Third quarter 2009 financing results from Abbott and Baxter were made public this week. Baxter’s 3Q profit rose 12%. Abbott Labs’ 3Q profit rose 37% (coming at the expense of Medtronic in a patent dispute settlement). Boston Scientific’s 2Q profit at mid-year were up 61%. Meanwhile, smaller medtech companies (see WSJ’s Turning out the Lights) have not fared so well. The facts once again reveal these truths:
- Well established medtech companies with existing product lines have demonstrated that their product lines and operations have been more than adequate to sustain them through the likely worst of the recession
- Small medtech companies, without the reserves and cashflows of big medtech, have frequently this year been unable to continue.
The Dow Jones Industrial Index crossed 10,000 this week, for the first time since 2008. Conventional wisdom has it that the index precedes changes in employment and economic recovery in general by as much as ten months.
It is difficult to accept (not understand, which is different) that there remains such an enormous gap between Wall Street and the broader economy, or that so many small companies, whose innovation is considered so vital to growing economies, do not survive long enough to do play that role.