2007 was a pretty good year for American drug companies selling drugs overseas. The dropping dollar helped a lot, but for Abbott Laboratories
Abbott did so well, in fact, that non-U.S. sales for 2007 were slightly larger than U.S. sales for the first time in the company's history. It's not like sales at home were slumping either; for the year, U.S. sales were up 12%.
Revenues were mostly bolstered by the company's top seller, anti-inflammatory drug Humira, which increased sales 50% year over year. Meanwhile, bipolar treatment Depokate, HIV treatment Kaletra, and Abbott's TriCor medicine -- to lower blood fats called triglycerides -- also contributed double-digit growth.
The drugmaker even ensured a little diversity in its sales growth leading into 2008; nutritional product sales, which include the meal replacement shake Ensure, grew 11% year over year in the fourth quarter.
Abbott will continue to rely on Humira for top-line growth in 2008. Sales growth will slow a little, but the drugmaker still expects Humira sales to be around $4 billion this year. A lot of that growth will come from its label expansion into plaque psoriasis, where it will compete against Amgen
The other real growth story for Abbot this year, which should help it reach its goal of about 13%-14% EPS growth (excluding one-time items), will be in drug-eluting stents. Assuming the FDA approves the Xience V drug-eluting stent this year -- and I don't see why it wouldn't -- it's going to be an interesting battle. The newcomer will be looking to steal market share from entrenched leaders like Johnson & Johnson
If Abbott can keep up its double-digit growth on top of its more than 2% dividend yield, this four-star CAPS stock looks to be a good buy -- with or without a falling dollar.
