Abbott Shares Dip After FDA Warning on Glucose Monitors
The alert links certain FreeStyle Libre 3 sensors to over 700 serious injuries and 7 deaths globally, prompting a recall of 3 million devices in the U.S.
Shares of Abbott Laboratories (NYSE: ABT) fell in trading on Friday after the U.S. Food and Drug Administration issued a safety alert for one of the company’s flagship diabetes management products. The stock closed down 1.36% for the day as investors reacted to news that a manufacturing defect in certain FreeStyle Libre 3 glucose sensors has been linked to hundreds of injuries and seven deaths globally.
The FDA published an alert on December 2 warning patients and healthcare providers that some sensors could provide erroneously low glucose readings. Such malfunctions can lead patients to make dangerous treatment decisions, like consuming excess sugar or improperly adjusting insulin doses. According to Abbott's report to the agency, the issue is potentially connected to 736 serious adverse events and seven fatalities worldwide. While 57 injuries were reported in the United States, no U.S. deaths have been associated with the defect.
The news casts a shadow over a critical growth engine for the healthcare giant. Abbott's Diabetes Care division, which includes the popular FreeStyle Libre line, generated $6.8 billion in revenue in 2024, accounting for over 16% of the company's total sales. The unit has been a standout performer, posting organic sales growth of 21.6% in the first quarter of 2025, largely driven by the strong adoption of its continuous glucose monitoring (CGM) systems.
In response to the defect, Abbott has initiated a "medical device correction"—a form of recall—for approximately three million affected sensors in the U.S. The company stated it had identified and resolved the issue, which was traced to a single production line. Abbott began notifying customers, distributors, and healthcare providers on November 24, over a week before the FDA's public alert.
"The cause of the issue, which originated from a single production line, has been identified and resolved," the company noted, ensuring it did not anticipate significant supply disruptions for new or replacement orders. Abbott has established a website where users can check their sensor's serial number to determine if it is part of the recall and request a free replacement.
The recall creates a potential opening for Abbott's primary competitor, Dexcom, in the highly competitive U.S. market for diabetes technology. While Abbott holds a majority of the global CGM market share, Dexcom has maintained a dominant position in the United States. Any erosion of patient or provider confidence in the Libre system's reliability could shift market dynamics.
Analysts maintain a generally positive outlook on Abbott, with a consensus 12-month price target of $144.43, suggesting confidence in the company's diversified business model and long-term growth prospects. However, the immediate focus will be on the company's ability to manage the recall's logistical and reputational fallout efficiently. The financial impact of the recall itself is not expected to be material for a company with a market capitalization of over $218 billion, but the long-term cost to brand trust is yet to be determined.
The FDA has advised users of the affected FreeStyle Libre 3 and FreeStyle Libre 3 Plus sensors to discontinue use immediately and verify treatment decisions with a traditional blood glucose meter if readings seem inconsistent with their symptoms. The agency confirmed the alert does not affect other products in the FreeStyle Libre family, including the Libre 2 and 14-day systems.