ABBOTT PARK, Ill. - Abbott Laboratories (NYSE: NYSE:ABT) has entered into a global partnership with Medtronic (NYSE:MDT) to develop a continuous glucose monitoring (CGM) system that will work with Medtronic's insulin delivery systems. The collaboration aims to integrate Abbott's FreeStyle Libre technology with Medtronic's automated insulin delivery (AID) and smart insulin pen systems.
The new CGM sensor, which Abbott will develop to be compatible exclusively with Medtronic devices, is designed to enable automatic insulin adjustments to help maintain optimal glucose levels. This system is intended to alleviate the constant decision-making burden for people with diabetes who rely on intensive insulin therapy.
The partnership is set to benefit over 11 million people globally who require multiple daily injections of rapid-acting insulin to manage their Type 1 or Type 2 diabetes. However, the financial terms and the expected date for the product's commercial availability were not disclosed.
Jared Watkin, Executive Vice President of Abbott's diabetes care business, highlighted the union of two leaders in the field of glucose sensing and insulin delivery, emphasizing that the Libre technology is recognized for its accuracy and reliability. Watkin expressed that the partnership is a step towards simplifying diabetes management and allowing patients to focus less on their condition.
Que Dallara, Executive Vice President and President of Medtronic Diabetes, echoed the sentiment, stating the collaboration would expand access to advanced diabetes management systems and ease the transition to automated technology.
Abbott's Libre systems are widely used, with over 6 million users in more than 60 countries. The technology has been shown to improve glucose control, reduce HbA1c levels, decrease hospital admissions related to diabetes, and enhance the quality of life for those with diabetes.
This partnership is part of Abbott's ongoing efforts to improve diabetes care by offering a variety of insulin administration options through collaborations with other insulin delivery companies.
The information in this article is based on a press release statement.
In other recent news, Abbott Laboratories has been under the spotlight due to several recent developments. The company came under fire following a $495 million jury verdict related to its infant formula for premature babies. The jury found that Abbott's specialized formula contributed to the development of severe bowel disease in an infant, a verdict that Abbott plans to appeal.
Additionally, nearly 1,000 lawsuits have been filed against Abbott and British company Reckitt Benckiser (LON:RKT), alleging that they failed to adequately warn healthcare providers of the increased risks of the disease when using their formula.
In the financial realm, Abbott has reported robust second-quarter earnings and revenue results, with earnings per share (EPS) of $1.14 surpassing expectations. The company's revenues of $10.38 billion were primarily driven by the Medical Devices segment. In response to these strong results, Abbott's full-year revenue guidance has been updated to an organic growth range of 9.5%-10%, and its EPS guidance has been raised to $4.61-$4.71 from the previous $4.55-$4.70 range.
On the analyst front, UBS, Evercore ISI, Citi, and TD Cowen have maintained positive outlooks on Abbott. UBS reaffirmed its Buy rating on Abbott Laboratories, maintaining a price target of $143.00 per share. Evercore ISI and Citi reiterated Outperform and Buy ratings, respectively. TD Cowen also maintained its Buy rating, citing expectations of strong second-quarter results.
In terms of product development, Abbott announced its 402nd consecutive quarterly dividend of 55 cents per share and received FDA clearance for two new over-the-counter continuous glucose monitoring systems, Lingo and Libre Rio.
InvestingPro Insights
As Abbott Laboratories (NYSE: ABT) forges a strategic alliance with Medtronic, investors and industry watchers are closely monitoring the company's financial health and market position. Abbott's commitment to innovation in diabetes care is reflected in its FreeStyle Libre technology, which is set to be integrated with Medtronic's systems. This collaboration could further cement Abbott's standing as a prominent player in the Healthcare Equipment & Supplies industry, a status underscored by the company's consistent dividend payouts over 54 years.
From a financial standpoint, Abbott's market capitalization of approximately $190.52 billion illustrates its substantial presence in the market. With a P/E ratio of 34.63 and a slightly lower adjusted P/E ratio of 32.13 for the last twelve months as of Q2 2024, the company is trading at a high earnings multiple, which may indicate high investor expectations for future earnings growth. Despite a modest revenue growth of 1.24% over the last twelve months as of Q2 2024, Abbott has maintained a robust gross profit margin of 55.47%, reflecting efficient operations and a strong market position.
InvestingPro Tips highlight that Abbott has raised its dividend for 10 consecutive years, signaling confidence in its financial stability and commitment to rewarding shareholders. Additionally, the company's stock is known for low price volatility, which might appeal to investors looking for stable returns. For those seeking deeper analysis and more comprehensive insights, InvestingPro offers 9 additional tips on Abbott Laboratories, available at: https://www.investing.com/pro/ABT.
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