Zacks Industry Outlook Highlights: Johnson & Johnson, Hologic, Abbott Laboratories, AbbVie and Quest Diagnostics

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Jan 30, 2013, 09:30 ET

CHICAGO, Jan. 30, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Medical Technology, including Johnson & Johnson (NYSE:JNJ), Hologic (Nasdaq:HOLX), Abbott Laboratories (NYSE:ABT), AbbVie (NYSE:ABBV) and Quest Diagnostics (NYSE:DGX).

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A synopsis of today's Industry Outlook is presented below. The full article can be read at

Link: http://www.zacks.com/commentary/25607/medtech-industry-stock-outlook-jan-2013

We are in the midst of the fourth quarter earnings season and it is once again time to review the players in the worldwide medical devices market. The US still holds the leading position with almost one-third of the market share. However, emerging economies like Brazil, Russia, India and China – collectively known as the BRICs – are fast coming up in the medical devices space and are attracting a lot of attention.

These emerging economies are seeing an increasing uptake of medical devices due largely to growing medical awareness and economic prosperity. Expansion in emerging markets, especially those with double-digit annual growth rates, represents one of the best potential avenues for growth in 2013 and beyond.

On the flip side, the MedTech industry is currently plagued by several issues including the 2.3% medical device excise tax, pricing concerns, hospital admission and procedural volume pressures, Medicare reimbursement issues and regulatory overhang. Percutaneous intervention (angioplasty) volumes continue to be relatively flat in the US, Japan and Europe, with improvement not expected anytime soon.

In spite of several uncertainties resulting in constrained capital spending, the past year also witnessed significant M&A deals including acquisitions of Switzerland-based Synthes Inc. by Johnson & Johnson (NYSE:JNJ) for a whopping $19.7 billion, Gen-Probe Inc. by Hologic (Nasdaq:HOLX) for $3.8 billion andothers.

Another trend that we have been observing of late is the divestment of non-core business segments. For example, in early January, Abbott Laboratories (NYSE:ABT) separated its research-based pharmaceuticals business by creating a new company, AbbVie (NYSE:ABBV), to allow the two separate entities to perform in a more focused manner.

In January, diagnostic testing company Quest Diagnostics (NYSE:DGX) divested its OralDNA Labs salivary-diagnostics business to Access Genetics. The sale of the company's HemoCue diagnostic products business is also in the works. This would enable the company to refocus its attention on its core diagnostic information services. Moreover, Johnson & Johnson is currently looking for opportunities to sell or spin off its Ortho Clinical Diagnostics business.

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