Is the billion-dollar COVID-19 testing sales boom over?
That’s what Abbott Laboratories ABT, -0.91% is predicting now as sales in its COVID-19 testing franchise have started to drop off and amid speculation about when SARS-CoV-2 will become endemic, meaning the virus is no longer as disruptive to the health system and to daily life. The company said Wednesday it expects to bring in $500 million in COVID-19 test sales in the final three months of the year, for a total of $7.8 billion in sales in 2022.
“We haven’t really planned for a big winter surge,” Abbott CEO Robert Ford said on an earnings call. “It’s more of an endemic-like forecast for Q4, and I think that’s the kind of endemic forecast that we’ll see going into 2023.”
Over the course of the pandemic, Abbott became a leader in the COVID-19 test market, selling both the diagnostics used by healthcare providers and at-home tests like the popular BinaxNow tests you can buy at drugstores. The omicron surge last winter propelled interest and sales of the tests you can take at home, fueling $3.3 billion in sales of its COVID-19 tests in the first quarter of the year; however, in 2022, Abbott attributes lower sales to fewer people getting laboratory-based tests.
Like many of the healthcare companies that made billions of dollars in sales of COVID-19 vaccines, treatments, and tests over the last two years, Abbott is now facing a predictable cliff in sales for its COVID-19 testing franchise. Much of the company’s focus (as well as investor interest) has largely reverted back to the products that don’t have anything to do with COVID-19, like its FreeStyle Libre glucose monitors and its nutrition business, which faced a significant setback this year when the company recalled several baby formulas and a national shortage ensued.
Abbott’s forecast for COVID-19 test sales in the fourth quarter does not include any “significant” government contracts, but the company told investors it is capable of responding if and when there is a surge in cases.
“If there is a surge and if governments realize that they do need to procure more testing, we’ve got the product, we’ve got the reliability of the product, and we’ve got the reliability of supply,” Ford said.
Abbott’s stock has tumbled 30.6% this year, while the broader S&P 500 SPX, +0.11% has declined 21.9%.