It's an earnings kind of day in the pharma world, with industry-watchers searching the entrails of third-quarter reports for harbingers of the future. And when Abbott Laboratories released its latest numbers, the signs seemed favorable. For diversified pharma companies, that is.
You see, Abbott's numbers may have outshone the results Johnson & Johnson posted earlier this week, but in both cases, declining pharma sales were buoyed by increases in other units. And in both cases, those pharma sales figures suffered on generic competition. We'll let you look back at our J&J coverage for details there, but here's the story on Abbott.
The company boosted third-quarter profit by 37 percent to $1.48 billion on sales growth, cost cuts and a gain from a settlement with device rival Medtronic. Revenues grew, too, by 3.5 percent (and would have increased by 8.4 percent without negative currency effects). But prescription drug sales lagged by 1.6 percent, to $4.1 billion. Wait, you say, Abbott shares led drug stocks higher precisely because of strong growth in Humira sales. Yes, but new generic rivals to Depakote cut into those gains.
Apparently, then, diversification is good for drugmakers. The numbers don't lie. So what happens this quarter with drugmakers that aren't so diversified?