Abbott Labs' (NYSE:ABT) investors and the Rolling Stones something in common: Neither seems to be able to get satisfaction. Investors worry about how Abbott's Humira is such a large fraction of the company's revenue, and then when the company turns in a nice quarter even without strong U.S. sales of Humira, they complain about that.
The company beat analysts' sales and earnings estimates in the fourth quarter, but is down nearly 2% today. Yep, no satisfaction here.
Humira has had a nice run against Johnson & Johnson (NYSE:JNJ) and Merck's (NYSE:MRK) Remicade, and against Amgen (NASDAQ:AMGN) and Pfizer's (NYSE:PFE) Enbrel, but it's facing additional competition from new anti-inflammatory drugs like Johnson & Johnson's Simponi and Stelera. The drug is still growing well overseas -- up 40% at constant currencies -- but only posted a 3% U.S. increase in the fourth quarter. Sure, it was a tough comparison because of such a strong year-ago quarter. It's clear, however, that Humira's growth is slowing -- this year the company is looking for global sales to grow 20% compared to 28% growth at constant currencies last year.
Still, the company posted a mighty fine quarter. Revenue grew 11% with help from Abbott's acquisition of Advanced Medical Optics and its relatively new drug eluting stent Xience, which continues to see double-digit sales growth and has the top spot over rivals Boston Scientific (NYSE:BSX), Johnson & Johnson, and Medtronic (NYSE:MDT) both here and in Europe.
The company will continue to diversify this year when it closes its acquisition of Solvay, which will add $3 billion in sales. The new drugs and Humira, which isn't dead yet, is expected to help Abbott turn in a solid 13.5% increase in adjusted earnings per share at the midpoint of its $4.20 to $4.25 guidance.
If Abbott continues to hit that kind of growth, year after year, with or without Humira, investors should be very satisfied.
