Abbott (NYSE:ABT) has hit the headlines following the announcement of the receipt of CE Mark and commercial launch of Alinity h-series integrated system for hematology testing.
Per management, the Alinity h-series solution is 20% faster per m2in comparison to the integrated hematology systems presently available. Moreover, with a throughput of 133 complete blood counts (CBCs) per m2, the Alinity h-series provides a cost and time efficient diagnostic testing experience for laboratories.
Notably, the Alinity portfolio covers clinical chemistry, immunoassay, blood and plasma screening, point of care, hematology and molecular diagnostics along with Abbott's AlinIQ.
Recent Developments in Diagnostics
This Illinois-based global medical device company recently signed a $252-million managed equipment service contract with North West London Pathology (NWLP), hosted by Imperial College Healthcare NHS Trust to gain traction in the rapidly growing diagnostics market. Per NWLP, the alliance, which presently covers 6% of the pathology market in the U.K., is expected to carry out 26 million tests per year.
Continuing with the slew of developments, in June 2017, the company received CE Mark for Alinity hq, which has become the fifth new diagnostic system to be launched in Europe along with the ongoing rollout of four instruments in the areas of immunoassay, clinical chemistry, blood screening and point-of-care.
Interestingly, Abbott raked in 18.7% of total revenues from the diagnostics segment in the last-reported third quarter. The latest development is expected to help the company gain further traction in this space.
Market Prospects
We believe an ageing population, unhealthy lifestyle and rising awareness and expenditure in healthcare will continue to drive the diagnostics market. Going by a report by MarketsAndMarkets, the global market for molecular diagnostics is projected to reach a value of $10.12 billion by 2021, at a CAGR of 9.1%. Thus, in view of Abbott’s current developments in the space, we expect top-line contributions to boost from the diagnostics segment.
However, the diagnostics market is dominated by well-established players like Quest Diagnostics (NYSE:DGX) and QIAGEN N.V. (NASDAQ:QGEN) .
Share Price Performance
Abbott has been gaining investor confidence on consistently positive results. Over the past three months, the company’s share price has outperformed the broader industry. The stock has gained 8.2%, higher than the broader industry’s gain of 1.7%. The company has also surpassed the 5.7% gain of the S&P 500 market.
Zacks Rank and Key Pick
Abbott carries a Zacks Rank #3 (Hold).
A better-ranked medical stock is Walgreens Boots Alliance, Inc. (NASDAQ:WBA) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Walgreens Boots has a long-term expected earnings growth rate of 10.1%. The stock has gained 3.2% year to date.
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Abbott Laboratories (ABT): Free Stock Analysis Report
Qiagen N.V. (QGEN): Free Stock Analysis Report
Quest Diagnostics Incorporated (DGX): Free Stock Analysis Report
Walgreens Boots Alliance, Inc. (WBA): Free Stock Analysis Report
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