s revenue as a whole displayed a whopping 35.9 percent increase over 2014, topping the (no less) significant increase of 22 percent experienced in 2014 over the year prior. Conversely, global sales in Japan continues to show a deficit that has not ceased since 2013. Japan’s $895 million revenue represented a 7.5 percent decrease from 2014, a slightly bigger loss than the year prior’s 7 percent deficit. Across other global markets of note in 2015, Switzerland saw 10.9 percent growth from the previous year, the Netherlands saw 8.5 percent, and India saw 4.4 percent. Brazilian revenue displayed the most marked decline in 2015, shrinking 25 percent from 2014.

Products of Note

According to a study published in Lancet in 2014, India ranks third in terms of the highest number of obese people, just behind the United States and China. Combined with nutrition, lifestyle, and demographic transitions unique to the country, this also means a rise in diabetes—a 2015 International Diabetes Federation survey determined that India’s diabetic population was 65.1 million.

To help combat this, in April 2015 Abbott launched its FreeStyle Libre Pro Flash Glucose Monitoring System in India. Unfortunately, self-monitoring of blood glucose is not common practice for Indian people. “There is an immense need for people in India to better manage their diabetes, enabling them to live healthier lives,” said Robert Ford, Abbott’s senior vice president of Diabetes Care. Abbott’s FreeStyle Libre Pro System is designed to empower doctors in India to help their patients through rich data and actionable insights. The sensor—slightly larger than a quarter—continuously measures glucose every 15 minutes in interstitial fluid over two weeks, by way of a small filament inserted subcutaneously. This provides a complete glycemic profile that doctors can interpret to determine treatment.

Also launched in April 2015 (this time in the United States) and adding to Abbott’s Diabetes Care portfolio was the FreeStyle Precision Neo Blood Glucose Monitoring System. In addition to a very slim design, small sample size, five-second test time, and memory capability of more than 1,000 readings, FreeStyle Precision Neo was made available over-the-counter, removing the need for insurance paperwork and copays. “Today, consumers have more influence on their healthcare decisions, and Abbott is focused on offering products that provide the highest standard of accuracy, and are also affordable and easily accessible over the counter,” Ford said in a company press release.

The Medical Optics division was no less fruitful. In January 2015 the company announced U.S. Food and Drug Administration (FDA) approval and launch of two TECNIS multifocal intraocular lenses (IOLs) for patients with cataracts. As opposed to traditional monofocal IOLs, which restore distance vision, multifocal IOLs allow clear vision at multiple distances. The +3.25D IOL is meant for those who enjoy longer reading distances, such as a hand-held tablet. The +2.75 IOL is suited for those who favor activities requiring intermediate vision, like reading labels while shopping. In July 2015, the FDA approved and Abbott subsequently launched its iDesign Advanced WaveScan Studio System. Featuring the sensor technology also used in NASA’s James Webb space telescope, the system operates as the “brain” of Abbott’s LASIK procedure. High-definition scans measure and map eye irregularities that might impact vision, creating a personalized treatment plan based on the eye’s unique “blueprint.”

In April 2015, the FDA cleared the company’s i-STAT Total β-hCG blood test, designed for use with the i-STAT handheld blood analyzer. The blood test is meant to replace traditional urine pregnancy tests, which is critical for women in emergency situations. “During a medical emergency, every minute matters,” said Scott Pennington, RN, BSN, director of Critical Care Services at Gulf Coast Regional Medical Center in Panama City, Florida. “A fast blood test to help determine if a woman is pregnant can help doctors and nurses quickly decide appropriate care, which could potentially save lives.”

In May, the company also received CE mark approval for the latest advancement of its Absorb stent system, the Absorb GT1. It combines the world’s first fully dissolving stent with the GlideTrack catheter, intended to ease doctors’ access and treatment of diseased vessels in coronary artery disease patients.

Calm Acquisition Waters Begin to Churn

Following the late 2014 acquisition of Topera, Abbott’s deals in fiscal year 2015 were remarkably few. The only real purchase of note was the $250 million Tendyne Holdings buy, completed in September. The acquisition of the private company aimed to broaden Abbott’s minimally invasive mitral valve replacement options, building on Tendyne’s existing Bioprosthetic Mitral Valve System.

“That we did no major new deals in 2015 in no way suggests that we are not as strategically attuned and ambitious as ever,” Chairman and CEO Miles D. White said in the company’s annual report (the chief executive was included in Barron’s annual list of 30 World’s Best CEOs for the eighth consecutive year, a feat shared with only six other CEOs). “We fully intend to continue building the company through focused, enhancing acquisitions, as we have continually over the past 17 years.” At the time, it became clear that White was referring to the company’s agreement to purchase point-of-care diagnostics giant Alere for $5.8 billion in January 2016.

But anyone paying attention to recent news has figured out that White may have been referring to something much more in his letter. Though the announcement of Abbott’s $25 billion purchase of St. Jude Medical didn’t occur until the end of April 2016, one has to wonder how much was already in the works in late 2015. Was White teasing the public about the impending and momentous buy, the largest medical device acquisition since Medtronic bought Covidien for $42.9 billion in January 2015? Or was he simply reiterating past growth strategy? Only White can answer that question.

$10.1 Billion
NO. OF EMPLOYEES: 69,000 (total)

2012, a year of separation. 2013, a year of establishing the template. 2014, realization.

Abbott Laboratories CEO Miles D. White paints the picture of an epic journey, one that flowered in FY14 with very positive results. Three years ago in 2012, Abbott split into two separate, publicly traded companies. The spinoff firm AbbVie Inc. took all of the big-name drugs, including Tricor, Niaspan and Humira. The following year thus became the re-establishment year as Abbott found a new way forward. Happily, FY14 was a success by any measure, giving Abbott much to celebrate.

Abbott’s medical devices fall into four categories: Diagnostic Products, Vascular Products, Diabetes Care and Medical Optics. Because the latter two segments make up less than 10 percent of the company’s revenues or assets, they count as non-reportable (further information about products released under these umbrellas can be found on page 72). Diagnostic Products brought in $4.7 billion in revenues, a 3.9 percent increase over the previous year; and Vascular Products brought in $3 billion in revenues, a slight (less than 1 percent) decrease over FY13. Overall, Abbott’s $10.11 in medical product revenue was an increase over the previous year, which brought in $10.01 billion.

About half of Abbott’s sales now are in faster-growing geographies outside the United States. In 2014, the company added a new vaccine facility in the Netherlands, nutrition plants in China, India and the United States, and is adding a new optics facility in Malaysia to meet growing demand in those regions. Global sales were well up in China at 22 percent growth, in India at 9.4 percent growth and Brazil at 8 percent growth. Japan saw a dip of 7 percent, a decrease for the second year in a row, demonstrating that Abbott’s better growth areas are in developing markets. Sales in Spain, France Italy, the United Kingdom and Germany enjoyed an increase in 2014 as well, while Switzerland showed a decrease due to an anomalous spike in sales in 2013.

Abbott completed patient enrollment in clinical trials for the Absorb bioresorbable vascular scaffold to support regulatory approvals in the United States, Japan and China, which will hopefully aid in bolstering the Japan market in the near future, should a regulatory approval emerge.

In September 2014, Abbott’s board of directors approved a new share repurchase program and declared a quarterly common dividend. The board authorized the repurchase of up to $3 billion of the corporation’s common shares. This new authorization is in addition to the $511 million unused portion of the previous program that was announced in June 2013.

Leading By Example

With a balanced portfolio of medical device, diagnostics, pharmaceutical and nutrition products, Abbott is already a force to be reckoned with in each of the markets in which it competes. The balance, along with diversified offerings, means the company is not overly dependent on any one product or even division to carry the load. In the 2014 annual report, White preaches the message of field-leadership boldly, noting that Abbott’s goal is “to lead—both scientifically and commercially—in the markets in which [it] competes.”

“Well-balanced diversity is the foundation of Abbott’s strategy and success,” White noted. “Our four major businesses are of roughly equal size, and that balance extends across geographies and our mix of payers. We constantly shape our portfolio to ensure that we’re in the right markets and that our success isn’t over-reliant on any single therapy, technology, or country.”

Standout product releases in 2014 included the new Diabetes Care glucose-monitoring technology, Freestyle Libre, in Europe. According to Abbott, this product solves one of the biggest problems diabetic patients face: having to stick their fingers repeatedly to draw blood for testing. Libre allows the user to read the data wirelessly by simply passing an electronic reader over a disposable sensor worn on the body. The system consists of a small, round sensor—approximately the size of a two Euro coin—worn on the back of the upper arm, which measures glucose every minute in interstitial fluid through a small (5 mm long, 0.4 mm wide) filament that is inserted just under the skin and held in place with a small adhesive pad. A reader is scanned over the sensor to get a glucose result painlessly in less than one second. Scanning can take place while the sensor is under clothing, making testing more discreet and convenient. Each scan displays a real-time glucose result, a historical trend and the direction the glucose is heading. The reader holds up to 90 days of data, providing a historical snapshot of glucose levels over time.

Another notable release was the Iridica molecular-testing platform approved in Europe to more quickly diagnose serious infections, such as sepsis. Iridica uses a combination of sophisticated testing technologies known as polymerase chain reaction/electrospray ionization mass spectrometry to rapidly identify infection-causing pathogens directly from a patient’s sample, without the need for culture. According to the results of an Abbott study, “Rapid Diagnosis of Infections in the Critically Ill” (RADICAL), the company’s new technology was able to detect pathogens when the current standard of care did not. This platform was released under the umbrella of Abbott’s Diagnostics business, which Abbott is directing special attention to, beefing up its full range of existing diagnostic platforms, both systems and tests. Abbott highlighted these two technologies as breakthrough innovations on par with the company’s goal to lead in the markets in which it participates. For more product releases in 2014, see the included sidebar.

Acquisitions

Fiscal 2014 saw several important additions to the Abbott Labs fold, an important growth strategy in the wake of the big split of 2012. The company acquired two pharmaceutical companies, both of which are in developing markets: CFR Pharmaceuticals based in Santiago, Chile, but with a broad presence in 15 Latin American countries; and Veropharm, a Russian pharmaceuticals manufacturer based in Moscow.

Just under the wire for FY14, Abbott made a medical device company acquisition in December. The company bought San Diego, Calif.-based Topera Inc. for $250 million in cash upfront, plus potential future payments of up to $300 million to be made upon completion of certain regulatory and sales milestones.

Soon after its founding in 2010, Topera managed to earn 510(k) FDA clearance for its 3-D mapping and analysis system Rhythmview in 2012. This rotor identification system helps physicians identify and target patient-specific rotors (spiral electrical waves that sustain atrial fibrillation and other cardiac arrhythmias) that have been shown to be the sustaining mechanism for atrial fibrillation. The ability to locate these rotors enables the physician to individualize patient treatment through a procedure referred to as Focal Impulse and Rotor Mapping guided ablation, or FIRM-guided ablation. Topera’s rotor identification system has been shown, when used with existing catheter ablation therapy, to result in positive long-term success rates, even in difficult-to-treat cases. Catheter-based electrophysiology is an approximately $3 billion global market that has been growing annually at double-digit rates.

“The Topera acquisition gives Abbott a foundational entry in the large, high-growth electrophysiology market with breakthrough technologies that can transform how physicians treat people with complex heart rhythm disorders,” said John M. Capek, Ph.D., executive vice president of Medical Devices, Abbott. “The ability to more accurately target the areas of the heart perpetuating atrial fibrillation is a significant advancement in the field of electrophysiology and can transform patient care.”

Unfortunately, Abbot also has had to make cost-saving cuts to maintain its financial health. Just after the Veropharm deal was announced, the company cut an undisclosed number of employees from its Diagnostics division at its headquarter facilities in Abbott Park outside Chicago. An Abbott spokesperson told the Chicago Tribune that the layoffs were an attempt to reduce expenses. In the first quarter of 2014, Abbott incurred $194 million in charges associated primarily to “cost reduction initiatives,” according to financial statements. January of the same year also saw an unspecified number of layoffs. This was the third year in a row Abbott has made cuts to its workforce.

$10.01 Billion (21.8 B total)
NO. OF EMPLOYEES: 32,500

“Failure isn’t fatal, but failing to change might be.”
— John Wooden, former UCLA basketball coach

Reinvention has long been a powerful business strategy. In 1889, young entrepreneur Fusajiro Yamauchi opened a small shop called Nintendo Koppai to sell traditional Japanese playing cards (hanafuda) crafted from mulberry tree bark. It was a bold gamble at the time: Card-playing had recently been legalized after a 256-year ban, and Yamauchi’s compatriots had not yet warmed up to the game.

Nevertheless, Yamauchi’s hand-made cards soon caught on, prompting him to open a second shop in Osaka and create additional games. He retired at age 70 in 1929, leaving his business in the hands of his descendants.

At which point, it was reborn.

During the 1950s, Yamauchi’s grandson Hiroshi visited the United States and secured the rights to print Disney characters on the company’s playing cards. A decade later, he delved into other areas, creating a taxi company, a hotel chain, an instant rice company and a television network. None of those ideas panned out.

But Hiroshi was not easily discouraged. And eventually he hit paydirt.

In the 1970s, Hiroshi began dabbling in electronic family entertainment and hired a young student named Shigeru Miyamoto to help him develop new gaming products. Miyamoto’s ideas—Super Mario Bros., Donkey Kong, and the Legend of Zelda—made Hiroshi a multi-millionaire and his company (Nintendo) one of the most successful in Japan.

“From handmade nineteenth-century playing cards to the twenty-first century Wii may seem like a leap of light years, and it is, in terms of the outer form of the products,” technology forecaster/business strategist Daniel Burrus (founder/CEO of Burrus Research) and author/entrepreneur John David Mann wrote in a paper titled “The Reinvention Imperative.” “But the genius of Nintendo’s success is that Yamauchi and Shigeru found a way to completely reinvent the company yet remain unerringly true to its core: Nintendo = games based on memorable characters.”

Countless numbers of companies have followed in Nintendo’s footsteps and reinvented themselves to stay relevant in the market: Chrysler, led by iconic entrepreneur Lee Iacocca, gained popularity with drivers by reinventing the family station wagon in 1983; likewise, Walmart founder Sam Walton gave the old-fashioned General Store concept a much-needed makeover; Xerox escaped the photocopy typecast by inventing the Ethernet and branching out into mass-transit ticketing systems and e-discovery solutions; and Apple owes its longevity to its reinvention of the cell phone and portable music player.

Abbott Laboratories has stayed relevant through reinvention as well. Ten years ago, the multinational firm reincarnated itself as a formidable pharmaceutical and medical device developer through the spinoff of its slow-growing hospital business (happy birthday, Hospira). Last year, the company remade itself again, this time splitting itself into two publicly traded entities—one in diversified medical products and the other in research-based pharmaceuticals.

The new firm, AbbVie Inc., oversees all big-name drugs, including Tricor, Niaspan and Humira, the blockbuster anti-inflammatory drug whose patent expires in the United States in late 2016 and in Europe the following year. It is being led by longtime Abbott executive Richard Gonzalez and employs about 21,000 people.

The legacy Abbott company, meanwhile, retains the name, its chairman/CEO (Miles D. White) and a diverse offering of healthcare products, ranging from coronary stents and sophisticated laboratory testing equipment to infant formula.

“In a shifting environment, consistent business performance is not enough to perpetuate itself. To keep their organizations relevant, CEOs and other leaders must heed the reinvention imperative,” White wrote in a November 2013 article for the Harvard Business Review. “That has happened at such long-term leaders as IBM, Xerox and Samsung. Just 10 years ago Samsung was known only for consumer electronics; today it spans advanced technology, construction, petrochemicals, fashion, medicine, finance, and hotels. This kind of reinvention has been our goal at Abbott. Fifteen years ago we recognized a need to change; since then adaptation has been at the heart of our strategy. As a result, our revenue has more than tripled, and we have delivered industry-leading earnings growth and shareholder returns.”

Such growth continued last year as net earnings from continuing operations more than quadrupled, going from $2.38 billion or $1.50 per share, from $579 million or 36 cents per share in 2012. The company also grew operating earnings 38.8 percent to $2.6 billion, and increased its operating margin by 320 basis points compared with 2012, according to data from Abbott’s 2013 annual report.

Ongoing earnings also were up, expanding 15 percent in 2013 to $3.2 billion or $2.01 per share (excluding specified items), compared with $2.77 billion or $1.74 per share in 2012. The earnings met analysts’ expectations for the year ended Dec. 31, 2013.
Emerging market sales jumped 11 percent, mainly driven by solid growth in Abbott’s Diagnostics, Medical Devices and Nutritionals businesses. The company garnered particularly impressive returns in China, Switzerland (an obvious anomaly) and Russia last year—sales ballooned 26 percent, 14.2 percent and 8.2 percent, respectively—but those gains predictably were offset by staggering losses in developed markets. Proceeds in Japan, for example, fell 16.3 percent to $1.4 billion, while The Netherlands’ revenue was down 13.2 percent at $960 million. Earnings also slipped 2.5 percent in Canada and 3.6 percent in the United Kingdom.

Compounding those losses was a whopping 56.8 percent drop in reported net earnings ($2.6 billion or $1.62 per share, down from $5.96 billion, or $3.72 per share in 2012) as well as foreign exchange rate volatility. Abbott also was blindsided by a third-quarter supplier recall that negatively impacted international nutrition sales by two percentage points.

In early August, Abbott Nutrition Vietnam recalled batches of Similac Gain Plus Eye–Q for infants aged 1-3 over suspicions the formula contained a germ that causes muscle paralysis. The company recalled 10,135 out of 12,927 boxes of the canned Similac on the Vietnamese market.

Despite the setbacks, Abbott managed to boost its total revenues 1.6 percent to $21.8 billion and its Medical Device sales 2.1 percent to $10 billion. White linked the sales gains to the company’s operating margin expansion and “selective cost management.”

“For the full-year 2013, we delivered solid growth…” White said in his annual letter to investors. “We returned nearly $2.5 billion to shareholders in the form of dividends and share repurchases, and announced a 57 percent increase in our dividend beginning this year [2014]. Strong performances across many of our businesses, combined with gross and operating margin expansion, enabled us to deliver on our 2013 expectations despite some challenges.”

Operating margins were best in the company’s Diagnostics and Nutritional businesses, its top-performing units in 2013.
Diagnostics bolstered its operating margin by 300 basis points and increased revenues 5.9 percent (8.3 percent excluding foreign exchange rates) to $4.5 billion. Executives attributed the growth to the multinational launch of automated in-vitro diagnostic assays for Flu A/B/RSV, C.difficle, and VanR as well as the U.S. Food and Drug Administration (FDA) approval of the Abbott RealTime HCV Genotype II, a test that identifies the genotype of hepatitis C virus (HCV) that a patient carries. The RealTime HCV test can differentiate genotypes 1, 1a, 1b, 2, 3, 4, and 5, using a sample of an infected patient’s blood plasma or serum, according to the company. FDA officials okayed the RealTime HCV Genotype II only for people who are chronically infected with HCV.

Abbott’s Nutritional business also expanded its operating margin by nearly 300 basis points, but could not match the Diagnostics unit performance. Nutritional product sales swelled 4.3 percent (5.4 percent excluding foreign currency exchange rates) to $6.7 billion as the company’s offerings gained favor with aging populations, patients with chronic diseases and newfound middle-class consumers in emerging markets. Manufacturing/distribution process changes also contributed to the rise in Nutritional operating margins from 13.2 percent in 2011 to 18.7 percent in 2013.

Abbott made two important acquisitions to augment its offerings in the Vascular and Medical Optics segments and improve their overall performance. In the Vascular segment it acquired Webster, Texas-based stent manufacturing firm IDEV Technologies Inc. for $310 million net of cash and debt. IDEV’s flagship stent, Supera Veritas, already sells in Europe for treating blockages in blood vessels due to peripheral artery disease, a sickness that ails 27 million people in Europe and North America. It also is under FDA review for superficial femoral artery treatment in the United States.

The purchase, though, failed to jump-start Vascular unit sales. Revenues fell 1.9 percent to $3 billion despite continued share gains of the Xience Xpedition drug-eluting stent (achieved mostly through the Japanese debut of the Xience Prime small vessel stent) and Absorb (Abbott’s drug-eluting coronary bioresorbable vascular scaffold); higher sales of the MitraClip, a device to treat mitral regurgitation; and a 5.1 percent surge in endovascular sales.

In the Medical Optics business, Abbott acquired OptiMedica Corporation for about $250 million net of cash. OptiMedica’s flagship product, Catalys, allows surgeons to replace manual steps in cataract surgery with computer-guided laser technology, and gives Abbott an entry point in the expansive and fast-growing laser cataract surgery market.

The investment paid off, too: Medical Optics sales climbed 4.1 percent last year to $1.1 billion, data from the annual report show. The segment’s other revenue drivers included the U.S., Chinese and Japanese approval of the Tecnis Toric monofocal intraocular (IOC) lens and the regulatory blessing of a preloaded version of the Tecnis 1-Piece multifocal IOC in Canada, India and the United States. A pre-loaded version of the Tecnis 1-Piece IOC was approved in Canada, Europe and Japan, and the iDesign advanced vision diagnostic and LASIK treatment planning system—okayed in Europe in 2012—was inducted in Canada and various Latin American and Asian markets in 2013.

The Tecnis Toric IOC combines the optical qualities of the Tecnis design with astigmatism correction. The Tenis Toric lens remains stable once inserted into the eye and minimizes imprecise light focusing (spherical aberration) to provide sharper distance vision for patients.

Diabetes care revenue slipped 1.5 percent to $1.3 billion in spite of several new product releases. In the third quarter, Abbott received CE Mark approval in Europe for the FreeStyle Precision Neo monitoring system, a new icon-driven system with visual glucose trend indicators and insulin logging. The system is designed to be used with FreeStyle Optium blood glucose and ketone test strips, which currently are available in Europe. In the second half of 2013, the company received both CE Mark and FDA approval for Precision Pro, a hospital glucose monitoring system that improves accuracy and dual-band wireless access to immediate test results.

“The FreeStyle Precision Pro system represents a significant step forward as we work to provide tools to improve the way hospitals manage patients’ glucose levels,” said Heather L. Mason, senior vice president of Diabetes Care at Abbott. “It makes the data available in real time, thanks to the meter’s new wireless capabilities. With its individually foil-wrapped test strips, the system is also designed to help reduce test strip cross-contamination in hospital environments.”

7. Abbott Laboratories
$9.9 Billion ($39B total)

KEY EXECUTIVES:
Miles D. White, Chairman & CEO
Thomas C. Freyman, Exec. VP of Finance & Chief Financial Officer
John M. Capek, Ph.D., Exec. VP, Medical Devices
Edward L. Michael, Exec. VP, Diagnostic Products
Robert B. Hance, Sr. VP, Vascular
Heather L. Mason, Sr. VP, Diabetes Care
James V. Mazzo, Sr. VP, Medical Optics
Brian J. Blaser, Sr. VP, Diagnostics
Corlis D. Murray, Sr. VP, Quality Assurance, Regulatory & Engineering Services

NO. OF EMPLOYEES: 90,000 (total)

GLOBAL HEADQUARTERS: Abbott Park, Ill.

This is the last year that Abbott Laboratories will be on the MPO Top 30 list in its current form. The big news announced by the company toward the end of the 2011 fiscal year (ended Dec. 31) was that it was splitting into two publicly traded companies, separating its medical products business from its research-based pharmaceuticals operations.

The medical products company will consist of Abbott’s generic pharmaceutical, devices, diagnostic and nutritional businesses, and will keep the Abbott name. The research-based pharmaceutical firm, on the other hand, will include proprietary pharmaceuticals as well as biologics, and will be rebranded. The announcement came in October.

The medical products business generates about $22 billion in annual revenue, according to Abbott estimates. The portfolio for this newly-formed company will comprise branded generic drugs sold outside the United States, adult and pediatric nutritional products, core laboratory diagnostics, point-of-care and molecular diagnostics, vascular devices (including the top-selling Xience heart stent), vision care products and medical systems that diagnose and treat diabetes. Executives expect the company to generate nearly 40 percent of its sales in “high-growth emerging markets.”

The research-based pharmaceutical company, by contrast, will focus on various specialty drugs in such areas as immunology, multiple sclerosis, chronic kidney disease, Hepatitis C, oncology and women’s health.

Current Abbott Chairman and CEO Miles D. White will remain chairman and CEO of the medical products company, while Richard A. Gonzalez, currently Abbott’s executive vice president of Global Pharmaceuticals, will become chairman and CEO of the research-based pharmaceuticals business. Gonzalez is a 30-year Abbott veteran who previously served as president and chief operating officer of the Abbott Park, Ill.-based healthcare conglomerate.

The split should completed by the end of this year. The company has posted declining profits in recent quarters due to restructuring and acquisition charges, though lately it has generated stronger revenue. Abbott’s diverse portfolio has shielded the company from some of the common problems plaguing other drug manufacturers, such as patent expirations and competition from generic-brand pharmaceuticals.

Splitting the company into two separate businesses could help raise share value and sales, analysts predict. With Johnson & Johnson’s exit from the stent market earlier this year, Leerink Swann LLC analyst Rick Wise told Medical Product Outsourcing that Abbott could very well increase Xience stent sales, which in turn, should offset lower pricing for the product.

“[The split] is good news,” Jan David Wald, an analyst at Morgan Keegan & Co. in Boston, Mass., told Bloomberg Businessweek at the time the move was announced. “You’ll start to see more people interested in the stock, which has languished for years. The two companies each will be more valuable than they are together.”

For the company as a whole, FY11 posted solid financial results across its lines of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. Total sales were $38.9 billion, an increase of 10.5 percent. Net earnings were $4.7 billion, compared with $4.6 billion in fiscal 2010. In device-specific segments, the news was equally positive. Core Laboratory Diagnostics sales were nearly $3.4 billion, an operational increase of 4.1 percent (7.9 percent reported).

Molecular Diagnostics division products created $442 million in sales, up on an operational and reported basis—12.4 and 14.7, respectively. Total revenue for the Point-of-Care Diagnostics business was $301 million, an increase of 9.5 percent operationally (10.4 percent reported). Gains for the Vascular division were a little more modest in FY11, yielding $3.3 billion, a slight increase of 1.2 percent operationally (up 4.4 percent on a reported basis). Diabetes Care products were steady earners—nearly $1.4 billion, up 3.8 percent on an operational basis (7 percent, reported). Gains for the Medical Optics unit were $1.1 billion, a slight increase of 0.7 percent operationally (4.6 percent, reported).

“Despite another challenging year for the global economy, Abbott again delivered leading performance, including strong sales and ongoing earnings-per-share growth,” White said. “2011 was a significant year for Abbott, with the announced plan to separate into two leading health care companies in research-based pharmaceuticals and diversified medical products, each offering shareholders distinct identities with unique investment opportunities. We remain on track to complete the separation by the end of 2012.”

Notably, the 2011 fiscal year certainly was a year of regulatory wins for Abbott’s vascular division. In January, the company kicked off the year with CE Mark of its Absorb drug-eluting bioresorbable vascular scaffold (BVS) for the treatment of coronary artery disease, which the company claims is a market first. Abbott’s BVS device restores blood flow by opening a clogged vessel and providing support to the vessel until the device dissolves within approximately two years, leaving patients with a treated vessel free of a permanent metallic implant. Full commercial launch took place throughout this year. In the United States, Absorb currently is investigational and is not available for sale.

“The CE Mark approval for Absorb in Europe is a significant accomplishment that validates the impressive clinical results that have been observed with this device,” said Patrick W. Serruys, M.D., Ph.D., professor of interventional cardiology at the Thoraxcentre, Erasmus University Hospital, Rotterdam, the Netherlands.

The stent is made of polylactide, a proven biocompatible material that commonly is used in medical implants such as resorbable sutures. Since a permanent metallic implant is not left behind, a patient’s vessel treated with the stent ultimately may have the ability to move, flex and pulsate similar to an untreated vessel. Restoration of naturally occurring vessel functions is significant in the treatment of coronary artery disease. Continuing research also indicates that long-term dual anti-platelet therapy may be reduced because the temporary scaffold is completely resorbed.

CE Mark approval for Absorb in Europe was supported by data from clinical trials that included patient follow-up out to three years. Following approval, the company initiated a randomized, controlled clinical trial in Europe and New Zealand enrolling approximately 500 patients at 40 centers to compare Absorb to its own Xience Prime drug-eluting stent. The trial will provide additional data to support European commercialization and reimbursement activities.

In May, the U.S. Food and Drug Administration (FDA) approved an expanded use of the RX Acculink carotid stent system for patients with carotid artery disease who are at standard risk of adverse events from carotid endarterectomy (standard of care surgery). The system previously was indicated for patients at high risk of adverse events from surgery.

Patients with carotid artery disease have three treatment options: carotid artery stenting, carotid surgery (known as carotid endarterectomy) or medical therapy. The traditional surgical treatment for carotid artery disease usually requires general anesthesia and involves an incision in the patient’s neck and artery to remove plaque from inside the vessel wall. In contrast, during a stenting procedure, an embolic protection system is positioned in the carotid artery and a stent is deployed using a catheter inserted into a small puncture in the patient’s groin. The patient usually remains conscious while the stent is implanted at the site of the blockage. The embolic protection system is designed to capture particles of plaque that might be dislodged during the procedure, which potentially could lead to stroke.

Abbott also began the process to obtain Medicare coverage for carotid stenting based on the clinical trial results that were the basis for FDA approval. In addition, a post-approval study was initiated to track clinical outcomes at 30 days and annually for three years.

Stroke is the third leading cause of death in the United States and the leading cause of disability in adults, according to the American Heart Association. An ischemic stroke, the most common type, can occur when the carotid artery becomes narrowed and small particles of atherosclerotic plaque become dislodged from the diseased carotid artery wall. This embolic material can travel through the bloodstream and block blood vessels in the brain. More than 795,000 Americans will have new (610,000) or recurrent (185,000) strokes each year. On average, every four minutes someone in the United States dies of stroke. Carotid artery disease is the leading cause of stroke in the United States, with more than 60 percent of all stroke occurrences linked to carotid artery disease. The carotid arteries supply oxygen and blood to the parts of the brain where thinking, speech, personality, and sensory and motor functions reside.

In May, the company received FDA approval for the Xience Nano drug-eluting stent for treating coronary artery disease in small vessels. The Nano, which is based on the same platform as the Xience V everolimus-eluting coronary stent provides a new option for treating vessels as small as 2.25 mm in diameter. Small vessels often are associated with increased levels of restenosis, or tissue re-growth, following a stent implantation. The Xience nano features thin struts measuring 0.0032 inches.

“The treatment of small vessels is often complex and associated with higher rates of complications compared to larger vessels,” said Marco Costa, M.D., Ph.D., professor of medicine, director of the Interventional Cardiovascular Center, and director of the Center for Research and Innovation, Harrington-McLaughlin Heart and Vascular Institute, University Hospitals Case Medical Center, Case Western Reserve University, Cleveland, Ohio, and principal investigator of the SPIRIT Small Vessel clinical trial.

FDA approval of the Nano was supported by results from the SPIRIT small vessel clinical trial, which showed low late loss (a measure of vessel re-narrowing) of 0.20 millimeters and a target lesion failure (TLF) rate of 8.1 percent, which is comparable to results observed during the SPIRIT trials with Xience V. TLF is defined as a composite measure of important efficacy and safety outcomes for patients and includes cardiac death, heart attack attributed to the target vessel (target vessel myocardial infarction), and ischemia-driven target lesion re-vascularization.

The Xience family of drug eluting stents is available in the United States in diameters from 2.25-4.0 millimeters.

In November, Abbott finally received FDA approval for Xience Prime for coronary artery disease. The Prime stent uses the same drug and biocompatible polymer as the Xience V and features an enhanced stent design and a delivery system designed for greater flexibility, ideal radial strength, excellent longitudinal strength and more accurate stent placement, according to the company. The device uses cobalt chromium technology and features a “peak-to-valley” mechanical design that imparts longitudinal strength and stability to the stent, according to the company. Prime is offered in lengths up to 38 mm. The same device received CE Mark in Europe in 2009. Japanese approval came in April this year.

$9.3 Billion ($35.2B total)
NO. OF EMPLOYEES: 90,000 (total)

“Despite a very challenging environment, 2010 was another productive year for Abbott, resulting in strong financial performance,” said Miles D. White, chairman and CEO of Abbott Laboratories.

Though end-of-year press releases and annual reports often are opportunities for lofty statements or a touch of bottom-line hyperbole, White seems to be right on the money with his quote above.

The medical device-related businesses of the Abbott Park, Ill.-based life-sciences giant showed robust growth for fiscal 2010 (ended Dec. 31). Overall, the company’s core device product categories—diabetes care, medical optics, vascular and diagnostics all grew—some by significant double digits, which is really saying something these days.

Diabetes care sales increased 2.7 percent compared with fiscal 2009 to $1.28 billion. Diagnostics grew 6 percent to $3.79 billion. The company’s portfolio of vascular products grew 18.5 percent across the board (notably, 40 percent internationally) to reach $3.19 billion in sales. One of the newest additions to Abbott’s device pipeline—medical optics (following the 2009 buyout of Advanced Medical Optics for almost $3 billion)—grew sales 19.5 percent compared with last year, reaching $1.06 billion in revenue.

Total company sales rose 14 percent to $35.2 billion. Overall net earnings dropped compared with 2009 from $5.74 billion to $4.62 billion, a 19.5 percent decline. Adjusted net earnings, not included one-time charges due to acquisitions, legal issue and taxes grew 12 percent to $6.5 billion.

A robust product pipeline helped to fuel revenue expansion for the year. In 2010, the company received CE Mark in the European Union for what it claims is the world’s first drug-eluting bioresorbable vascular scaffold—marketed under the trade name “Absorb,” the device restores blood flow by opening a clogged vessel and providing support to the vessel until it dissolves, leaving patients with a treated vessel free of a permanent metallic implant. The company also received approval—and expanded indication—in Europe for its Xience Prime drug-eluting coronary stent system. The device is now cleared for the treatment of critical limb ischemia (CLI) or severe pain of the lower leg. CLI is the most advanced form of peripheral artery disease that can ultimately lead to limb amputation.

In the area of diabetes care, Abbott received 510(k) clearance from the U.S. Food and Drug Administration (FDA) for its new FreeStyle blood glucose test strips. The new FreeStyle test strips minimize interference during blood glucose testing and are designed to offer a better testing experience, according to the company.

Early in the fiscal year, the company also garnered FDA approval for the Tecnis Multifocal 1-Piece intraocular lens (IOL) for cataract patients with and without presbyopia. Intraocular lenses are implanted in a patient’s eye after the removal of the natural lens that has become clouded by a cataract. Conventional monofocal IOLs are designed to focus primarily at one distance and do not correct presbyopia, an age-related change in vision that occurs when the eye’s natural lens can no longer adjust its focal length to allow clear vision at different distances.

The new lens has received presbyopia-correcting IOL status by the Centers for Medicare and Medicaid Services (CMS), providing Medicare beneficiaries with the option to receive the device for an additional fee as part of cataract surgery.

“With this approval, Medicare cataract patients have a new opportunity to enjoy near, intermediate and distance vision without needing glasses, with nearly 9 out of 10 patients reporting that they never wear glasses following surgery,” said Jim Mazzo, senior vice president, Abbott Medical Optics.

The Tecnis Multifocal 1-Piece IOL is a pupil-independent, full diffractive presbyopia-correcting lens designed for optimal image quality at all distances under any lighting condition. According to Abbott, the design of the lens provides improved near vision and reading speed compared to other presbyopia-correcting IOLs.

White said Abbott is prepared to continue its focus on new product development. In fact, Abbott spent a billion more dollars in 2010 (for a total of approximately 3.7 billion) than it did in 2009 on research and development activities company-wide.

“Our medical products pipeline is also full of high-quality opportunities,” he said. “In diagnostics, we have a number of new assays and next-generation systems launching over the next several years, in addition to multiple collaborations under way to develop companion tests that may be used to select patients for various cancer therapies. From our vision care pipeline, we expect 20 new products and technology advancements over the next five years.

7. Abbott Laboratories

$8.4 Billion ($30.8B total)

KEY EXECUTIVES:
Miles D. White, Chairman and CEO
Thomas C. Freyman, Exec. VP, Finance, and Chief Financial Officer
Richard W. Ashley, Exec. VP, Corporate Development
John M. Capek, Ph.D., Exec. VP, Medical Devices
Edward L. Michael, Exec. VP, Diagnostic Products
Robert B. Hance, Sr. VP, Vascular
Heather L. Mason, Sr. VP, Diabetes Care
James V. Mazzo, Sr. VP, Abbott Medical Optics
Michael J. Warmuth, Sr. VP, Diagnostics

NO. OF EMPLOYEES: 72,868 (total)

GLOBAL HEADQUARTERS: Abbott Park, Ill.

At Abbott Laboratories, 2009 might very well be remembered as the Year of Acquisitions. The healthcare giant spent 12 months trying to satisfy its voracious appetite for mergers and acquisitions, gobbling up at least seven companies to gain market share and bolster profits in the various industries in which it competes. By the time it had finished snacking in mid-December, Abbott had consumed more than $10.5 billion worth of M&A sustenance.

“We invested in new opportunities that will help us achieve consistent performance in the coming years,” Chairman and CEO Miles D. White said in Abbott’s 2009 annual report. “…We took strategic actions to augment and reshape our business portfolio for the long term, adding early- and late-stage pipeline technologies as well as new growth platforms.”

Most of those new growth platforms occurred within the company’s Medical Products business, which houses the Diagnostics and Vascular (products) franchises. Abbott’s Medical Product business reported a monstrous 23.4 percent increase in sales last year to $8.4 billion.

To help ensure future growth, Abbott purchased Advanced Medical Optics Inc., a Santa Ana, Calif.-based provider of LASIK and cataract surgical devices, and contact lens care products. The deal cost Abbott roughly $2.8 billion in cash and assumed debt. Executives said the acquisition would enhance and strengthen the company’s mix of medical device businesses and give it a leadership position in the eye care market. A news release touting the deal stated that Abbott holds the top market position in LASIK surgical devices, the number two position in the cataract surgical device market and the number three (market) position in contact lens care products.

Abbott further expanded its vision care portfolio last fall with the $400 million cash purchase of Visiogen Inc., a privately-held company based in Irvine, Calif., that has European operations in Karlsruhe, Germany. The firm has developed intraocular lens (IOL) technology to treat presbyopia in cataract patients.

Executives said the Visiogen merger gives Abbott access to an IOL market that is worth an estimated $1.9 billion and is expected to swell to $2.7 billion by 2014. “Visiogen’s Synchrony lens allows Abbott Medical Optics to enter the growing IOL segment and enhances our premium IOL portfolio that includes the Tecnis Multifocal lens,” Jim Mazzo, senior vice president of Abbott and president of Abbott Medical Optics, said in announcing the Visiogen deal in September.

Three months after the Visiogen deal, Mazzo’s colleague Edward L. Michael, executive vice president of the Diagnostics franchise, discussed the advantages of the company’s merger with STARLIMS Technologies Ltd., an Israeli provider of laboratory information management systems. That deal was worth roughly $123 million in cash.

The STARLIMS acquisition, according to Abbott executives, strengthens the company’s competitive position in the global diagnostics market and provides its customers with Web-based applications to help laboratories store, retrieve and analyze an increasing amount of clinical, managerial and administrative data.

Perhaps bolstered by the Web-based platform that STARLIMS provides, Abbott’s Diagnostics franchise experienced its best year in a decade, generating $3.5 billion. Its operating earnings shot up 8.2 percent to $406 million, while its total assets jumped 14.6 percent to $3.6 billion. The segment launched a number of new products last year, including the Architect c4000 clinical chemistry analyzer, an instrument that monitors the general health of a patient by measuring levels of sodium, potassium, chloride and organ function. The Architect c4000 was designed to integrate with Abbott’s i1000SR immunoassay analyzer to form the Architect ci4100, an automatic analyzer that conducts both immunoassay and chemistry tests on one platform. Both products, Abbott officials said, enable the company to offer chemistry, immunoassay, and integrated diagnostic testing solutions to help improve laboratories’ performance and efficiency.

Abbott’s Vascular unit was one of only two areas to achieve double-digit sales growth last year (the second was the company’s “Other” unit). Vascular product sales generated $2.7 billion in 2009 (year ended Dec. 31), a 20 percent increase compared with the $2.2 billion the franchise netted in sales the previous year. Earnings more than doubled, going from $205 million in 2008 to $557 million last year. Diabetes products garnered $1.2 billion for the company in 2009, while medical optics products generated $890 million.

The Vascular unit’s solid performance last year unquestionably was driven by the launch of several new products and the worldwide rollout of Abbott’s next-generation drug-eluting stent system. The company received CE Mark approval early last summer for its Xience Prime stent, which improves upon the Xience V system through improved deliverability and longer lengths. The Xience Prime uses cobalt chromium technology, which enables surgeons to use thin struts to support the blood vessel in which the stent is being placed. The Prime also has a better visibility under X-rays than its predecessor.

By September of last year, Abbott had launched the Xience Prime in Europe and certain countries throughout Latin America and Asia Pacific. Its cousin, the Xience V, continued to penetrate world markets, having been approved in both Canada and China.

Some of the other new vascular products Abbott launched last year included the FoxCross PTA catheter and the Hi-Torque Versacore .035 guidewire. The FoxCross catheter is available in diameters ranging from 3 millimeters to 14 millimeters, balloon lengths from 20 centimeters to 120 centimeters, and catheter lengths ranging from 50 centimeters to 135 centimeters, according to a news release about the product. The Versacore guidewire features a soft, shapeable tip to provide safe access to peripheral lesions and enhanced visibility under fluoroscopy.

Besides the FoxCross catheter and the Versacore guidewire, Abbott also launched the Emboshield NAV embolic protection system for use in carotid stenting procedures. The Emboshield system gives patients with partially blocked carotid arteries a less invasive alternative to surgery.

Abbott also expanded into the structural heart market in 2009 with the acquisition of Evalve Inc., a Menlo Park, Calif.-based firm that develops devices for the minimally invasive repair of cardiac mitral valves. The agreement called for an initial payment of $320 million in cash plus an additional payment upon completion of certain regulatory milestones, for a total of up to $410 million. Executives said the merger would provide Abbott with leading technology in the field of minimally invasive heart repair and would further broaden the company’s medical devices portfolio.

Adding to the portfolio of minimally invasive mitral valve repair was the development last year of the MitraClip system, a catheter-mounted device that acts like a clothespin to clip together the flaps of a leaky mitral valve. The MitraClip system is available in Europe and currently is under review by the U.S. Food and Drug Administration.

Abbott Laboratories may earn the majority of its billions in the pharmaceutical sector, but its medical device-related businesses certainly are no afterthought. In fact, 2008 brought some key reorganization through divestiture and acquisition to better position the company in key device sectors and take advantage of internal synergies.

$6.3 Billion ($25.9B total)
NO. OF EMPLOYEES: 67,000

Abbott’s medical device and diagnostics unit made significant sales gains, increasing revenue from $5.2 billion in 2006 to $6.3 billion in 2007, which largely was driven by the company’s vascular and diabetes businesses. But if one thing dominated the news out of the company’s medical device division, it was the buzz surrounding the pending approval of its Xience V drug-coated stent.

The 120-year-old company submitted its approval application to the FDA in June 2007. In November, the FDA’s Circulatory Systems Devices panel, in a 9-to-1 vote, recommended approval—with certain conditions—of the everolimus-eluting stent system.  The panel recommended post-marketing study requirements. The panel also agreed unanimously on the condition that the device label contain the same recommendations for dual anti-platelet therapy duration as the other drug-eluting stents already on the US market. Some industry watchers had predicted there were not enough long-term data to support an affirmative vote for the device.

“I believe reasonable assurance of safety was demonstrated,” said panel member Richard Page, MD of the University of Washington in Seattle, WA. “I think this represents a step forward for interventional cardiologists and our patients.”

Xience V was launched in Europe and other international markets in 2006. The FDA finally approved Xience before the July 4 holiday this year, making Abbott the fourth company to receive approval for a drug coated-stent in the US market after Johnson & Johnson, Boston Scientific and Medtronic, which recently received FDA approval for its Endeavor stent. Abbott has said clinical trial results have shown a “significant reduction” in major adverse cardiac events. Most analysts think Xience will quickly become the stent of choice, because tests have shown it may have a lower rate of blood clots forming down the road and doctors think it’s easier to put in. It is a smaller, more flexible stent than earlier-generation devices.

By 2010, analysts believe Xience could generate more than $500 million in annual sales, surpassing the current market leader, Taxus, which is sold by Boston Scientific.

Overall, the company’s medical products business provided solid financial results, growing by double digits. As a result of the acquisition of Guidant’s vascular intervention and endovascular business, Abbott’s Vascular product unit posted a 53.8% increase in sales in 2007 compared with 2006—a total of $1.66 billion. The Vascular unit, however, did post a loss of $188 million. Stents contributed $672 million to sales in 2007—about the same as last year. Other coronary products totaled $604 million, up 32.5%. The company’s Diagnostics business grew 11.1% to $3.15 billion in sales. The Diabetes business increased sales 9.9% to $1.25 billion. Abbott’s Endovascular revenues grew 11.9% to reach $388 million. Both US and international markets across all product categories posted sales gains. Out of the company’s overall $25.9 billion in revenue in 2007, Abbott reported $3.61 billion in net income, more than double the previous year’s net earnings of $1.72 billion, in part due to the Guidant division purchase.

“[The year] 2007 was an outstanding year for Abbott across all of our major businesses, and our strong momentum has carried into 2008,” said CEO Miles White. “We delivered another year of strong sales and profitability. We expanded our business in important emerging economies such as China, India, Russia and Latin America. And we were highly productive in building our pipeline, providing the basis for a steady new product stream and continued future success.”

On the diagnostics side in 2007, Abbott launched the Architect c16000, its large-volume chemistry analyzer, and the Architect ci16200, which consolidates both immunoassay and clinical chemistry testing. Both systems will better meet the needs of large-volume laboratory customers by processing more tests, faster, the company said. At the beginning of 2007, GE Healthcare announced plans to acquire Abbott’s in-vitro and point-of-care diagnostic businesses for $8.13 billion. By July, however, the deal had fallen apart and the companies, whose boards both approved the merger, said they were unable to agree on final terms.

In other new product news, Abbott’s Spine division in Austin, TX unveiled the Universal Clamp spinal fixation system for the correction of scoliosis and other spinal disorders. The device consists of a polyester band, a titanium clamp and a set screw and can be used in place of, or in addition to, the screws, wires, cables and hooks that are typical in modern spine surgery.

Abbott continues to expand its reach in the blood glucose monitoring market by continuing to introduce systems that are easier to use, require smaller blood samples and provide faster results. In April 2007, Abbott Diabetes Care launched its FreeStyle Lite Blood Glucose Monitoring system for people with diabetes after receiving a 510(k) clearance from the FDA. The device eliminates the manual coding step usually required by most blood glucose meters before starting a new vial of test strips, allowing people with diabetes to test quickly and more easily. A year later, Abbott’s FreeStyle Freedom Lite Blood Glucose Monitoring System became available in the United States, along with the FreeStyle Navigator Continuous Glucose Monitoring System. Designed to discretely and continuously measure glucose levels through a sensor in the back of the upper arm or abdomen, the Navigator system provides minute-by-minute information about which way and how quickly blood sugar levels are changing. This information can lead to proactive adjustments that can result in tighter glucose ranges, the company said. It received a CE Mark in June 2007 and has been available outside the United States since September 2007.

On a management note, in August 2007, Richard A. Gonzalez, president and chief operating officer, and a member of Abbott’s board of directors, retired after 30 years with the company. The heads of Abbott’s four operating businesses—medical devices, pharmaceuticals, nutritionals and diagnostics—now report to White.

To drive further growth, the company spent $2.5 billion in R&D investment, up from $2.3 billion in 2006. At present, Abbott claims it is the only company with a bioabsorbable drug-eluting coronary stent in human clinical trials. The Absorb stent is made of polylactic acid and is designed to restore blood flow in clogged arteries and then be fully absorbed by the body. Also currently in development is a fully integrated blood glucose monitoring system that combines a glucose meter, test strips and lancing capabilities in one device.

$5 Billion ($22.5B Total)

Key Executives:
Miles D. White, Chairman and CEO
Richard A. Gonzalez, President and COO
Richard W. Ashley, Exec. VP, Corporate Development
Thomas C. Freyman, Exec. VP, Finance and CFO
Joseph M. Nemmers, Jr., Exec. VP, Diagnostics and Animal Health Divisions
John Capek, Sr. VP, Abbott Vascular
Robert B. Hance, Sr. VP, Diabetes Care Operations
Edward L. Michael, Sr. VP, Medical Products

No. of Employees: 67,000

World Headquarters: Chicago, IL

Abbott’s medical products business continues to undergo significant transformation. In 2004, the company spun off its hospital products business as Hospira.

In early 2006, Abbott altered its medical products portfolio yet again when it acquired the vascular and endovascular businesses of the former Guidant Corp. from new owner Boston Scientific, for which it paid $4.1 billion in cash In addition, plans called for Abbott to pay Boston Scientific milestone payments of $250 million at FDA approval of Guidant’s drug-eluting stent, and an additional payment of $250 million upon a similar approval in Japan. Abbott also provided Boston Scientific with a five-year, $900 million interest-bearing loan. In addition, Abbott purchased approximately 64 million shares of Boston Scientific stock for $1.4 billion.

In yet another profile-altering move in the first quarter of this year, Abbott announced plans to divest its core laboratory diagnostics business to General Electric for $8.13 billion.

Abbott now claims the No. 3 position in the nearly $10 billion vascular care market. It hopes to become a market leader with Xience V, a next-generation drug-eluting stent, which already has begun sales in Europe and Asia.  In June this year, Abbott submitted its premarket approval (PMA) application for FDA approval. The PMA includes safety and efficacy data from the Xience V Spirit family of clinical trials, which demonstrated superior results for Xience VM over the Boston Scientific’s Taxus Paclitaxel-Eluting Coronary Stent System in the primary endpoint of reducing vessel re-narrowing (angiographic late loss), the company said.

Beyond Xience V, Abbott Vascular is developing additional next-generation technologies, such as a bioabsorbable drug-eluting stent, which could address clinical challenges that still exist.  Abbott’s endovascular business includes carotid stents, embolic protection devices, balloons and wires. In this emerging frontier of vascular disease, Abbott said it is the only company that offers two carotid stent platforms. Carotid stenting is a less-invasive alternative to surgery for patients at risk of stroke from a partially blocked carotid artery, the major blood vessel in the neck that supplies blood to the brain. The Xact and RX Acculink stents are used with the Emboshield and RX Accunet embolic protection devices to catch plaque (emboli) fragments that may be released during the stenting procedure.

In addition to its vascular division, Abbott’s medical product unit also includes molecular diagnostics, diabetes care, spine and animal health.

The company has established a leading position in the large and growing blood glucose monitoring market. In 2006, Abbott launched is FreeStyle Freedom blood glucose meter, which features virtually pain-free testing, using the world’s smallest blood sample size, in addition to offering fast five-second test time, the company said. Abbott also markets FreeStyle Flash (FreeStyle Mini), the world’s smallest meter, and Precision Xtra (Precision Optium/Xceed), a home-use meter that measures glucose and ketone levels.

For the fiscal year ended Dec. 31, Abbott reported overall company sales of 22.5 billion, up from $22.3 billion in 2005. Net earnings, however, registered a steep decline from $3.4 billion in 2005 to $1.7 billion for fiscal 2006, due mostly to the acquisition Guidant’s vascular business. Sales from the diagnostic and vascular businesses totaled $5 billion. Together, the units reported earnings of $315 million ($431 for diagnostics and a $115 loss for vascular.) In its end-of-year results, Abbott did not break out sales and earnings for its diabetes and spine businesses. The company’s pharmaceutical business is the clear sales driver, reporting more than $12 billion in sales for 2006, though reported sales were down from $13.7 billion in 2005.