) recently announced the launch of Absorb, the world's first drug
eluting bioresorbable vascular scaffold (BVS), in Europe and parts
of Asia Pacific and Latin America.
Absorb, a first-of-its-kind device, is approved for the
treatment of coronary artery disease (CAD).
Like a metallic stent, Absorb restores blood flow to the heart.
However, unlike a metallic stent, Absorb dissolves in the body,
thereby allowing the treated vessel to work in a more natural
manner given the absence of a permanent metallic stent.
According to Abbott Labs, a dissolving scaffold could have
certain long-term advantages including expansion and contraction of
vessels as required and reduction in the need for long-term
treatment with blood thinners. Moreover, the absence of a permanent
implant could make future interventions smoother.
We note that Absorb is currently under development in the US.
Apart from Europe, parts of Asia Pacific (including Hong Kong,
Singapore, Malaysia and New Zealand) and parts of Latin America,
Absorb is available in the Middle East.
The launch of Absorb should boost the performance of Abbott
Labs' vascular devices segment which posted sales of $766 million
in the second quarter of 2012.
Meanwhile, Abbott Labs has been working on expanding its
position in the $2 billion plus core coronary market. The company's
next-generation balloon dilatation catheter, TREK, is already
available in the US, Europe and Japan. Abbott Labs is currently
working on launching additional balloon catheters and
next-generation guide wires in the coming years.
Neutral on Abbott Labs
We currently have a Neutral recommendation on Abbott Labs, which
carries a Zacks #3 Rank (short-term 'Hold' rating). Abbott Labs
remains on track to split into two separate publicly traded
companies by year end. While one company will deal in diversified
medical products, the other (AbbVie) will focus on research-based
pharmaceuticals. We are positive on the split which should allow
the two separate entities to perform in a more focused manner.
Humira continues to perform well and this should reduce concerns
regarding AbbVie's growth prospects.
ABBOTT LABS (ABT): Free Stock Analysis Report
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