Abbott Eyeing Growth In European Cataract Surgery Market With New Approval
Global healthcare giant Abbott Laboratories (NYSE:ABT) has received CE approval for its TECNIS Symfony extended range of vision intraocular lenses (IOL), used for the treatment of cataract patients who may also have difficulty focusing on close objects. The approval will allow Abbott to sell the product in the European Union as well as some other countries such as Iceland, Switzerland and Norway. The TECNIS Symfony IOL, currently not approved for sale in the U.S., is a unique lens which can provide patients a continuous range of near, intermediate and far distance vision with reduced incidences of halo and glare, the company said in its press release. [1]
Vision care products are a part of Abbott’s Other Medical Devices division and generated $1.1 billion in sales in 2013. Cataract product sales contribute over 65% of the total Vision care revenues and are an important driver for the future growth of the business. The company’s new products including the TECNIS Toric Intraocular Lens in the U.S., the TECNIS OptiBlue Lens in Japan and the new Catalys laser cataract system have been accepted well since their launch, and helped Vision care sales register double-digit growth in emerging as well as developed markets in the first quarter this year. Going forward, we expect the introduction of TECNIS Symfony IOL to further aid the company in maintaining its double digit sales growth in the business with improved sales in Europe. ((Abbott’s CEO Discusses Q1 2014 Results – Earnings Call Transcript, Seeking Alpha, April 16 2014))
We have a price estimate of $40 for Abbott Labs, which is in line with the current market price.
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See our full analysis for Abbott Labs
The Global Cataract Market
The global cataract market is currently valued at around $4 billion and Abbott holds the number two position globally in the cataract lenses segment. [2] A report by Research and Markets suggests that the global cataract market could grow at a CAGR of around 5% over the next five years, with intraocular lenses (IOL) occupying about 85% of the total market. [3] The World Health Organisation expects total cataract surgeries to rise from about 12 million in 2000 to about 32 million by 2020. [4]
Cataract surgeries are expected to consistently grow in the near future because of the growing elderly population as well as new and advanced technologies. The increase in government spending on healthcare, especially in emerging markets such as China and India, is also likely to contribute to this growth. The adoption of IOLs in emerging markets is slowly gaining steam as more people get access to advanced healthcare and better technologies at affordable costs. Considering that the company specializes in IOL devices and is consistently innovating and introducing new products, we expect Abbott’s cataract product sales to continue to grow faster than the market in the near to medium term.
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Notes:- Press Release, Abbott, June 24 2014 [↩]
- Abbott (ABT) Presents at William Blair 34th Annual Growth Stock Conference (Transcript), June 11 2014 [↩]
- Cataract Surgery Devices Market to 2019, Research&Markets, Aug 2013 [↩]
- WHO Blindness Vision 2020 [↩]