Abbott Laboratories, a diversified healthcare company out of Chicago, said it’s satisfied with the second-quarter performance of its Santa Ana-based eye device and contact lens care unit, Abbott Medical Optics Inc., despite some fretting on Wall Street.
Abbott said on its second-quarter conference call that sales for Abbott Medical, which was renamed from Santa Ana’s Advanced Medical Optics Inc., totaled $265 million in the quarter ended June 30. Abbott Medical is part of what Abbott categorizes as “other” medical device products, of which sales rose 37% to $730 million in the second quarter.
“I’ll just say the sales are right in line with our model expectations,” said Abbott’s Chief Financial Officer Thomas Freyman on the earnings call.
Abbott bought the former Advanced Medical Optics for $2.8 billion in February to get into the $22 billion eye care market. Abbott Medical holds the top market position in laser vision correction and the No. 2 market position in cataract surgery with the Tecnis re-placement lenses, according to the company.
But analyst Rick Wise of Leerink, Swann & Co., a Boston-based investment bank, said in a report that questions remained about what he called “lackluster” sales from Abbott Medical.
Overall, Abbott’s second-quarter profit fell 3% to $1.3 billion, when compared with second quarter of 2008, but its quarterly revenue was up 2.5% to $7.5 billion.
Abbott said the profit drop came on a mix of buyout charges that included $33 million related to the Abbott Medical deal, as well as lower drug sales.
Without buyout and cost reduction charges, Abbott’s profit totaled $1.4 billion, in line with Wall Street expectations.
Freyman said that the integration of Ad-vanced Medical into Abbott has been “very straightforward.”
Abbott Medical’s management team, including James Mazzo, now the unit’s president, has remained intact from the Advanced Medical days, and the organization is operating independently, Freyman said. He said Abbott has a “little more work to do to fully integrate” but expects that process to be completed by the end of 2009.
Beckman Coulter Talks Reform
Beckman Coulter Inc., a Fullerton maker of biomedical testing equipment and supplies, expects to benefit from any healthcare reform coming out of Washington, D.C., Chief Executive Scott Garrett told the Wall Street Transcript, an industry newsletter.
Beckman makes machines and reagents for a range of medical tests. Its products are used by hospitals, clinical laboratories and research facilities.
If healthcare reform results in more people with insurance, Beckman would benefit because its customers would ramp up medical testing, Garrett said.
“I think more people having coverage will require more testing. Getting them into the healthcare system sooner will likely lead to better and earlier diagnosis and more cost-effective healthcare,” he said.
Healthcare reform likely would require providers to use more data in caring for their patients, and that data would probably come from clinical laboratories, Garrett said.
“So I think we have a chance to play an even more prominent role in the future in healthcare,” Garrett said.
Beckman’s business is “certainly part of (the healthcare) equation” and diagnostic and clinical laboratory testing was one of the “great bargains in healthcare,” Garrett said
“In real dollars, a test that cost $10 in 1985 probably costs less than $8 today,” Garrett said. “On an inflation-adjusted basis, it’s probably less than half of what it cost in 1985. So we are improving the productivity of the healthcare system and doing it very cost-effectively.”
Garrett also emphasized Beckman’s position as the largest standalone company in the medical diagnostic field.
“We are the one company in this field that’s entirely dedicated to testing. We are not a conglomerate; we are not even a diversified healthcare company. We are a biomedical testing company,” he said.
Beckman will report its second-quarter results on Thursday. Analysts expect the company to post a $51.3 million profit on sales of $761.3 million.
Bits and Pieces:
Irvine device maker Masimo Corp. said that it received a silver award in the Medical Design Excellence Awards competition for its Rad-87 Pulse CO-Oximeter, which includes blood constituent monitoring technology to measure things such as patients’ hemoglobin and carbon monoxide levels. The award is Masimo’s third in the competition’s history; it also won awards in 2006 and 2001 ER Connect, a system to help medical groups and health systems share information, was displayed at a recent demonstration by the National Health Information Network. ER Connect is produced by SafetyNet Connect, a joint venture between ELM Technologies and NetChemistry of Newport Beach Hoag Memorial Hospital Presbyterian in Newport Beach said it was one of 23 winners of a quality award presented by Premier Healthcare Alliance, a hospital buying group with offices in San Diego and North Carolina.
