Press Release
Abbott Reports Double-Digit Sales and Earnings Growth in Fourth Quarter; Issues Strong Earnings Outlook for 2010
– Worldwide Sales Increased 10.6 Percent –
– Adjusted EPS Growth of 11.3 Percent (GAAP EPS Growth of 10.1 Percent) –
– Worldwide Medical Products Sales Increased 23.4 Percent –
– International Nutritional Sales Increased 11.0 Percent –
– International Pharmaceutical Sales Increased 22.1 Percent –
More information regarding Abbott's Investor Relations
resources:
January 27, 2010
Abbott Park, Illinois (NYSE: ABT)
— Abbott today announced financial results for the fourth quarter ended Dec. 31, 2009.
- Diluted earnings per share, excluding specified items, were $1.18,
reflecting 11.3 percent growth, at the high end
of Abbott's previous forecast. Diluted earnings per share under Generally
Accepted Accounting Principles (GAAP) were $0.98, up 10.1 percent.
- Worldwide sales increased 10.6 percent to nearly $8.8 billion, including a
favorable 2.4 percent effect of exchange rates.
Excluding the expected decline in Depakote® sales due to generic competition,
worldwide reported sales increased 12.7 percent. Full-year 2009 sales were
$30.8 billion.
- Worldwide pharmaceutical sales increased 5.2 percent, including a favorable
2.5 percent effect of exchange rates. Excluding
the impact of Depakote, worldwide pharmaceutical sales increased 8.9 percent. International pharmaceutical sales
increased 22.1 percent, including a favorable
5.6 percent effect of exchange rates.
- Worldwide medical products sales increased 23.4 percent, including a
favorable 3.2 percent effect of exchange
rates.
- Worldwide nutritional sales increased 8.8 percent, including a favorable
0.9 percent effect of exchange rates.
- Abbott is issuing ongoing earnings-per-share guidance for the full-year
2010 of $4.20 to $4.25, excluding specified items.
"Abbott's 2009 results demonstrated the sustainable strength and balance
of our broad-based businesses," said Miles D. White, chairman and chief
executive officer, Abbott. "We took decisive long-term strategic actions in
2009 to ensure our strong results continue for years to come. As a result,
we're positioned to deliver another year of top-tier performance in
2010."
The following is a summary of fourth-quarter 2009
sales.
Quarter Ended 12/31/09
(dollars in millions) |
|
% Change vs. 4Q08 |
| |
Sales |
Operational |
Foreign
Exchange |
Reported |
| Total Sales |
$8,790 |
8.2 |
2.4 |
10.6 |
| Total International Sales |
$4,756 |
16.7 |
4.8 |
21.5 |
| Total U.S. Sales |
$4,034 |
. . .a |
. . . |
. . . |
| Worldwide Pharmaceutical Sales |
$4,849 |
2.7a |
2.5 |
5.2 |
| International Pharmaceuticals |
$2,528 |
16.5 |
5.6 |
22.1 |
| U.S. Pharmaceuticals |
$2,321 |
(8.6)a |
. . . |
(8.6) |
| Worldwide Nutritional Sales |
$1,433 |
7.9 |
0.9 |
8.8 |
| International Nutritionals |
$733 |
9.3 |
1.7 |
11.0 |
| U.S. Nutritionals |
$700 |
6.6 |
. . . |
6.6 |
| Worldwide Diagnostics Sales |
$975 |
4.9 |
3.9 |
8.8 |
| International Diagnostics |
$727 |
4.1 |
5.3 |
9.4 |
| U.S. Diagnostics |
$248 |
7.1 |
. . . |
7.1 |
| Worldwide Vascular Sales |
$723 |
6.5 |
2.6 |
9.1 |
| International Vascular |
$309 |
9.3 |
6.4 |
15.7 |
| U.S. Vascular |
$414 |
4.6 |
. . . |
4.6 |
| Other Sales |
$810b |
72.6 |
2.0 |
74.6 |
| Note: |
See "Consolidated Statement of Earnings" for more information. |
| a |
Sales comparison reflects the expected impact of generic Depakote
competition. See Q&A Answer 1 for further discussion. |
| b |
Includes the acquisition of Advanced Medical Optics, which closed on Feb.
25, 2009. |
The following is a summary of full-year 2009 sales.
Twelve Months Ended 12/31/09
(dollars in millions) |
|
% Change vs. 12M08 |
| |
Sales |
Operational |
Foreign
Exchange |
Reported |
| Total Sales |
$30,765 |
8.2 |
(4.0) |
4.2 |
| Total International Sales |
$16,545 |
15.3 |
(7.6) |
7.7 |
| Total U.S. Sales |
$14,220 |
0.4a |
. . . |
0.4 |
| Worldwide Pharmaceutical Sales |
$16,486 |
2.9a |
(4.2) |
(1.3) |
| International Pharmaceuticals |
$8,692 |
14.4 |
(8.6) |
5.8 |
| U.S. Pharmaceuticals |
$7,794 |
(8.3)a |
. . . |
(8.3) |
| Worldwide Nutritional Sales |
$5,284 |
10.1 |
(2.8) |
7.3 |
| International Nutritionals |
$2,648 |
14.0 |
(5.7) |
8.3 |
| U.S. Nutritionals |
$2,636 |
6.3 |
. . . |
6.3 |
| Worldwide Diagnostics Sales |
$3,578 |
5.1 |
(5.0) |
0.1 |
| International Diagnostics |
$2,639 |
5.3 |
(6.7) |
(1.4) |
| U.S. Diagnostics |
$939 |
4.4 |
. . . |
4.4 |
| Worldwide Vascular Sales |
$2,692 |
23.1 |
(3.0) |
20.1 |
| International Vascular |
$1,093 |
12.0 |
(6.5) |
5.5 |
| U.S. Vascular |
$1,599 |
32.7 |
. . . |
32.7 |
| Other Sales |
$2,725b |
34.9 |
(3.8) |
31.1 |
| Note: |
See "Consolidated Statement of Earnings" for more information. |
| a |
Sales comparison reflects the expected impact of generic Depakote
competition. |
| b |
Includes the acquisition of Advanced Medical Optics, which closed on Feb.
25, 2009. |
The following summarizes the impact of foreign exchange
on global sales for selected products
Quarter Ended 12/31/09
(dollars in millions) |
|
Global Sales
% Change vs. 4Q08 |
| |
Global
Sales |
Operational |
Foreign
Exchange |
Reported |
Pharmaceutical Products |
| HUMIRA |
$1,662 |
19.7 |
3.3 |
23.0 |
| TriCor/TRILIPIX |
$419 |
(8.0) |
. . . |
(8.0) |
| Kaletra |
$378 |
(1.7) |
1.8 |
0.1 |
| Niaspan |
$254 |
14.9 |
. . . |
14.9 |
| Lupron |
$215 |
(0.2) |
1.4 |
1.2 |
| Synthroid |
$148 |
2.9 |
1.0 |
3.9 |
| Depakotea |
$102 |
(62.2)a |
0.2 |
(62.0) |
Nutritional Products |
| Pediatric Nutritionals |
$786 |
8.2 |
0.4 |
8.6 |
| Adult Nutritionals |
$630 |
9.8 |
1.5 |
11.3 |
Medical Products |
| Core Laboratory Diagnostics |
$820 |
2.3 |
4.2 |
6.5 |
| Coronary Stents |
$430 |
2.4 |
2.4 |
4.8 |
| Diabetes Care |
$332 |
(4.0) |
2.7 |
(1.3) |
| Medical Optics |
$317 |
n/m |
n/m |
n/m |
| Molecular Diagnostics |
$94 |
29.2 |
3.4 |
32.6 |
| a |
Sales comparison reflects the expected impact of generic Depakote
competition. |
| n/m |
= Not meaningful |
The following is a summary of Abbott's fourth-quarter
2009 sales for selected products.
Quarter Ended 12/31/09
(dollars in millions) |
|
International |
| |
U.S. |
|
% Change vs. 4Q08 |
| |
Sales |
% Change
vs. 4Q08 |
Sales |
Operational |
Foreign
Exchange |
Reported |
Pharmaceutical Products |
| HUMIRA |
$774 |
3.1a |
$888 |
40.6 |
7.4 |
48.0 |
| TriCor/TRILIPIX |
$419 |
(8.0) |
. . . |
. . . |
. . . |
. . . |
| Kaletra |
$137 |
(9.9) |
$241 |
3.7 |
3.0 |
6.7 |
| Niaspan |
$254 |
14.9 |
. . . |
. . . |
. . . |
. . . |
| Lupron |
$141 |
(3.6) |
$74 |
7.7 |
4.4 |
12.1 |
| Synthroid |
$123 |
2.2 |
$25 |
6.7 |
6.7 |
13.4 |
| Depakoteb |
$75 |
(69.5)b |
$27 |
11.4 |
2.0 |
13.4 |
Nutritional Products |
| Pediatric Nutritionals |
$359 |
7.7 |
$427 |
8.7 |
0.7 |
9.4 |
| Adult Nutritionals |
$324 |
9.5 |
$306 |
10.0 |
3.2 |
13.2 |
Medical Products |
| Core Laboratory Diagnostics |
$159 |
(0.5) |
$661 |
3.0 |
5.3 |
8.3 |
| Coronary Stents |
$261 |
(2.3) |
$169 |
11.5 |
6.8 |
18.3 |
| Diabetes Care |
$126 |
(12.6) |
$206 |
2.4 |
4.7 |
7.1 |
| Medical Optics |
$96 |
n/m |
$221 |
n/m |
n/m |
n/m |
| Molecular Diagnostics |
$42 |
43.3 |
$52 |
19.5 |
5.7 |
25.2 |
| a |
Reflects comparison to prior year when sales increased 42.4 percent. |
| b |
Sales comparison reflects the expected impact of generic Depakote
competition. |
| n/m |
= Not meaningful |
The following summarizes the impact of foreign exchange
on global sales for selected products.
Twelve Months Ended 12/31/09
(dollars in millions) |
|
Global Sales
% Change vs. FY08 |
| |
Global
Sales |
Operational |
Foreign
Exchange |
Reported |
Pharmaceutical Products |
| HUMIRA |
$5,488 |
27.7 |
(6.3) |
21.4 |
| Kaletra |
$1,366 |
(1.5) |
(5.8) |
(7.3) |
| TriCor/TRILIPIX |
$1,337 |
(0.3) |
. . . |
(0.3) |
| Niaspan |
$855 |
8.8 |
. . . |
8.8 |
| Lupron |
$800 |
27.5 |
(4.7) |
22.8 |
| Synthroid |
$502 |
(2.2) |
(2.1) |
(4.3) |
| Depakotea |
$425 |
(67.8)a |
(1.0) |
(68.8) |
Nutritional Products |
| Pediatric Nutritionals |
$2,849 |
10.2 |
(2.4) |
7.8 |
| Adult Nutritionals |
$2,375 |
9.8 |
(3.4) |
6.4 |
Medical Products |
| Core Laboratory Diagnostics |
$3,027 |
3.0 |
(5.3) |
(2.3) |
| Coronary Stents |
$1,618 |
37.9 |
(2.9) |
35.0 |
| Diabetes Care |
$1,242 |
(2.6) |
(5.6) |
(8.2) |
| Medical Optics |
$890 |
n/m |
n/m |
n/m |
| Molecular Diagnostics |
$316 |
22.9 |
(4.6) |
18.3 |
| a |
Sales comparison reflects the expected impact of generic
Depakote competition. |
| n/m |
= Not meaningful |
The following is a summary of Abbott's full-year 2009
sales for selected products.
Twelve Months Ended 12/31/09
(dollars in millions) |
|
|
International |
| |
U.S. |
|
% Change vs. FY08 |
| |
Sales |
% Change
vs. FY08 |
Sales |
Operational |
Foreign
Exchange |
Reported |
Pharmaceutical Products |
| HUMIRA |
$2,519 |
11.7 |
$2,969 |
43.5 |
(12.5) |
31.0 |
| Kaletra |
$446 |
(12.9) |
$920 |
4.5 |
(8.8) |
(4.3) |
| TriCor/TRILIPIX |
$1,337 |
(0.3) |
. . . |
. . . |
. . . |
. . . |
| Niaspan |
$855 |
8.8 |
. . . |
. . . |
. . . |
. . . |
| Lupron |
$540 |
43.2 |
$260 |
5.9 |
(11.2) |
(5.3) |
| Synthroid |
$415 |
(4.5) |
$87 |
9.0 |
(12.1) |
(3.1) |
| Depakotea |
$331 |
(73.8)a |
$94 |
6.1 |
(13.6) |
(7.5) |
Nutritional Products |
| Pediatric Nutritionals |
$1,306 |
3.0 |
$1,543 |
17.0 |
(4.7) |
12.3 |
| Adult Nutritionals |
$1,269 |
9.2 |
$1,106 |
10.4 |
(7.1) |
3.3 |
Medical Products |
| Core Laboratory Diagnostics |
$605 |
(1.9) |
$2,422 |
4.3 |
(6.7) |
(2.4) |
| Coronary Stents |
$1,029 |
53.8 |
$589 |
18.0 |
(6.7) |
11.3 |
| Diabetes Care |
$498 |
(11.0) |
$744 |
3.3 |
(9.6) |
(6.3) |
| Medical Optics |
$337 |
n/m |
$553 |
n/m |
n/m |
n/m |
| Molecular Diagnostics |
$150 |
23.5 |
$166 |
22.4 |
(8.4) |
14.0 |
| a |
Sales comparison reflects the expected impact of generic
Depakote competition. |
| n/m |
= Not meaningful |
Business Highlights
-
Completed Acquisitions of Evalve, Inc. and Visiogen, Inc.
Completed the acquisition of Evalve, Inc., the global leader in the development
of devices for minimally invasive repair of mitral valves. In addition,
completed the acquisition of privately-held eye care company, Visiogen, Inc.,
expanding our vision care business with a next-generation accommodating
intraocular lens (IOL) technology to address presbyopia for cataract
patients.
-
Acquired Novel Biologic to Treat Chronic Pain
We completed the acquisition of global rights to PanGenetics' PG110, a novel
biologic in development for the treatment of chronic pain. This fully humanized
antibody to Nerve Growth Factor (NGF) expands Abbott's early stage pain care
pipeline and leverages our biologics platform. NGF is released at sites of
tissue damage and inflammation, and plays a significant role in the
transmission of pain signals by the central nervous system.
-
Presented Three-Year Bioabsorbable Stent Data at AHA
Announced three-year data from its fully bioabsorbable drug-eluting stent
clinical trial, ABSORB. These results showed that patients experienced no stent
thrombosis out to three years and no new major adverse cardiac events (MACE)
between six months and three years. In addition, Abbott announced a large-scale
trial called ABSORB EXTEND, which will enroll up to 1,000 patients with more
complex coronary artery disease from approximately 100 centers around the
world.
-
Announced Acquisition of STARLIMS Technologies Ltd.
Announced a definitive agreement to acquire STARLIMS Technologies Ltd., a
leading provider of laboratory information management systems. The acquisition
strengthens Abbott's competitive position in the global diagnostics market,
providing advanced web-based software applications to help laboratories
efficiently store, retrieve and analyze clinical, managerial and administrative
data.
-
Announced Regulatory Filing for Simcor® 40mg and Arbiter-6 HALTS Data
Presented at AHA
Announced U.S. regulatory filing for two new 40mg dosage strengths of Simcor,
Abbott's fixed dose combination of niacin extended-release and simvastatin. In
addition, the Arbiter-6 HALTS study, presented at AHA, showed that adding
Abbott's Niaspan to statin therapy resulted in significant carotid
atherosclerosis regression and significantly fewer major adverse cardiac events
(MACE) than ezetimibe (Zetia).
-
Received Approval for Two New HUMIRA® Indications in Japan
Recently received regulatory approval in Japan for two new HUMIRA indications,
psoriasis and psoriatic arthritis. HUMIRA was approved for rheumatoid arthritis
in Japan in 2008. In addition, Abbott has completed regulatory submissions in
Japan for Crohn's disease and ankylosing spondylitis, and review is currently
underway.
-
Received Approval for XIENCE V® in Japan and Mexico
Abbott recently received regulatory approval for XIENCE V in Japan, the second
largest DES market in the world. Xience V was also approved in Mexico in
January. The launches of XIENCE V in Japan
and Mexico are expected to begin shortly. In addition, the COMPARE trial
results were published in The Lancet. These results showed XIENCE V demonstrated superior safety and efficacy
outcomes compared to Boston Scientific's TAXUS® Express drug-eluting
stent.
Abbott issues earnings-per-share outlook for 2010
Abbott is issuing ongoing earnings-per-share guidance for the full-year 2010
of $4.20 to $4.25, excluding specified items. The midpoint of this range
reflects growth of approximately 13.5 percent over 2009, including an
expected February 2010 close of the Solvay Pharmaceuticals acquisition.
Abbott forecasts specified items for the full-year 2010 of approximately
$0.28 per share, primarily associated with previously announced acquisitions
and cost reduction initiatives, as well as the one-time impact of the
devaluation of the Venezuelan Bolivar on translation of the balance sheet.
Including these specified items, projected earnings per share under Generally
Accepted Accounting Principles (GAAP) would be $3.92 to $3.97 for the full-year
2010. This forecast excludes integration costs associated with the Solvay
Pharmaceuticals acquisition, which will be quantified at a later date.
Abbott declares quarterly dividend; double-digit
increase over prior year
On Dec. 11, 2009, the board of directors of Abbott declared the company's
quarterly common dividend of 40 cents per share, an increase of 11 percent over
the prior period. The cash dividend is payable Feb.
15, 2010, to shareholders of record at the close of business on Jan. 15, 2010. This marks the 344th consecutive
dividend paid by Abbott since 1924.
About Abbott
Abbott (NYSE: ABT)
is a global, broad-based health care company devoted to the discovery,
development, manufacture and marketing of pharmaceuticals and medical products,
including nutritionals, devices and diagnostics. The company employs more than
72,000 people and markets its products in more than 130 countries.
Abbott will webcast its live fourth-quarter earnings conference call through
its Investor Relations Web site at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the
call will be available after 11 a.m. Central
time.
Private Securities Litigation Reform Act of 1995 — A
Caution Concerning Forward-Looking Statements
Some statements in this news release may be forward-looking statements for
purposes of the Private Securities Litigation Reform Act of 1995. Abbott
cautions that these forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from those
indicated in the forward-looking statements. Economic, competitive,
governmental, technological and other factors that may affect Abbott's
operations are discussed in Item 1A, "Risk
Factors," to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2008, and are incorporated by reference.
Abbott undertakes no obligation to release publicly any revisions to
forward-looking statements as a result of subsequent events or
developments.
Abbott Laboratories and Subsidiaries
Consolidated Statement of Earnings
Fourth Quarter Ended December 31, 2009 and 2008
(in millions, except per share data)
(unaudited) |
| |
2009 |
2008 |
% Change |
| Net Sales |
$ 8,790 |
$ 7,950 |
10.6 |
| |
| Cost of products sold |
3,784 |
3,178 |
19.1 |
| Research and development |
747 |
732 |
2.1 |
| Acquired in-process research and development |
170 |
. . . |
n/m |
| Selling, general and administrative |
2,225 |
2,297 |
(3.1) |
| Total Operating Cost and Expenses |
6,926 |
6,207 |
11.6 |
| |
| Operating earnings |
1,864 |
1,743 |
6.9 |
| |
| Net interest expense |
94 |
81 |
16.5 |
| Net foreign exchange (gain) loss |
7 |
47 |
n/m |
| Other (income) expense, net |
(60) |
(71) |
(14.8) |
| Earnings from continuing operations before taxes |
1,823 |
1,686 |
8.1 |
| Taxes on earnings from continuing operations |
284 |
296 |
(4.2) |
| Earnings from continuing operations |
1,539 |
1,390 |
10.7 |
| Gain on sale of discontinued operations, net of tax |
. . . |
146 |
(100.0) |
| |
| Net Earnings |
$ 1,539 |
$ 1,536 |
0.2 |
| |
Net Earnings from Continuing Operations Excluding Specified
Items, as described below 1) |
$ 1,845 |
$ 1,655 |
11.5 |
| |
| Diluted Earnings per Common Share from Continuing Operations |
$ 0.98 |
$ 0.89 |
10.1 |
| |
Diluted Earnings per Common Share from Gain on Sale of
Discontinued Operations |
$ . . . |
$ 0.09 |
(100.0) |
| |
| Diluted Earnings Per Common Share |
$ 0.98 |
$ 0.98 |
. . . |
| |
Diluted Earnings Per Common Share from Continuing Operations,
Excluding Specified Items, as described below 1) |
$ 1.18 |
$ 1.06 |
11.3 |
| |
Average Number of Common Shares Outstanding Plus Dilutive
Common Stock Options and Awards |
1,560 |
1,564 |
|
| 1) |
2009 Net Earnings Excluding Specified Items excludes after-tax
charges of $170 million, or $0.11 per share, for acquired in-process research
and development associated with the PanGenetics acquisition and $99 million, or
$0.07 per share, primarily for acquisition integration and cost reduction
initiatives, and $37 million, or $0.02 per share, primarily related to
inventory write-offs associated with the suspension of sibutramine in certain
countries following the European regulatory recommendation.
2008 Net Earnings Excluding Specified Items excludes after-tax charges of $183
million, or $0.12 per share, for litigation settlements related to TriCor and
$82 million, or $0.05 per share, for cost reduction initiatives, acquisition
integration and other, including actions to improve efficiencies in the core
diagnostic business. These charges were partially offset by an after-tax gain
of $146 million, or $0.09 per share, related to the sale of the spine
business. |
| Note: |
See attached questions and answers section for further
explanation of Consolidated Statement of Earnings line items. |
| n/m |
= Percent change is not meaningful. |
Abbott Laboratories and Subsidiaries
Consolidated Statement of Earnings
Twelve Months Ended December 31, 2009 and 2008
(in millions, except per share data)
(unaudited) |
| |
2009 |
2008 |
% Change |
| Net Sales |
$ 30,765 |
$ 29,528 |
4.2 |
| |
| Cost of products sold |
13,209 |
12,612 |
4.7 |
| Research and development |
2,744 |
2,689 |
2.0 |
| Acquired in-process research and development |
170 |
97 |
n/m |
| Selling, general and administrative |
8,406 |
8,436 |
(0.4) |
| Total Operating Cost and Expenses |
24,529 |
23,834 |
2.9 |
| |
| Operating earnings |
6,236 |
5,694 |
9.5 |
| |
| Net interest expense |
382 |
328 |
16.7 |
| Net foreign exchange (gain) loss |
35 |
84 |
(57.8) |
| (Income) from TAP Pharmaceutical Products Inc. joint venture |
. . . |
(119) |
(100.0) |
| Other (income) expense, net 1) |
(1,375) |
(455) |
n/m |
| Earnings from continuing operations before taxes |
7,194 |
5,856 |
22.8 |
| Taxes on earnings from continuing operations |
1,448 |
1,122 |
29.0 |
| Earnings from continuing operations |
5,746 |
4,734 |
21.4 |
| Gain on sale of discontinued operations, net of tax |
. . . |
146 |
(100.0) |
| |
| Net Earnings |
$ 5,746 |
$ 4,880 |
17.7 |
| |
Net Earnings Excluding Specified Items,
as described below 2) |
$ 5,805 |
$ 5,186 |
11.9 |
| |
| Diluted Earnings per Common Share from Continuing Operations |
$ 3.69 |
$ 3.03 |
21.8 |
| |
Diluted Earnings per Common Share from Gain on Sale of
Discontinued Operations |
$ . . . |
$ 0.09 |
(100.0) |
| |
| Diluted Earnings Per Common Share 3) |
$ 3.69 |
$ 3.12 |
18.3 |
| |
Diluted Earnings Per Common Share from Continuing Operations
Excluding Specified Items, as described below 2) |
$ 3.72 |
$ 3.32 |
12.0 |
| |
Average Number of Common Shares Outstanding Plus Dilutive
Common Stock Options and Awards |
1,555 |
1,561 |
|
| 1) |
Other (income) expense, net, in 2009 includes the
derecognition of a contingent liability that was recorded in connection with
the conclusion of the TAP joint venture and a patent litigation settlement.
Other (income) expense, net, in 2008 includes a gain associated with the
closing of the TAP Pharmaceutical Products Inc. joint venture transaction and a
gain from the sale of an equity investment in Millennium Pharmaceuticals. These
items have been treated as specified items in both periods. |
| 2) |
2009 Net Earnings Excluding Specified Items excludes an
after-tax gain of $505 million, or $0.32 per share, relating to the
derecognition of a contingent liability and an after-tax gain of $182 million,
or $0.12 per share, relating to a patent litigation settlement. This was offset
by $170 million, or $0.11 per share, for acquired in-process research and
development, $164 million, or $0.10 per share, primarily relating to costs
associated with the acquisition of Advanced Medical Optics, $68 million, or
$0.04 per share, for litigation settlements and $344 million, or $0.22 per
share, primarily for cost reduction initiatives and costs associated with a
delayed product launch. 2008 Net Earnings Excluding Specified Items excludes a
tax-free gain of $94 million, or $0.06 per share, recorded on the closing of
the TAP joint venture transaction, a reduction in income taxes of $30 million,
or $0.02 per share, relating to the settlement of an IRS audit, an after-tax
gain of $49 million, or $0.03 per share, relating to sales of equity
investments, and an after-tax gain of $146 million, or $0.09 per share, related
to the sale of the spine business. These items were offset by after-tax charges
of $76 million, or $0.05 per share, for acquired in-process research and
development relating to technology investments, $283 million, or $0.18 per
share, for cost reduction initiatives, $183 million, or $0.12 per share, for
litigation settlements related to TriCor and $83 million, or $0.05 per share,
for acquisition integration, TAP separation and other. |
| 3) |
Effective January 1, 2009, Abbott adopted FSP EITF 03-6-1,
"Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities." As a result, net earnings
allocated to common shares for the twelve months ended December 31, 2009 was
$5.733 billion. Net earnings allocated to common shares in 2008 was not
significantly different than net income. |
| Note: |
See attached questions and answers section for further
explanation of Consolidated Statement of Earnings line items |
| n/m |
= Percent change is not meaningful. |
Questions & Answers
| Q1) |
What drove the growth of worldwide pharmaceutical sales? |
| A1) |
Reported HUMIRA global sales growth was 21.4 percent for the full-year
2009, exceeding our full-year previous sales guidance for the product.
International pharmaceutical sales in the fourth quarter increased 22.1 percent, including a 5.6
percent favorable impact from exchange. Internationally, growth for
HUMIRA was 48.0 percent, with reported sales of
$888 million. International anti-TNF market
growth trends remain strong, and HUMIRA maintains a market-leading position in
many of the international markets, including the number one share position in
Western Europe.
U.S. pharmaceutical sales declined 1.9 percent, excluding the expected decline
of Depakote sales due to generic competition, which reduced U.S. pharmaceutical
sales growth by 6.7 percentage points. Reported
U.S. pharmaceutical sales declined 8.6
percent.
U.S. pharmaceutical sales were led by Niaspan, with sales of $254 million, up
14.9 percent. The release of the Arbiter-6 HALTS study data at AHA in November
is having a favorable impact on Niaspan prescribing trends. TriCor/TRILIPIX
franchise growth this quarter was impacted by the comparison to prior year,
when sales were up 16 percent, including the
initial launch of TRILIPIX. Total prescriptions for the TriCor/TRILIPIX
franchise continue to grow in the mid-to high-single digits, exceeding the
growth rate of the cholesterol market
In line with our expectations, U.S. HUMIRA sales growth was impacted by the
comparison to the fourth quarter of 2008, when sales growth was 42 percent. Underlying demand for HUMIRA continues to
outpace the market, with particularly strong growth in the dermatology and
gastroenterology segments. During 2009, HUMIRA gained total prescription share
in the U.S. anti-TNF market, with 42 percent
share at year end.
|
| Q2) |
What drove the strong performance in worldwide medical products and
worldwide nutritional products sales? |
| A2) |
Medical products sales increased 23.4 percent, including a favorable 3.2
percent impact from exchange and sales from Abbott Medical Optics (AMO), which
was acquired during the first quarter of 2009. Medical Products strength in the
quarter reflects 9.1 percent growth in worldwide
vascular sales and strong growth in U.S. Diagnostics, including continued
double-digit growth in Abbott's molecular and point of care diagnostics
businesses.
Vascular sales were driven by the continued market uptake of XIENCE V, which
remains the number one drug-eluting stent (DES) in the United States and
Europe. In January, we received approval for XIENCE
V in Japan and expect to launch upon final reimbursement authorization,
which we anticipate in early February. Japan is the second-largest drug-eluting
stent market. XIENCE PRIME, our next-generation
drug-eluting stent, is off to a strong start in Europe, where it was launched
in September 2009. XIENCE PRIME is gaining market
share given its improved deliverability and additional long-lesion sizes. In
addition, XIENCE V was approved in Mexico in
January and will launch in February.
Worldwide nutritional products sales increased 8.8 percent, including a
favorable 0.9 percent impact from exchange.
International nutritional product sales increased 11.0 percent, reflecting
strong growth in key emerging markets, including Latin America and Asia.
|
| Q3) |
What was the fourth-quarter gross margin ratio? |
| A3) |
The gross margin ratio before and after specified items is shown below
(dollars in millions):
| |
4Q09 |
| |
Cost of
Products Sold |
Gross
Margin |
Gross
Margin % |
| As reported |
$3,784 |
$5,006 |
56.9% |
| Adjusted for specified items: |
|
|
|
| Acquisition related |
($3) |
$3 |
. . . |
| Sibutramine suspension |
($34) |
$34 |
0.4% |
| Cost reduction initiatives and other |
($83) |
$83 |
1.0% |
| As adjusted |
$3,664 |
$5,126 |
58.3% |
The adjusted gross margin ratio was 58.3 percent, consistent with our previous
forecast, reflecting the expected reduction in Depakote sales resulting from
generic competition and the negative impact of foreign exchange on the
ratio.
|
| Q4) |
What was the tax rate for the full-year 2009 and in the
quarter? |
| A4) |
The full-year 2009 ongoing tax rate of 16.8 percent reflects continuing
favorable trends. We expect these trends to continue into 2010. The
fourth-quarter ongoing tax rate was 14.5 percent,
reflecting the mix of income by taxing jurisdiction. The reported
fourth-quarter tax rate is reconciled to the ongoing rate below (dollars in
millions):
| |
4Q09 |
| |
Pre-Tax
Income |
Income
Tax |
Tax
Rate |
| As reported |
$1,823 |
$284 |
15.6% |
| Specified items |
$334 |
$28 |
8.3% |
| Excluding specified items |
$2,157 |
$312 |
14.5% |
|
| Q5) |
What drove SG&A and R&D investment in the quarter? |
| A5) |
In the fourth quarter, Abbott increased investment in programs to drive
future growth, resulting in ongoing SG&A expense that was above previous
expectations. R&D investment was in line with our forecasts, reflecting
continued investment in our broad-based pipeline, including programs in
vascular devices, immunology, neuroscience, oncology and HCV.
|
| Q6) |
How did specified items affect reported results? |
| A6) |
Specified items impacted fourth-quarter results as follows:
| |
4Q09 |
| (dollars in millions, except earnings-per-share) |
Earnings |
|
| |
Pre-tax |
After-tax |
EPS |
| As reported |
$1,823 |
$1,539 |
$0.98 |
| Adjusted for specified items: |
|
|
|
| Acquired in-process R&D |
$170 |
$170 |
$0.11 |
| Acquisition related |
$49 |
$42 |
$0.03 |
| Sibutramine suspension |
$43 |
$37 |
$0.02 |
| Cost reduction initiatives and other |
$72 |
$57 |
$0.04 |
| As adjusted |
$2,157 |
$1,845 |
$1.18 |
Acquired in-process R&D is related to the acquisition of global rights to
PanGenetics' PG110, a novel biologic in development for the treatment of
chronic pain. Product suspension primarily relates to inventory write-offs
associated with the suspension of sibutramine by certain companies following
the European regulatory recommendation. Acquisition related is primarily
associated with integration costs related to the acquisitions of AMO, Evalve
and Visiogen. Cost reduction initiatives include actions to improve
efficiencies, including the previously announced efforts in the core laboratory
diagnostic business.
The pre-tax impact of specified items by Consolidated Statement of Earnings
line item is as follows (dollars in millions):
| |
4Q09 |
| |
Cost of
Products Sold |
R&D |
IP R&D |
SG&A |
| As reported |
$3,784 |
$747 |
$170 |
$2,225 |
| Adjusted for specified items: |
|
|
|
|
| Acquired in-process R&D |
. . . |
. . . |
($170) |
. . . |
| Acquisition related |
($3) |
. . . |
. . . |
($46) |
| Sibutramine suspension |
($34) |
($9) |
. . . |
. . . |
| Cost reduction initiatives and other |
($83) |
($1) |
. . . |
$11 |
| As adjusted |
$3,664 |
$737 |
. . . |
$2,190 |
|
| Q7) |
What are the key areas of focus in Abbott's broad-based
pipeline? |
| A7) |
Abbott is conducting leading-edge research across the company. In 2010, we
expect to see continued advancement in our broad-based pipeline, including the
anticipated approval for five new products or indications and data for numerous
Phase I and Phase
II compounds. Our pipeline is comprised of breakthrough research across
both pharmaceuticals and medical devices. Following are select
highlights:
-
Lipid Management
- We continue to anticipate U.S. FDA approval for CERTRIAD during the first
half of 2010. CERTRIAD is the fixed-dose combination of TRILIPIX and CRESTOR
that Abbott is developing with AstraZeneca.
-
Oncology
- Abbott's oncology pipeline includes therapies that represent promising,
unique scientific approaches to treating cancer. Abbott is focused on the
development of targeted, less-toxic treatments that inhibit tumor growth and
improve response to common cancer therapies.
- Our mid-stage oncology pipeline includes: ABT-263, a Bcl-2 family protein
antagonist; ABT-869, a multi-targeted kinase inhibitor; and ABT-888, a
PARP-inhibitor. Abbott is also evaluating a number of additional promising
mechanisms in our pre-clinical pipeline.
-
Neuroscience
- Abbott is conducting innovative research in neuroscience, where we have
developed compounds that target receptors in the brain that help regulate mood,
memory and other neurological functions to address conditions such as
Alzheimer's disease and schizophrenia. Abbott recently advanced two compounds
into Phase II development for Alzheimer's disease.
- Abbott is also pursuing compounds that could provide relief across a broad
spectrum of pain states, such as osteoarthritis, postoperative pain and cancer
pain. We recently expanded our early-stage pain portfolio with the addition of
an anti-nerve growth factor (NGF) biologic for chronic pain.
-
Immunology
- Abbott's scientific experience with the anti-TNF biologic HUMIRA serves as
a strong foundation for our continuing research in immunology. In our pipeline,
we continue to explore additional indications for HUMIRA and have ongoing
studies for ABT-874, Abbott's anti-IL 12/23 biologic. We are also working to
advance development of our early discovery programs, including oral DMARD
therapies, as well as other potential biologic targets.
- Additionally, our proprietary DVD-Ig technology represents an innovative
approach that can target multiple disease-causing antigens with a single
biologic agent. This technology could lead to combination biologics for complex
conditions such as cancer or rheumatoid arthritis, where multiple pathways are
involved in the disease.
-
Hepatitis C
- Abbott's antiviral program is focused on the treatment of hepatitis C, a
disease that affects more than 180 million people worldwide, with approximately
3 to 4 million people newly infected each year. Abbott's broad-based hepatitis
C development programs include our partnership with Enanta Pharmaceuticals to
discover protease inhibitors, as well as our internal programs focused on
additional viral targets, including polymerase inhibitors.
- Abbott currently has three HCV compounds in human trials, spanning multiple
mechanisms of action, with additional compounds in pre-clinical development.
Abbott is well positioned to explore combinations of these new therapies, a
strategy with the potential to markedly transform current treatment practices
by shortening therapy duration, improving tolerability and increasing cure
rates.
-
Vascular Devices
-
MitraClip – Abbott's MitraClip is on the market in Europe and in
development in the United States for the treatment of mitral regurgitation.
Abbott anticipates presenting the MitraClip pivotal trial, EVEREST II, at the upcoming ACC medical meeting in
March.
-
XIENCE PRIME –Abbott's next-generation DES that capitalizes on the
proven attributes of XIENCE V while offering a
novel stent design and a modified delivery system for improved deliverability.
XIENCE PRIME is off to a strong start in Europe,
where it was launched in September. XIENCE PRIME
is in clinical trials in the United States.
-
XIENCE Nano –XIENCE V for small vessels is in clinical trials in the
United States. This 2.25 mm diameter stent was
launched in Europe in 2008.
-
"Thinman" DES –Abbott is developing an ultra thin DES, which
would be the thinnest DES on the market at the time of launch. Thin stent
struts are designed to improve clinical outcomes by reducing vessel injury upon
deployment, enabling faster healing and improving deliverability in complex
anatomy.
-
Bioabsorbable Stent – Abbott is developing a bioabsorbable stent
that is gradually resorbed into the vessel wall –much like sutures are absorbed
after healing a wound –with the potential to return the vessel to full motion.
Abbott has the most advanced clinical program, with an opportunity to reach the
market years ahead of competitors.
-
Core products – Abbott recently received CE Mark for its
next-generation bare metal stent, MULTI-LINK 8.
We expect approval for this product in the United States later this year. Other
devices in active development include next-generation frontline and
high-pressure balloons, and new guidewires.
-
Molecular Diagnostics
- In the fourth quarter, Abbott launched its first RealTime cancer test on
the m2000 platform to detect a gene linked to colorectal cancer. Abbott also
continues to partner with pharmaceutical companies to develop automated
molecular tests to screen for non-small cell lung cancer.
-
Diagnostics
- Abbott recently received CE Mark for an important ARCHITECT immunoassay,
which can help in the assessment of ovarian cancer in women. Abbott has also
submitted the test to the FDA for 510(k) clearance.
- Abbott has also submitted a Premarket Approval (PMA) application to the FDA
for its ARCHITECT HIV Ag/Ab Combo assay. The assay has been shown to detect
acute and chronic HIV infection earlier than currently approved antibody tests.
Upon approval, the test is expected to be the first of its kind available for
patients in the United States.
|
Financial:
John Thomas
Larry Peepo
Tina Ventura |
(847) 938-2655
(847) 935-6722
(847) 935-9390 |
Media:
Melissa Brotz
Scott Stoffel |
(847) 935-3456
(847) 936-9502 |