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Abbott's Q4 pharma sales weather Depakote downturn

This article was originally published in Scrip

Executive Summary

Abbott Laboratories' fourth-quarter earnings were virtually flat at $1.54 billion as its sales jumped by double digits. The healthcare firm reported net sales of $8.79 billion, an increase of 11%, with pharmaceutical contributing the lion's share of its revenues.

Total 2009 worldwide sales were $30.77 billion, an increase of 4%, while net earnings during the year rose by 18% to $5.75 billion.

The unrelenting demise of Depakote (divalproex sodium) to generic competition during 2009 has place a greater reliance on Abbott's other pharmaceutical products to drive growth. The pharma business, which generates more than half of the company's sales, has had to handle falling sales of the anti-epilepsy drug since the second quarter of 2008.

In the fourth quarter, worldwide pharmaceutical sales of $4.85 billion (+5%) were driven by double-digit sales of the rheumatoid arthritis treatment Humira (adalimumab). The product's revenues grew by more 23% to $1.66 billion, with 48% reported growth in international markets, thereby quashing the impact of Depakote's and TriCor/Trilipix's (fenofibrate/fenofibrate acid) declines.

During the fourth quarter Depakote's sales fell by 62% to $102 million, while the dyslipidaemia drugs contracted by 8% to $419 million. Kaletra (lopinavir/ritonavir), a HIV antiviral, remained flat at $378 million and Niaspan (extended-release niacin) grew by 15% to $254 million.

The full-year picture was less rosy for Abbott's pharma business, where its sales actually fell by 1% to $16.49 billion. The division was weighed down by an 8% drop in its US revenues to $7.79 billion, with declines across most of its pharma products, including Humira, in the US.

2009 nutritional sales were up by 7% to $5.28 billion with international sales edging above US sales. Worldwide diagnostic sales were flat at $3.58 billion and its vascular business expanded by 20% to $2.69 billion following growth of almost a third in the US.

Abbott Laboratories' Q4 and full-year 2009 selected pharmaceutical sales ($mill)

Product

 

Q4 sales

 

% change

 

Full-year sales

 

% change

 

Humira

 

1,662

 

+23

 

5,488

 

+21

 

TriCor/TRILIPIX

 

419

 

-8

 

1,366

 

-7

 

Kaletra

 

378

 

 

1,337

 

 

Niaspan

 

254

 

+15

 

855

 

+9

 

Lupron

 

215

 

+1

 

800

 

+23

 

Synthroid

 

148

 

+4

 

502

 

-4

 

Depakote

 

102

 

-62

 

425

 

-69

 

Diluted earnings per share (EPS) for the fourth quarter was up by 10% to 98 cents and up by 22% to $3.69 for the full year.

earnings outlook

Abbott expects full-year EPS of $4.20-4.25, excluding specified items. The midpoint of this range reflects growth of 13.5%, including the acquisition of Solvay Pharmaceuticals, which is expected to close next month.

For the fourth quarter, R&D costs edged up by 2% to $747 million, while selling, general and administrative (SG&A) costs fell by 3% to $2.23 billion. For the full year, R&D costs were $2.74 billion (+2%) and SG&A expenses were flat at $8.41 billion.

Total spending for 2009 was $24.53 billion, an increase of 3% on the year before.

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