Important note: Information in this article was accurate in 2008. The state of the art may have changed since the publication date.
Chicago Tribune - April 17, 2008
Bruce Japsen, bjapsen@tribune.com and James P. Miller, jpmiller@tribune.com
The comparison is skewed upward by one-time factors in the year-ago quarter that suppressed profit.
The North Chicago maker of drugs and medical devices "started 2008 with a strong first quarter," said Chairman and Chief Executive Officer Miles White.
Abbott's net income rose to $937.9 billion, from $697.5 billion. In the year-ago quarter the firm recognized a $57 million after-tax charge related to acquisition integration and an even more punishing $75 million charge to lower the carrying value of Abbott's holdings in Boston Scientific Corp. stock.
Excluding those one-time items in both quarters, Abbott's earnings were $987.7 million, or 63 cents a share, up from the adjusted year-ago quarter's $854.1 million, or 55 cents a share. Earnings in the latest quarter were helped in part because interest expense declined by $31 million, or 25 percent, to $93.2 million.
Shares of Abbott were off slightly in what some analysts ascribed to profit taking since Abbott, like other health-care companies, is in a growth industry while other industries struggle.
Shares of Abbott fell 56 cents, to $51.35, on the New York Stock Exchange.
Once again, Abbott's main engine of profit growth was its Humira drug, worldwide sales of which climbed 54 percent, to $878 million, as the company reaped more sales from the injectable medication's increased uses.
Abbott's second-biggest pharmaceutical, the bipolar disorder treatment known as Depakote, recorded an 11.7 percent sales increase, to $365 million, and its third-largest product, the HIV treatment known as Kaletra, rose 17.8 percent, to $353 million, thanks to a new tablet formulation that does not require refrigeration.
Humira, which is used to treat a variety of autoimmune disorders, including the chronic inflammatory disease of the intestines known as Crohn's disease, is what Abbott has long referred to as a product that has a "pipeline" of treatments in one drug.
The boost from Humira's many indications should blunt the impact of likely loss of sales this year from generic competition with other medicines, analysts said.
"Humira received an expanded indication into psoriasis in the quarter, which should support robust sales growth over the near term," said Morningstar analyst Damien Conover in a note Wednesday. "We expect further generic problems later in the year as neurology drug Depakote loses patent protection. However, a modified-release version of Depakote with longer patent protection should mitigate the generic erosion."
All told, Abbott's global pharmaceutical sales rose 14.3 percent, with U.S. sales up a modest 3.6 percent and global salesùhelped by favorable currency-translationùup a hefty 25.1 percent.
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