Abbott Labs' Absorb Stent Gets Regulatory Approval In U.S.

Abbott Laboratories (NYSE:ABT) received a major boost when the FDA approved its bioresorbable heart stent, Absorb, for the treatment of coronary artery disease in the U.S.

Approximately 15 million people in the U.S. are affected by coronary artery disease, which is a leading cause of death worldwide. Traditional stents are usually made of metal, while Abbott Labs’ Absorb is made of a naturally dissolving material, similar to dissolving sutures. This allows Absorb to disappear completely in approximately three years, having kept a clogged artery open and promoting healing of the treated artery segment. On the other hand, metal stents are permanent implants that restrict vessel motion throughout the rest of the patient’s life. As per the company press release, Absorb is the only fully dissolving stent approved for the treatment of coronary artery disease.

Naturally, an approval for Absorb offers a significant market opportunity to Abbot Labs and also indicates significant progress in the treatment of coronary artery disease.

We note that the Absorb bioresorbable stent had shown comparable short- and mid-term outcomes to Abbott Labs’ metallic drug eluting stent, Xience.

ABBOTT LABS Price and Consensus

ABBOTT LABS Price and Consensus | ABBOTT LABS Quote

The latest approval will strengthen Abbott Labs’ vascular division, which recorded only modest growth in the first quarter of 2016. The stent is already approved in Europe. Abbott Labs is making consistent efforts to boost its Medical Devices business. This April, the company entered into a definitive agreement to acquire St. Jude Medical Inc. (NYSE:STJ) , a premier medical device company with a leading position in heart failure devices, atrial fibrillation and cardiac rhythm management. The acquisition will bolster Abbott’s share in the cardiovascular device market and position the company to compete in nearly every segment of a market that has an aggregate opportunity of $30 billion.

Abbott Laboratories currently carries a Zacks Rank #2 (Buy). A couple of other favorably placed stocks in the healthcare sector include Pfizer Inc. (NYSE:PFE) and Johnson & Johnson (NYSE:JNJ) . Both the stocks carry the same rank as Abbott Labs.