Abbott Labs Will Get Bigger With Freestyle Libre Flash Approval In The U.S.

The U.S. FDA recently approved Abbott Labs’ (NYSE:ABT) new blood glucose monitoring system – Freestyle Libre Flash. While this is a meaningful development for the company, it was expected. Abbott already markets the device in Europe and Canada, and it was largely just a matter of time before it received FDA approval. The company attributed a significant chunk of the 25% growth in its international diabetes care sales in Q2 2017 to the adoption of Freestyle Libre. The launch in the U.S. could help sustain the momentum that Abbott’s diabetes care segment has seen this year. Earlier this year at the Advanced Technologies and Treatments for Diabetes conference, the company presented data from more than 50,000 Freestyle Libre users in Europe which showed that the users are checking their glucose levels more than 16 times a day. This is significantly higher than the frequency for other monitoring systems, and is primarily due to the fact that Freestyle Libre Flash does not require finger pricking. With more frequent monitoring being associated with better health outcomes for diabetes patients, we expect strong demand for the device in the U.S.

The total market for blood glucose monitoring devices is expected to reach nearly $12 billion by 2020. This will be driven by the growing incidence of diabetes, especially in the Asia Pacific region. However, the U.S. will continue to command a lion’s share of the overall market, which puts the current approval in perspective. Abbott is already a leading player in this market, and we expect its latest product to spur growth of point-of-care measuring devices, which is generally where healthcare monitoring is headed.

Our price estimate of $45 for Abbott Laboratories is slightly below the market.

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