Abbott Laboratories ABT announced that it is collaborating with Omada Health to integrate Abbott’s FreeStyle Libre system with Omada’s revolutionary digital care program. This aims at creating a new paradigm for Type 2 diabetic patients.
Abbott’s management believes that given the positive outcome of FreeStyle Libre, it will be successful in providing a customized treatment, combining Abbott's flagship FreeStyle Libre system, and Omada’s professional coaching and digital platform.
With the partnership, Abbott aims to further consolidate its position in the global continuous glucose monitoring (CGM) technology market.
Few Words on FreeStyle Libre
The FreeStyle Libre system is a CGM device, which is globally used to monitor real-time glucose levels in diabetic patients. It is connected with a secure cloud-based diabetes management system (LibreView), thus obtaining clear and comprehensive health reports.
Rationale Behind the Partnership
Currently, more than 30 million Americans are diabetic, of which approximately 95% have been diagnosed with Type 2 diabetes. These patients look for simple ways to manage their conditions and overall health.
How Does This Work?
Per the agreement, eligible Type 2 diabetic patients will be guided through a personalized experience, which includes an online physician consultation, obtaining a prescription of Freestyle Libre and a welcome kit — including the CGM system and a wireless scale.
The integrated solution to be provided will have the respective company’s mechanisms, which in turn, will be linked to the patient’s smartphones for better health management. The program includes features that will help in tracking and managing the disease.
Abbott collaborated with biopharmaceutical major, Sanofi SNY, in September 2019, where Freestyle Libre will be integrated with glucose sensing and insulin delivery technologies of Sanofi, thus augmenting patient care.
Abbott also received public reimbursement in the two largest provinces of Canada, namely Ontario and Quebec, in September 2019. With the reimbursement approval, FreeStyle Libre became the first sensor-based glucose monitoring system to be listed by any provincial health plan in Canada.
In June 2019, the company was upbeat while announcing a favorable outcome on the analysis on hemoglobin A1c (HbA1c) levels in patients with Type 2 diabetes who are undergoing intensive insulin therapy.
Per a report by Polaris Market Research, the global CGM market size is estimated to reach approximately $1,325.9 million by 2025, seeing a CAGR of 15.8% between 2019 and 2025. The major factors driving growth of the market are the increasing incidences of diabetes around the world and the subsequent awareness about the same.
Given the current market prospects about diabetes management, the collaboration has come at just the right time.
Share Price Performance
The company has gained 12.5% in the past year against the industry’s decline of 2.5%. The S&P 500 index rallied 4.9% during the same period.
Zacks Rank & Stocks to Consider
Currently, Abbott carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the broader medical space are Owens & Minor, Inc OMI and GW Pharmaceuticals PLC GWPH.
Owens & Minor, with a Zacks Rank #1 (Strong Buy), has a projected third-quarter 2019 earnings growth rate of 300%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GW Pharmaceuticals estimates third-quarter earnings growth rate to be 70.2%. It currently carries a Zacks Rank #2 (Buy).
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