Dive Brief:
- Abbott named current COO Robert Ford its new CEO Wednesday, ushering in the first new chief executive in 21 years. He will become the 13th CEO in the company's 131-year history.
- CEO Miles White will retain his title as executive chairman of the board. White will step down as CEO March 31, 2020, after a tenure that saw the company's acquisitions of St. Jude Medical and Alere in 2017, and its 2013 spinoff of Abbvie, as well as its acquisition of the blockbuster arthritis drug Humira.
- Analysts were largely bullish on the announcement and expected a smooth transition.
Dive Insight:
Among White's highlights during his tenure was Abbott’s Freestyle Libre continuous glucose monitoring system for diabetes, which brought in $496 million in global revenues in the latest quarter.
Along with the company's catheter-based alternative to open heart surgery, MitraClip, and the blood and plasma diagnostic screening system Alinity, the three products have been growth drivers for the company.
"Given our optimism for ABT's current strategy and the multiyear growth that should come from products such as Libre, MitraClip and Alinity, we reiterate our Outperform rating," Cowen analysts said after the transition announcement. "Given Mr. White's success in the CEO role, Mr. Ford obviously inherits a valuable blueprint to follow, which lessens the risk of the transition."
Analysts saw little downside to the executive transition. Ford was appointed president and COO in October 2018, with White himself calling the appointment "obviously a succession step" last year.
"It was pretty clear he was being tapped to take over the job," Raj Denhoy, a Jefferies analyst, told MedTech Dive.
Ford joined Abbott in 1996, originally in Abbott's diabetes care business. He also served as executive vice president of medical devices and oversaw the $5.3 billion acquisition of St. Jude Medical. He then led Abbott's diabetes care business and oversaw the launch of FreeStyle Libre.
But White will be a difficult act to follow, Denhoy said. "Clearly, it's been a good run; if you just look over the last 10 years with the spinning off of AbbVie, the acquisitions of St. Jude and Alere and the growth acceleration we've seen over the last couple of years, it'd be hard to overstate his success."
The challenge for Ford will be continuing to deliver top-tier returns, Denhoy said.
