Medical devices will contribute about 27% of Abbott’s (NYSE:ABT) sales after it spins out its research pharmaceuticals unit later this year, CFO Thomas Freyman said today at the J.P. Morgan health care conference in San Francisco.
Abbott announced its plan to split into two publicly traded companies late last year, creating a new entity for the research pharma unit and keeping the Abbott name for the remaining medical products businesses.
Freyman said the tax-free spin-off is expected to happen by the end of the year.
The medical products business, led by current Abbott chairman & CEO Miles White, will consist of 4 divisions, he said: Medical devices, branded generics, medical supplies and nutritionals. It’s expected to throw off high-single-digit sales growth and double-digit earnings growth, according to Freyman.
The flagship Xience drug-eluting stent platform will stay under the Abbott umbrella, he noted, adding that Xience revenues hit an all-time record during the 3rd quarter. Worldwide sales of coronary stents were $521 million for the quarter; Abbott posted profits of $303 million, or 19 cents per share, on sales of $9.82 billion during Q3. That’s a top-line slide of 66.0 percent compared with profits of $891 million, or 57 cents per share, on sales of $8.68 billion.
The devices segment will also keep Abbott’s thriving diabetes business.
“In the U.S. we’re growing faster than any of our competitors in the [diabetes] sector,” Freyman said.