Abbott rises after FDA approves Xience V stent

Shares of Abbott Laboratories rose Thursday after regulators approved its drug-coated Xience V stent for sale.

The Food and Drug Administration approved the stent late Wednesday, and Abbott expects it to take between 25 percent and 30 percent of the U.S. drug-coated stent market over the next 12 months. Analysts generally agreed with that estimate, and Goldman Sachs analyst Lawrence Keusch said Xience V will become the most-used stent in 2009.

Abbott shares gained 77 cents to $55.01 in morning trading.

Stents are small wire mesh wire tubes that are used to prop open arteries after surgery. Some stents are coated with drugs to prevent scar tissue from blocking the arteries again. Leading stents include Boston Scientific Corp.'s Taxus and Johnson & Johnson's Cypher.

Clinical trial results showed Xience V was more effective than Taxus in lowering rates of heart attacks. But Citi Investment Research analyst Matthew Dodds thinks some on Wall Street are too optimistic about sales of Xience V. He expects it to take about 21 percent of the market, noting that most analysts are expecting 30 percent to 40 percent.

Leerink Swann analyst Rick Wise said the launch of Xience V will increase Abbott's annual revenue growth rate by about 1 percent, and increase its profit-per-share growth by about 5 percent.

The approval of Xience V means that the Promus stent, which is made by Abbott but marketed by Boston Scientific, will also reach the market. Wise said the launch of Promus will help Boston Scientific cancel out the market share Taxus will lose to Xience V.

Shares of Boston Scientific ticked up 4 cents to $12.45.

Boston Scientific spokesman Paul Donovan said the Taxus Express 2 stent held 52 percent of the U.S. drug-eluting stent market at the end of the first quarter. The company also expects the FDA to approve a new stent, Taxus Liberte, within the next few months.

"We plan to remain the market leader in the drug-eluting stent business," Donovan said.

Taxus Liberte and Xience V both received European approval in 2006.