Abbott profit soars; new stent has explosive sales

By Ransdell Pierson

NEW YORK (Reuters) - Abbott Laboratories Inc (ABT.N) reported a 51 percent rise in third-quarter profit on Wednesday as its recently launched Xience heart device generated explosive sales and became the U.S. market leader in the highly competitive field.

The U.S. introduction of Xience, a drug-coated stent that props open heart arteries that have been cleared of plaque, came in early July. Boston Scientific Corp (BSX.N) simultaneously launched an identical product called Promus that entitles Abbott to 40 percent of those profits.

"Xience has become the No. 1 stent on the U.S. market, with share in the mid-to-upper 20s," said Abbott spokesman Scott Stoffel. He noted it is also the leading drug-eluting stent in Europe and all other regions where it had previously been introduced.

Abbott had previously predicted a U.S. market share of 25 percent to 30 percent for Xience during its first 12 months, Stoffel said. "It has exceeded our expectations."

Xience and Promus are wresting sales away from Johnson & Johnson's (JNJ.N) Cypher and Boston Scientific's older Taxus stent, helped by a design that make it easier for doctors to deliver them to the heart, as well as impressive data on safety and effectiveness.

Drug-coated stents have become a mainstay of heart treatment, although Cypher and Taxus sales have been hobbled by concerns that they can cause blood clots that lead to heart attacks.

Abbott's stent business also includes older, bare-metal devices. In addition, the company receives a small royalty for a drug it developed that is used to coat Medtronic Inc's (MDT.N) Endeavor stent.

Total company stent sales more than doubled to $383 million, including $305 million from Xience and Promus and Medtronic royalties, Abbott said.

"These are absolutely blowout sales for Xience and Promus," said RBC Capital Markets analyst Phillip Nalbone. "They are now dominating the drug-coated stent market and will be a big driver of profitability and cash flow for Abbott."

The suburban Chicago drugmaker also reported double-digit sales gains for its prescription drugs, nutritional products and overall line of medical devices, prompting Abbott to raise its 2008 earnings forecast.

Arthritis drug Humira continued to accelerate, its quarterly sales jumping 50 percent to $1.2 billion.

"The company is hitting on all cylinders," Nalbone said, noting that Abbott raised its 2008 Humira sales forecast to more than $4.4 billion. He predicted its annual sales could grow to $10 billion in coming years.

Company earnings rose to $1.08 billion, or 69 cents per share, from $717 million, or 46 cents per share, in the year-earlier quarter, when Abbott took a number of special charges.

Excluding special items, profit was 79 cents per share. Analysts on average expected 77 cents, according to Reuters Estimates.

Sales rose almost 18 percent to $7.5 billion, above the Reuters Estimates forecast of $7.35 billion. The increase would have only been 12.9 percent without the continued benefit from the weak dollar, which raises the value of overseas sales when converted back into U.S. currency.

Abbott raised its full-year earnings forecast to a range of $3.31 to $3.33 per share, from its earlier view of $3.24 to $3.28.

The company's shares were down 7 cents at $54.71 in morning New York Stock Exchange trade. J&J fell 1 percent to $63.38, while Boston Scientific gained 1 percent to $9.39.

(Reporting by Ransdell Pierson; Editing by Lisa Von Ahn)