By Leroy Leo and Pratik Jain
(Reuters) - Abbott Laboratories (NYSE:ABT) said the market was overestimating the hit to sales of its glucose monitoring products from growing popularity of new diabetes drugs, adding the treatments could end up boosting sales of the medical device maker.
The company's shares have dropped 16% this year, mainly on concerns that new GLP-1 diabetes drugs such as Novo Nordisk (NYSE:NVO)'s Ozempic and Eli Lilly (NYSE:LLY)'s Mounjaro could eat into the sales of its continuous glucose monitoring (CGM) devices.
Hurdles in health insurance reimbursement and pricing could, however, keep market growth for GLP-1 drugs limited to a small number of patients in the near term, Abbott CEO Robert Ford (NYSE:F) said on Wednesday.
But in the long term, diabetes patients could end up using glucose monitors with the weight-loss drugs, Ford said, adding he also sees an opportunity for nutrition products, considering the side effect of significant muscle loss from GLP-1 drugs.
Third-quarter sales of FreeStyle Libre, Abbott's CGM device used by diabetes patients, jumped 30.5% to $1.4 billion, lifting Abbott's shares 3% in morning trade.
With all the concerns around a shrinking market for CGM devices due to rising demand for GLP-1 drugs, it is ironic to see Abbott put up one of its best Libre prints, Evercore ISI analyst Vijay Kumar said.
The numbers helped Abbott's medical device sales that stood at $4.25 billion, beating analysts' estimates of $4.16 billion, according to LSEG data.
The company is also seeing a recovery in sales of other medical devices such as heart valves and pacemakers as more people, especially older patients, opt for surgeries they put off during the pandemic.
Abbott's adjusted profit of $1.14 per share was also above estimates of $1.10.
The company tightened its annual adjusted profit outlook to between $4.42 and $4.46 per share from its previous forecast of $4.30 to $4.50 per share.