Omor Ibne Ehsan
3 min read
In This Article:
Wearables, or electronic devices worn to collect health-related data, are fast becoming a public health priority. U.S. Health and Human Services Secretary Robert F. Kennedy Jr. told Congress that HHS will launch one of the largest advertising campaigns in its history to get wearables and continuous glucose monitors (CGMs) onto every wrist and arm in America.
Stocks of companies that sell these devices have seen a surge following his commentary. Abbott Laboratories (ABT) and DexCom (DXCM), in particular, have benefitted. Both firms were already darlings of Wall Street thanks to consistent double-digit revenue growth. Kennedy’s Make America Healthy Again (MAHA) push now constitutes a significant bull case that, if successful, may pull millions of new users into the wearables ecosystem. In turn, these users would add significantly to the top and bottom lines of Abbott and DexCom.
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This push to promote wearables is due to the argument that catching and screening diseases early would put less strain on the healthcare sector in the long run. Proponents also believe that wearables promote healthier overall lifestyles.
Abbott already dominates the global CGM market with its FreeStyle Libre platform. The company also offers Lingo, an over-the-counter CGM that targets general consumers outside of its Diabetes Care segment.
In the first quarter, Abbott reported total Medical Devices revenue of $4.9 billion, up 12.6% year over year. Its Diabetes Care sales within that segment were $1.7 billion, up 21.6% annually. Management continues to target $10 billion in annual sales related to Libre devices by 2028.
Supporting the broad appeal and benefits of its wearables, in May, Abbott reported positive results from its REFLECT real-world studies, which found that its CGM tech “helps significantly reduce the risk of hospitalization for heart complications in people with diabetes.”
With support from MAHA proponents and the HHS, these sales figures could get a boost. Abbott Laboratories could also gain significant pricing power if the HHS chooses to subsidize its wearables.
