Abbott to close plant as market shifts

Abbott Laboratories announced Tuesday plans to cut 1,200 manufacturing jobs and shutter an Irish plant in an attempt to turn around its vascular business.

Abbott will close Mervue, a vascular products factory in Galway, Ireland, where it will lay off about 500 employees, spokesman Scott Stoffel said. Another 700 employees at a similar facility in Temecula, Calif., face layoffs, he said.

Both plants make stents and catheters used in percutaneous coronary interventions, or PCIs, procedures that unclog arteries.

"We've made these changes as a result of over capacity due to significant improvements in manufacturing efficiencies, current market conditions and the reductions in PCI procedures," Stoffel said.

Libertyville Township-based Abbott did not give a timeline for the layoffs or plant closure. Stoffel said the financial impact will be disclosed in the company's fourth-quarter earnings report in January.

Abbott is awaiting a decision by U.S. regulators on whether to approve Xience, a new generation of drug-coated stents.

Also on Tuesday, Sutura Inc., a California-based medical device company, announced it reached a settlement in a patent infringement lawsuit it filed against Abbott in December 2006.

Under the settlement, Abbott agreed to pay Sutura $23 million and enter a cross-licensing deal in which the companies will share patent rights relating to vascular and cardiovascular suturing.

Abbott shares rose 49 cents, less than 1 percent, to $57.50 in New York Stock Exchange composite trading.

Abbott's third-quarter sales in its vascular division grew nearly 15 percent to $403 million, about $35 million below consensus estimates. Abbott representatives blamed the lower-than-anticipated growth on a decline in PCIs.

The vascular division's operating loss grew to $52 million in the third quarter from $22 million a year earlier, company filings show.

In a research note released in October, Morgan Stanley analyst Glenn Reicin in New York noted Abbott's non-stent vascular business "looked weak."

"The carotid stenting market is getting more competitive and total PCIs are under pressure," Reicin wrote.