Companies Proving They're Good for More than COVID-19 Diagnostics
For the past year, Abbott Laboratories and Quest Diagnostics saw their revenue driven by COVID-19 diagnostics, but that seems to be changing as more and more vaccinated individuals are seeking medical advice for non-viral related issues. Both diagnostic and device companies are seeing a rebound in non-COVID-related business.
Citing a note from J.P. Morgan analyst Robbie Marcus, Reuters said the robust quarterly performance for the diagnostics companies is a “positive sign” for the ongoing financial recovery of the medical device industry. And, from the reports of the two diagnostics companies, business appears to be picking up as more and more people are returning to doctor’s offices.
Abbott posted sales growth of 39.5% and organic sales growth of 35% during the second quarter. In its quarterly report, Abbott said sales for the second quarter that exclude its COVID business increased more than 11% over the same pre-pandemic time in 2019. Those same non-COVID sales grew 12.3% over the previous year.
Diagnostics sales increased 62.8 on a reported basis and 57.2% on an organic basis in the second quarter. Global COVID-19 testing-related sales were $1.3 billion for the three months.
Abbott’s medical devices sales increased 51.3% during the quarter. Compared to pre-pandemic sales in 2019, medical devices sales saw an increase of 19.2%. The increase was led by double-digit growth in Electrophysiology, Heart Failure, Structural Heart and Diabetes Care.
Abbott won multiple authorizations for COVID-19 tests, including its 15-minute rapid test that the previous presidential administration heavily touted. Earlier this year, the company’s rapid test became available over-the-counter at Walgreens. The tests can be purchased in-store.
Robert B. Ford, president and chief executive officer of Abbott, expressed excitement about the robust quarterly report. He pointed to the significant increase in non-COVID-related sales compared to pre-pandemic levels. Ford said this “demonstrates the fundamental strength of our performance."
Quest Diagnostics also posted a strong second quarter with revenue of $2.55 billion. That beat analyst forecast of $2.39 billion, MarketWatch reported. Steve Rusckowski, president and CEO of Quest Diagnostics, said the company’s strong performance in the second quarter demonstrated a “faster than expected recovery” in Quest’s base business. Total net income for the quarter was $631 million, up from $185 million 12 months earlier.
“This was the first quarter since 2019 that organic base testing revenues grew in the quarter, driven by contributions from new hospital lab management contracts as well as people returning to the healthcare system,” Rusckowski said in a statement. “We are well-positioned to continue our momentum and support the return to health care in the coming months, which is reflected in the outlook we have provided for the remainder of 2021."
Like Abbott, Quest Diagnostics developed COVID testing products. Since the outbreak of COVID-19 in the U.S., the company has provided approximately 40 million COVID-19 molecular diagnostic tests. In May, Quest partnered with Ginkgo Bioworks to provide COVID-19 testing services to school systems across the nation. Quest said it can provide 300,000 tests a day through its network.