* Q1 EPS, excluding items, $1.03 vs Street view $1.00
* Sales $9.46 bln vs Street view $9.36 bln
* Humira sales jump 17 pct to $1.93 bln
* Shares little changed
By Ransdell Pierson
April 18 (Reuters) - Abbott Laboratories Inc reported better-than-expected quarterly earnings on surging sales of Humira, underscoring the company’s reliance on the injectable arthritis medicine expected to overtake Lipitor as the world’s top-selling drug this year.
“Abbott has posted a strong start to 2012,” Jefferies analyst Jeffrey Holford said, suggesting a strong tone for the full year.
Humira was launched by Abbott a decade ago and keeps picking up steam. Its sales rose 17 percent to $1.93 billion in the quarter, well above many industry analysts’ predictions.
“There’s very little to quibble with; it’s a solid performance,” said Atlantic Equities analyst Richard Purkiss, citing Humira sales and surprisingly strong growth for Abbott’s nutritional products and diagnostic brands in the first quarter.
Abbott in October announced plans to spin off its branded prescription drug business into a separate publicly traded company, amid criticism that it has become too dependent on Humira.
Humira is facing growing competitive threats, including possible cheaper generic versions of the injected drug and a new type of pill being developed by Pfizer Inc, and concerns about its vulnerability have held back Abbott shares.
Abbott said on Wednesday the spinoff — meant to increase Wall Street’s focus on the remaining company’s medical devices, diagnostics, nutritionals and drugs that have lost patent protection — remains on track to take place by late in the year. The new company’s pipeline would include potentially lucrative treatments for hepatitis C, Parkinson’s disease and multiple sclerosis.
The big question for investors is whether those drugs succeed in trials and whether the new branded pharmaceuticals business, to be named AbbVie, can successfully acquire enough promising new medicines to lessen its reliance on Humira.
“That’s one of the key risks for owning the pharmaceuticals business after the separation: it will be very leveraged to the long-term future of Humira,” Purkiss said.
Humira is deemed somewhat protected from generic rivals because it is grown in living cells and therefore difficult to manufacture.
But it could face a significant threat from Pfizer’s experimental drug tofacitinib, which blocks a protein called JAK and could be approved in the United States as soon as August. In clinical trials, the Pfizer drug has proven as effective as Humira.
As a pill, the Pfizer drug would likely be far cheaper than Humira and appeal to governments outside the United States intent on controlling medical costs, Purkiss said.
“A cheaper oral alternative, that more than anything is the risk” to Humira, the analyst said.
Abbott shares have risen 15 percent in the past two years, versus a 12 percent gain for the drug sector. But company Chief Executive Miles White has long complained that Abbott shares deserve a higher premium given the company’s superior earnings growth in recent years.
White will run the diversified products company, while his longtime lieutenant Richard Gonzalez becomes CEO of the branded pharmaceuticals unit. White in December said each company would likely be valued in the $40 billion to $45 billion range and that neither would be put up for sale.
For future growth, Abbott is counting heavily on sales in emerging markets, such as India and China, with products like infant formula having especially bright prospects among their growing numbers of middle class families
Abbott earned $1.24 billion, or 78 cents per share, in the first quarter, up from $864 million, or 55 cents per share, in the year-earlier period.
Excluding special items, it earned $1.03 per share. Analysts, on average, had forecast $1.00.
Revenue rose 4.6 percent to $9.46 billion, topping Wall Street expectations of $9.36 billion.
Nutritional product sales, which include the company’s Similac baby formula, rose 10 percent to $1.6 billion, helped by new product launches and growing demand in emerging markets. The company’s diagnostics products also reported solid growth.
Sales of vascular products, comprised largely of heart stents, fell 5 percent to $803 million on declining revenue from Boston Scientific Corp’s Promus stent. Promus is a private-label version of Abbott’s widely used Xience stent; Abbott has shared in profits from Promus under a longstanding agreement to manufacture the product for Boston Scientific.
Abbott on Wednesday raised its full-year profit forecast to between $5.00 and $5.10 per share, from its earlier view of $4.95 to $5.05. The new forecast would mean growth of up to 9.4 percent from 2011.
Abbott shares were down 1 cent to $60.42 in afternoon trading on the New York Stock Exchange, amid slight declines for the drug sector and broad stock market.