Skip to main content
Premium Trial:

Request an Annual Quote

Abbott Focusing on Base Business Recovery, but COVID-19 Testing Remains Crucial Revenue Source

Premium

NEW YORK – Abbott's diagnostics business has been bolstered over the past two years by astronomical COVID-19 testing-related sales, to the tune of doubling or tripling revenue growth in some divisions.

But as the pandemic continues to move toward an endemic state with the increasing prevalence of vaccines, the company is making sure to keep the rest of its business active.

On a conference call to discuss the company's Q1 financial results, Abbott CEO Robert Ford outlined multiple steps the firm is taking to maintain its leadership position within the core laboratory, molecular diagnostics, and rapid and point-of-care diagnostics businesses. While the company logged $3.3 billion in COVID-19 related sales in the first quarter, making up a significant portion of diagnostics sales, the segment also saw 12 percent growth excluding those sales, driven largely by the continued rollout of Abbott's Alinity platform and the expansion of test menus across multiple instrument platforms, Ford said.

The Alinity brand, which began its multi-year rollout in 2016, includes Alinity CI-series, an integrated clinical chemistry and immunoassay instrument that also encompasses Alinity C, a clinical chemistry system and Alinity I, an immunoassay system; Alinity H-series, which includes Alinity HQ for hematology and Alinity HS for slidemaker staining; Alinity S for blood and plasma screening; and Alinity M, a high-throughput molecular instrument. The firm also offers its point-of-care i-Stat Alinity system and Alinity Pro, a web-based informatics tool. 

According to Ford, Abbott has been able to both maintain its existing customer base and gather new market share with the Alinity platform. The sales team is "not just defending the base" but also adding new customers that are "up for grabs." Abbott has been able to keep about 9 out of 10 existing accounts and has a "win rate" of more than 50 percent for new customers, he said. "When you think about that math … that's what ultimately drives our top-line growth."

While the pandemic has slowed down overall instrument renewals across the industry as many hospitals have focused entirely on dealing with COVID-19, Ford said there's "plenty more to come."

But placing instruments is only half the battle, he said. To keep customers coming back, the company must continue expanding its menus and getting customers to use those tests. "Everything we can do to be able to add new menus, new tests, etc., is accretive from both a top and a bottom line."

The research and development team, in particular, has been focused on adding menus in a way that is "concurrent to … this placement strategy that we have with the new systems."

As for Abbott's ID Now point-of-care platform, which has contributed significantly to COVID-19 testing-related sales, the firm is also working on menu expansion. At the start of the pandemic, the firm had 20,000 ID Now instruments placed globally — that number has increased fivefold, Ford said. That growth is an opportunity to offer more panels and different tests to an instrument that has already been deployed in the market, he said.

Across its business, the company is making investments in increasing test menus and expects the base business to strongly grow this year and beyond. Ford did not, however, disclose what types of tests will be rolled out.

In conjunction with its strategy to grow out its base business, Abbott also continues to see COVID-19 testing as an important source of revenues. Although the number of cases in the US dropped in February as the Omicron surge that began at the end of 2021 started to recede, Abbott still had a "really strong quarter regarding testing," Ford said. He noted that there are likely more cases than are being reported due to the use of at-home tests — a market Abbott has a significant presence in with its BinaxNow test in the US and PanBio test internationally. As the world moves toward an endemic state, the focus will be more on surveillance and screening. 

Abbott's BinaxNow at-home product has maintained its "preferred status" in the US despite the advent of other tests coming into the US, he said, and the company is confident that testing will continue to play a role even once COVID-19 becomes endemic. Going into next year, the firm expects the COVID-19 portion of its testing business will more resemble trends with the company's influenza and respiratory illness testing segments, but that it will still be important "as we continue to grow earnings," he said.

Internationally, the company is also still seeing a large demand for its tests. Half of COVID-19 testing-related sales in March came from the international market, largely from governments that were investing in testing coming to Abbott as a preferred supplier, Ford said.

"I think we're in probably the strongest position to be able to capitalize and lead in that market," Ford said. "And then our base business is going to do very strongly next year with all the investments we've made and [the] new product pipeline that we've got."