COVID earnings

COVID earnings

Before we begin our comments on Abbott’s earnings released this morning a shout out to the diabetes industry and their efforts to help patients during this difficult time. Just this morning Insulet announced a financial assistance program offering a FREE 6-month supply of pods for patients who have been adversely impacted by the crisis. Insulet joins Novo Nordisk, Lilly and others who have offered either FREE drugs and/or devices. The business of diabetes may be about money, but it is great to see these companies put the patient ahead of profits during this difficult time.

One more thing before we get going and not be Captain Obvious but we’re all going to have get used to this statement which was included in the Abbott earnings announcement;

“Due to uncertainties regarding the duration and impact of the coronavirus (COVID-19) pandemic, Abbott is suspending its previously announced annual guidance for 2020.”

As we have noted many times the true impact of the coronavirus likely won’t rear its ugly head until company’s announce second quarter results. Just this morning the Labor Department announced another 5.245 million Americans filed for unemployment bring the total up to slightly over 22 million since the crisis began. There is no question first quarter results have been impacted but the full extent of the damage won’t be seen until second quarter results.

Ok now we can get onto the numbers which really weren’t that bad per the press release;“In Diabetes Care, growth was led by FreeStyle Libre, with worldwide sales of more than $600 million in the quarter, an increase of 59.3 percent on a reported basis and 62.5 percent on an organic basis versus the prior year.”

As anticipated sales Ex-US led the way producing $566 million while US sales came in at respectable $186 million. This is almost the exact opposite of what Dexcom will report later in the month with US sales dwarfing EX-US sales. It’s almost as if Abbott has staked out EX-US and Dexcom domestic as their respective territories. We know this isn’t the case with each is trying to make inroads into the others stronghold, but it also points to the continued strength in the global CGM market. Simply put the CGM market continues to grow like a weed.

Not surprisingly the Q&A portion of the call was dominated by COVID questions with a few Libre questions sprinkled in but nothing of substance was noted. About all we can say about Libre2 is the company noted they are beginning to the role the product out overseas but no update on the status of Libre2 here in the US. Given the current environment at the FDA it’s unlikely Libre2 will receive approval in 2020, yes, it’s possible but we wouldn’t bank on it.

Right now and for the near term it will be status quo for Libre and Libre2 which given the crisis isn’t a bad thing.