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(Reuters) -Abbott Laboratories said the market was over-estimating the hit to sales of its glucose monitoring products from growing popularity of weight-loss drugs, adding the treatments could end up boosting sales at its diabetes and nutrition businesses.
The company’s shares have dropped 16% this year, mainly on concerns that new diabetes drugs such as Novo Nordisk (NYSE:NVO)’s Ozempic and Eli Lilly (NYSE:LLY)’s Mounjaro could eat into sales of continuous glucose monitoring (CGM) devices.
Hurdles in health insurance reimbursement and pricing could keep the market growth for these drugs limited to a small number of patients, and diabetes patients could actually end up using glucose monitors together with weight-loss drugs in the future, Abbott CEO Robert Ford (NYSE:F) said on a post-earnings call on Wednesday.
FreeStyle Libre, Abbott’s CGM device used by diabetes patients, brought in sales of about $1.4 billion in the third quarter, up 30.5%, and accounting for nearly 14% of the company’s revenue.
With all the concerns around a shrinking market for CGM devices due to demand for GLP-1 drugs, it is ironic to see Abbott put up one of its best Libre prints, Evercore ISI analyst Vijay Kumar said.
Abbott’s medical device sales rose nearly 17% to $4.25 billion, beating analysts’ estimates of $4.16 billion, according to LSEG data.
The company is also seeing a recovery in sales of other medical devices such as heart valves and pacemakers as more people, especially older patients, opt for surgeries that were put off during the pandemic.
Abbott’s shares rose 3.7% to $95.53.
On an adjusted basis, the company earned $1.14 per share, above estimates of $1.10.
Abbott also tightened its annual adjusted profit outlook to between $4.42 and $4.46 per share from its previous forecast of $4.30 to $4.50 per share.
