Abbott Reports Strong Sales and Earnings Growth in Third Quarter; Again Raises Full-Year Earnings Outlook

- Worldwide Sales Increased 17.6 Percent -

ABBOTT PARK, Ill., Oct. 15 /PRNewswire-FirstCall/ -- Abbott today announced financial results for the third quarter ended Sept. 30, 2008.

 

     *    Diluted earnings per share, excluding specified items, were $0.79,
          above Abbott's previously announced guidance range of $0.76 - $0.78,
          reflecting 17.9 percent growth. Diluted earnings per share under
          Generally Accepted Accounting Principles (GAAP) were $0.69, up 50.0
          percent.

     *    Today, Abbott is raising its guidance for full-year 2008 adjusted
          earnings per share to $3.31 - $3.33 from $3.24 - $3.28, excluding
          specified items. Projected earnings per share under GAAP is
          $3.23 - $3.25.

     *    Worldwide sales increased 17.6 percent to $7.5 billion, including a
          favorable 4.7 percent effect of exchange rates.

     *    Worldwide pharmaceutical sales increased 16.7 percent driven by
          double-digit growth in HUMIRA(R), TriCor(R), Niaspan(R) and
          Kaletra(R).  Global HUMIRA sales exceeded $1.2 billion; Abbott now
          expects full-year 2008 global HUMIRA sales of more than
          $4.4 billion.

     *    Worldwide medical products sales increased 25.2 percent, driven by
          15.3 percent growth in global diagnostics sales, and 57.9 percent
          growth in global vascular sales following the U.S. approval and
          successful launch of XIENCE V during the quarter. Drug-eluting stent
          (DES) franchise sales were $305 million.

     *    Worldwide nutritional products sales increased 14.5 percent led by
          22.2 percent growth in international nutritionals, with continued
          strength in emerging markets.

     *    The Abbott board of directors has recently approved a new $5 billion
          share repurchase program. Last year, Abbott returned more than $3
          billion to shareholders through dividends and share repurchase, and
          is on track to exceed this level in 2008.

"All of Abbott's businesses are performing exceptionally well, ahead of expectations," said Miles D. White, chairman and chief executive officer, Abbott. "Abbott remains well-positioned, with strong core growth franchises, including our emerging vascular business, which is rapidly becoming a significant contributor to Abbott's growth."

 



    The following is a summary of third-quarter 2008 sales.

                                                                   Impact of
    Sales Summary -                            3Q08      % Change   Exchange
     Quarter Ended 9/30/08                  ($millions)  vs. 3Q07  on % Change


    Total Sales                                $7,498       17.6        4.7

        Total U.S. Sales                       $3,683       17.9        ---

        Total International Sales              $3,815       17.3        9.2

    Worldwide Pharmaceutical Sales             $4,121       16.7        4.8

        U.S. Pharmaceuticals                   $2,135       12.6        ---

        International Pharmaceuticals          $1,986       21.5       10.3

    Worldwide Nutritional Sales                $1,262       14.5        2.6

        U.S. Nutritionals                        $633        7.8        ---

        International Nutritionals               $629       22.2        5.5

    Worldwide Diagnostics Sales                  $911       15.3        7.5

        U.S. Diagnostics                         $231       14.7        ---

        International Diagnostics                $680       15.5       10.0

    Worldwide Vascular Sales                     $636       57.9        5.4

         U.S. Vascular                           $376       87.2        ---

         International Vascular                  $260       28.8       10.7

    Other Sales                                  $568        2.9        4.1

    Note:  See "Consolidated Statement of Earnings" for more information.



    The following is a summary of sales for the first nine months of 2008.

                                                                   Impact of
    Sales Summary -                            9M08      % Change   Exchange
     Nine Months Ended 9/30/08              ($millions)  vs. 9M07  on % Change

    Total Sales                                $21,577       15.4        5.4

        Total U.S. Sales                       $10,135        9.2        ---

        Total International Sales              $11,442       21.6       10.7

    Worldwide Pharmaceutical Sales             $12,098       15.9        5.6

        U.S. Pharmaceuticals                    $5,957        8.3        ---

        International Pharmaceuticals           $6,141       24.4       11.8

    Worldwide Nutritional Sales                 $3,606       12.7        3.1

        U.S. Nutritionals                       $1,823        5.2        ---

        International Nutritionals              $1,783       21.5        6.7

    Worldwide Diagnostics Sales                 $2,679       16.5        8.2

        U.S. Diagnostics                          $668       10.0        ---

        International Diagnostics               $2,011       18.9       11.2

    Worldwide Vascular Sales                    $1,578       26.6        5.6

         U.S. Vascular                            $809       21.2        ---

         International Vascular                   $769       32.9       12.0

    Other Sales                                 $1,616        6.9        4.5

    Note:  See "Consolidated Statement of Earnings" for more information.



    The following is a summary of Abbott's third-quarter 2008 sales for
selected products.

    Quarter Ended 9/30/08                Percent        Percent        Percent
    (dollars in millions)                 Change Rest    Change         Change
                                    U.S.    vs.   of       vs.   Global   vs.
                                   Sales   3Q07 World     3Q07   Sales   3Q07
    Pharmaceutical Products
    HUMIRA                          $577   35.1  $627     67.0a $1,204   50.0
    Kaletra                         $128   (6.4) $259     28.4b   $387   14.4
    TriCor                          $334   11.1  ---       ---    $334   11.1
    Depakote                        $290  (19.1)  $27      7.1    $317  (17.4)
    Lupron                          $149    n/m   $72     11.8c   $221    n/m
    Ultane/Sevorane                  $47   (3.0) $153     10.0d   $200    6.6
    Niaspan                         $194   16.2  ---       ---    $194   16.2
    Synthroid                       $106   (3.5)  $23     14.6    $129   (0.7)
    Biaxin (clarithromycin)           $3    n/m  $112     (8.3)e  $115  (11.9)

    Nutritional Products
    Pediatric Nutritionals          $319   (2.0) $349     25.9f   $668   10.8
    Adult Nutritionals              $304   20.4  $280     17.8g   $584   19.1

    Medical Products
    Coronary Stents                 $248  262.3  $135     42.8h   $383  135.0
    Abbott Diabetes Care            $145   (0.7) $210     19.3i   $355   10.2
    Other Coronary                   $70    1.7   $84     13.2j   $154    7.7
    Endovascular                     $58   (7.8)  $41     24.4k    $99    3.1

     a    Without the positive impact of exchange of 16.8 percent, HUMIRA
          sales increased 50.2 percent internationally.
     b    Without the positive impact of exchange of 10.4 percent, Kaletra
          sales increased 18.0 percent internationally.
     c    Without the positive impact of exchange of 10.7 percent, Lupron
          sales increased 1.1 percent internationally.
     d    Without the positive impact of exchange of 8.0 percent, Sevorane
          sales increased 2.0 percent internationally.
     e    Without the positive impact of exchange of 7.9 percent,
          clarithromycin sales decreased 16.2 percent internationally.
     f    Without the positive impact of exchange of 4.6 percent, Pediatric
          Nutritionals sales increased 21.3 percent internationally.
     g    Without the positive impact of exchange of 6.6 percent, Adult
          Nutritionals sales increased 11.2 percent internationally.
     h    Without the positive impact of exchange of 11.9 percent, Coronary
          Stent sales increased 30.9 percent internationally.
     i    Without the positive impact of exchange of 11.2 percent, Abbott
          Diabetes Care sales increased 8.1 percent internationally.
     j    Without the positive impact of exchange of 9.4 percent, Other
          Coronary sales increased 3.8 percent internationally.
     k    Without the positive impact of exchange of 10.3 percent,
          Endovascular sales increased 14.1 percent internationally.

     n/m = Not meaningful


The following is a summary of Abbott's first nine months of 2008 sales for selected products.

 

    Nine Months Ended 9/30/08           Percent          Percent       Percent
    (dollars in millions)                Change  Rest     Change        Change
                                    U.S.   vs.    of        vs.   Global   vs.
                                   Sales  9M07  World      9M07   Sales   9M07
    Pharmaceutical Products
    HUMIRA                       $1,504   33.9  $1,666     69.0a $3,170  50.3
    Kaletra                        $361   (6.2)   $734     29.2b $1,095  14.9
    Depakote                     $1,017   (2.7)    $78     13.8  $1,095  (1.7)
    TriCor                         $886    7.3     ---      ---    $886   7.3
    Ultane/Sevorane                $135   (9.7)   $454     11.0c   $589   5.5
    Niaspan                        $565   17.7     ---      ---    $565  17.7
    Biaxin (clarithromycin)         $11    n/m    $485     (3.7)d  $496  (5.4)
    Lupron                         $231    n/m    $208     12.9e   $439   n/m
    Synthroid                      $315   (3.2)    $67     23.7    $382   0.7

    Nutritional Products
    Pediatric Nutritionals         $935    2.9    $984     24.3f $1,919  12.9
    Adult Nutritionals             $866    8.7    $800     18.1g $1,666  13.0

    Medical Products
    Abbott Diabetes Care           $415   (0.9)   $601     21.4h $1,016  11.2
    Coronary Stents                $402   75.4    $386     48.5i   $788  61.1
    Other Coronary                 $226   (4.6)   $262     17.1j   $488   5.9
    Endovascular                   $181  (10.1)   $121     27.4k   $302   2.0

     a    Without the positive impact of exchange of 17.9 percent, HUMIRA
          sales increased 51.1 percent internationally.
     b    Without the positive impact of exchange of 11.1 percent, Kaletra
          sales increased 18.1 percent internationally.
     c    Without the positive impact of exchange of 9.1 percent, Sevorane
          sales increased 1.9 percent internationally.
     d    Without the positive impact of exchange of 9.3 percent,
          clarithromycin sales decreased 13.0 percent internationally.
     e    Without the positive impact of exchange of 11.5 percent, Lupron
          sales increased 1.4 percent internationally.
     f    Without the positive impact of exchange of 5.5 percent, Pediatric
          Nutritionals sales increased 18.8 percent internationally.
     g    Without the positive impact of exchange of 8.1 percent, Adult
          Nutritionals sales increased 10.0 percent internationally.
     h    Without the positive impact of exchange of 12.3 percent, Abbott
          Diabetes Care sales increased 9.1 percent internationally.
     i    Without the positive impact of exchange of 13.3 percent, Coronary
          Stents sales increased 35.2 percent internationally.
     j    Without the positive impact of exchange of 10.3 percent, Other
          Coronary sales increased 6.8 percent internationally.
     k    Without the positive impact of exchange of 12.2 percent,
          Endovascular sales increased 15.2 percent internationally.

     n/m = Not meaningful



     Business Highlights

     *    TCT Data Presentations -- At this week's Transcatheter
          Cardiovascular Therapeutics (TCT) meeting, presented results from a
          new meta-analysis of its XIENCE V(TM) drug-eluting stent clinical
          trials, SPIRIT II and SPIRIT III, which showed XIENCE V outperformed
          TAXUS(R) in key efficacy and safety endpoints out to two years. We
          also presented new two-year data from our ABSORB trial, which
          demonstrated that our bioabsorbable drug-eluting stent successfully
          treated coronary artery disease and absorbed within two years.

     *    Similac(R) Enhancements -- In September, announced the launch of an
          innovative infant nutrition product and new consumer packaging.
          Similac Advance EarlyShield(TM) is the only infant formula that has
          a unique blend of prebiotics, nucleotides and antioxidants --
          nutrients found in breast milk. Similac(R) SimplePac(TM) is Abbott's
          most significant packaging redesign of baby formula powder
          containers.

     *    HUMIRA(R) Psoriasis Data -- In September, presented data at the
          European Academy of Dermatology and Venereology (EADV) Congress
          demonstrating more psoriasis patients achieved efficacy when they
          received continuous treatment with HUMIRA (adalimumab) vs.
          interrupted treatment. Additional analysis showed HUMIRA effectively
          treats adult patients with psoriasis regardless of age, duration of
          disease, diagnosis of psoriatic arthritis or recent systemic
          therapy.

     *    Patient Side Point-of-Care Testing -- In August, announced patient
          side, point-of-care testing -- where diagnostic testing is conducted
          at or near the site of the patient -- enabling doctors to make
          decisions on patients presenting with chest pain up to 20 minutes
          faster than those whose lab tests are evaluated by a standard lab,
          according to a study that appeared in the peer-reviewed journal
          Annals of Emergency Medicine.

     *    AstraZeneca Relationship Expanded -- In August, announced an
          agreement with AstraZeneca to promote AstraZeneca's CRESTOR(R)
          (rosuvastatin calcium), a medication used along with diet to reduce
          high cholesterol. Abbott will obtain the non-exclusive right to
          promote CRESTOR alongside AstraZeneca in the United States,
          excluding Puerto Rico.

     *    Post-Approval Study of XIENCE V -- In July, announced the start of
          the XIENCE V USA post-approval study. The XIENCE V USA study will
          evaluate the safety and effectiveness of the XIENCE V drug-eluting
          stent in 5,000 patients in a real-world clinical setting out to five
          years.

     *    XIENCE V Approved in United States -- On July 2, received FDA
          approval and launched XIENCE V, which demonstrated superiority to
          TAXUS in two randomized, controlled clinical trials. Abbott's
          application included safety and efficacy data from the SPIRIT
          clinical trials, which met its primary endpoint and demonstrated
          the superiority of XIENCE V over the previous market leader,
          TAXUS.

Abbott raises guidance for full-year earnings per share

Based on the company's continued strong results year-to-date, and the outlook for the remainder of the year, Abbott is raising its earnings-per- share forecast for the full-year 2008 to $3.31 - $3.33 from $3.24 - $3.28, excluding specified items. Abbott's original guidance range for 2008, provided in January, was $3.20 - $3.25.

Abbott continues to forecast net specified items for the full-year 2008 of $0.08 per share, primarily associated with cost reduction initiatives and acquired in-process R&D, offset by favorable items including the gain related to the conclusion of the TAP joint venture, a favorable settlement of a prior year's tax audit, the gain on the sales of equity investments, and the gain on sale of Abbott's spine business, which is forecast to occur in the fourth quarter. Including these specified items, projected earnings per share under GAAP would be $3.23 - $3.25 for the full-year 2008.

Abbott declares quarterly dividend; double-digit increase over prior year

On September 12, 2008, the board of directors of Abbott declared the company's quarterly common dividend of 36 cents per share, a 10.8 percent increase over the prior year. The cash dividend is payable Nov. 15, 2008, to shareholders of record at the close of business on October 15, 2008, 2008. This marks the 339th consecutive dividend paid by Abbott since 1924.

About Abbott

Abbott 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 68,000 people and markets its products in more than 130 countries.

Abbott's news releases and other information are available on the company's Web site at http://www.abbott.com. Abbott will webcast its live third-quarter earnings conference call through its Investor Relations Web site at http://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 the purposes of the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. 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, 2007, and in Item 1A, "Risk Factors," to Abbott's Quarterly Report on Securities and Exchange Commission Form 10-Q for the quarter ended June 30, 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
               Third Quarter Ended September 30, 2008 and 2007
                                 (unaudited)

                                                                 Percent
                                  2008              2007         Change

    Net Sales                $7,497,660,000    $6,376,706,000      17.6
    Cost of products sold     3,352,869,000     2,864,030,000      17.1
    Research and
     development                680,360,000       640,718,000       6.2
    Selling, general and
     administrative           2,067,914,000     1,945,404,000       6.3
    Total Operating Cost
     and Expenses             6,101,143,000     5,450,152,000      11.9

    Operating earnings        1,396,517,000       926,554,000      50.7

    Net interest expense         69,701,000       106,224,000     (34.4)
    Net foreign exchange
     (gain) loss                 17,156,000         4,959,000       n/m
    (Income) from TAP
     Pharmaceutical
     Products Inc. joint
     venture                            ---      (114,084,000)   (100.0)
    Other (income)
     expense, net               (63,376,000)       36,036,000       n/m   1)
    Earnings before taxes     1,373,036,000       893,419,000      53.7
    Taxes on earnings           288,424,000       176,414,000      63.5

    Net Earnings             $1,084,612,000      $717,005,000      51.3

    Net Earnings Excluding
     Specified Items, as
     described below         $1,235,553,000    $1,046,437,000      18.1   2)

    Diluted Earnings Per
     Common Share                     $0.69             $0.46      50.0

    Diluted Earnings Per
     Common Share,
     Excluding Specified
      Items, as described
       below                          $0.79             $0.67      17.9   2)

    Average Number of
     Common Shares
     Outstanding Plus
     Dilutive
         Common Stock
          Options and
          Awards              1,563,730,000     1,557,758,000

    1) Other (income) expense, net in 2008 includes primarily ongoing
       contractual payments from Takeda associated with the conclusion of the
       TAP joint venture. Other (income) expense, net, in 2007 is primarily
       associated with Abbott's ownership of Boston Scientific stock.

    2) 2008 Net Earnings Excluding Specified Items excludes after-tax charges
       of $151 million, or $0.10 per share, for cost reduction initiatives,
       related primarily to actions announced in August 2008 to streamline
       global manufacturing operations, reduce overall costs, and improve
       efficiencies in Abbott's core diagnostic business.

       2007 Net Earnings Excluding Specified Items excludes after-tax charges
       of $111 million, or $0.07 per share, for a contract termination and
       other litigation, $79 million, or $0.05 per share, for reestablishment
       of suspended depreciation and amortization expense on the long-term
       assets of the core laboratory diagnostics business, $56 million, or
       $0.04 per share, for acquisition integration, and other, $21 million,
       or $0.01 per share, for fair value loss adjustments related to Boston
       Scientific stock, and $62 million, or $0.04 per share, for cost
       reduction initiatives.

    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
                Nine Months Ended September 30, 2008 and 2007
                                 (unaudited)
                                                                  Percent
                                   2008             2007          Change

    Net Sales                $21,577,284,000  $18,692,887,000      15.4
    Cost of products sold      9,433,641,000    8,260,366,000      14.2
    Research and
     development               1,957,180,000    1,843,248,000       6.2
    Acquired in-process
     research and
     development                  97,256,000              ---      n/m
    Selling, general and
     administrative            6,138,264,000    5,528,729,000      11.0
    Total Operating Cost
     and Expenses             17,626,341,000   15,632,343,000      12.8

    Operating earnings         3,950,943,000    3,060,544,000      29.1

    Net interest expense         246,200,000      355,245,000     (30.7)
    Net foreign exchange
     (gain) loss                  37,849,000       16,058,000     135.7
    (Income) from TAP
     Pharmaceutical
     Products Inc. joint
     venture                    (118,997,000)    (376,442,000)    (68.4)
    Other (income)
     expense, net               (384,189,000)      78,960,000       n/m   1)
    Earnings before taxes      4,170,080,000    2,986,723,000      39.6
    Taxes on earnings            825,587,000      583,436,000      41.5

    Net Earnings              $3,344,493,000   $2,403,287,000      39.2

    Net Earnings
     Excluding Specified
     Items, as described
     below                    $3,531,274,000   $2,976,580,000      18.6   2)

    Diluted Earnings Per
     Common Share                      $2.14            $1.54      39.0   2)

    Diluted Earnings Per
     Common Share, Excluding
     Specified Items, as
     described below                   $2.26            $1.91      18.3

    Average Number of
     Common Shares
     Outstanding Plus
     Dilutive Common
     Stock Options
     and Awards                1,559,686,000    1,559,074,000

    1) Other (income) expense, net, in 2008 includes a gain of $94 million in
       connection with the closing of the TAP Pharmaceutical Products Inc.
       joint venture transaction and gains of $63 million from the sale of
       equity investments in Millennium Pharmaceuticals and Boston Scientific.
       These items have been treated as specified items. The remainder of
       Other (income) expense, net, is primarily related to ongoing
       contractual payments from Takeda associated with the conclusion of the
       TAP joint venture. Other (income) expense, net, in 2007 is primarily
       associated with Abbott's ownership of Boston Scientific stock.

    2) 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, and an
       after-tax gain of $49 million, or $0.03 per share, relating to sales of
       equity investments in Millennium Pharmaceuticals and Boston Scientific.
       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, $225 million, or $0.14 per share, for cost
       reduction initiatives, and $59 million, or $0.04 per share for
       acquisition integration, TAP separation and other.

       2007 Net Earnings Excluding Specified Items excludes after-tax charges
       of $164 million, or $0.11 per share, for acquisition integration,
       $111 million, or $0.07 per share, for a contract termination and other
       litigation, $41 million, or $0.03 per share, for fair value loss
       adjustments, net of realized gains, related to Boston Scientific stock,
       $34 million, or $0.02 per share, for write-down of Omnicef inventory,
       $19 million, or $0.01 per share, for transaction and separation costs
       relating to the terminated sale of the core laboratory diagnostics
       business, and $204 million, or $0.13 per share, for cost reduction
       initiatives and other.

    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 16.7 percent increase in global pharmaceutical sales
          in the quarter?

     A1)  U.S. pharmaceutical sales increased 12.6 percent, reflecting
          double-digit growth for HUMIRA, TriCor and Niaspan. U.S. HUMIRA
          sales increased more than 35 percent, as strong market demand
          continued across the three major market segments of rheumatology,
          gastroenterology and dermatology. Based on the strength of HUMIRA
          and the outlook for global growth, Abbott now expects HUMIRA sales
          of more than $4.4 billion in 2008.

          Also in the quarter, Abbott's lipid franchise performed well, with
          growth outpacing the overall cholesterol market and both Niaspan and
          TriCor achieving double-digit growth. Niaspan increased 16.2 percent
          with sales of $194 million. TriCor sales increased more than 11
          percent with sales of $334 million.

          International pharmaceutical sales increased 21.5 percent, including
          a 10.3 percent favorable impact from exchange. Better-than-expected
          international growth was driven by HUMIRA, which increased 67.0
          percent, and Kaletra, which grew 28.4 percent, driven by continued
          success of the tablet launch in international markets. Synthroid,
          Lupron and Sevorane also contributed to reported international
          growth, as well as a number of other established products.


     Q2)  What drove the 25.2 percent increase in global medical products
          sales and strong international nutritional products sales?

     A2)  Medical products sales increased 25.2 percent, reflecting 15.3
          percent growth in global diagnostics sales and 57.9 percent growth
          in worldwide vascular. Each of Abbott's major diagnostic
          segments -- molecular, point of care, and the core immunochemistry
          business -- delivered double-digit growth.

          Abbott Vascular achieved record sales of $636 million, driven by
          drug-eluting stent (DES) franchise sales of $305 million, which more
          than doubled sequentially from the second quarter, exceeding the
          company's previous guidance. The substantial increase in vascular
          sales this quarter was due to the U.S. approval and successful
          launch of XIENCE V beginning July 2. XIENCE V is now the
          market-leading DES in the U.S. The XIENCE platform, which includes a
          private-label version of XIENCE V called Promus, has captured more
          than 50 percent of the U.S. market. Market conditions for coronary
          stents continue to improve in the U.S., with U.S. percutaneous
          coronary intervention (PCI) volumes up versus the third quarter 2007
          and DES penetration rates steadily increasing to more than 70
          percent.

          Worldwide nutritional products sales were led by 22.2 percent growth
          in international nutritionals, including a 5.5 percent favorable
          impact from exchange, with continued strong growth in key emerging
          markets, including Latin America and Asia, where Abbott is opening a
          new state-of-the art nutritionals manufacturing facility in
          Singapore beginning in early 2009.


     Q3)  How did specified items affect reported results?

     A3)  Specified items impacted third-quarter results as follows:


                                                           3Q08
    (dollars in millions, except
     earnings-per-share)                          Earnings
                                             Pre-tax    After-tax      EPS
    As reported                               $1,373      $1,085      $0.69
    Adjusted for specified items:
    Cost reduction initiatives                  $191        $151      $0.10
    As adjusted                               $1,564      $1,236      $0.79



          Cost reduction initiatives are related primarily to actions
          announced in August 2008 to streamline global manufacturing
          operations, reduce overall costs, and improve efficiencies in
          Abbott's core diagnostic business. Charges related to this action
          were in line with the previous forecast.

          The pre-tax impact of specified items by Consolidated Statement of
          Earnings line item is as follows (dollars in millions):


                                                            3Q08
                                              Cost of
                                           Products Sold     R&D        SG&A
    As reported                                $3,353       $680       $2,068
    Adjusted for specified items:
    Cost reduction initiatives                   $165         $6          $20
    As adjusted                                $3,188       $674       $2,048



     Q4)  What drove the strong investment spending in the quarter?

     A4)  Combined investment in R&D and SG&A was up 13.6 percent, excluding
          specified items. The strong growth in SG&A included new and ongoing
          promotional initiatives across multiple businesses, including
          spending to support the numerous new product approvals this year.
          Growth in R&D expense reflected continued investment in our
          broad-based pipeline, including early-to-mid-stage opportunities
          across a number of therapeutic areas, such as oncology, immunology,
          hepatitis C, neuroscience and our bioabsorbable stent program.


     Q5)  How does the third-quarter gross margin ratio compare to the
          company's guidance?

     A5)  The gross margin ratio before and after specified items is shown
          below (dollars in millions):


                                                          3Q08
                                             Cost of
                                             Products                 Gross
                                               Sold    Gross Margin  Margin %
    As reported                               $3,353      $4,145      55.3%
    Adjusted for specified items:
    Cost reduction initiatives                 ($165)       $165       2.2%
    As adjusted                               $3,188      $4,310      57.5%



          The adjusted gross margin ratio was 57.5 percent, at the high-end of
          our previous forecast range of 57.0 to 57.5 percent for the quarter.
          The gross margin ratio for the fourth quarter is forecasted to be
          approximately 59.0 percent.


     Q6)  What was the tax rate in the quarter?

     A6)  The tax rate this quarter, excluding specified items, was 21.0
          percent, in line with our forecasted rate. The year-to-date tax rate
          for 2008, excluding specified items, was 21.0 percent, also in line
          with our previous forecast. As a reminder, the third quarter and
          year-to-date tax rates do not include the benefit of the U.S.  R&D
          tax credit since it was enacted in the fourth quarter.


     Q7)  What are some near-term opportunities in Abbott's broad-based
          pipeline?

     A7)  Abbott's late-stage pipeline has been very productive this year,
          generating eight new regulatory approvals to date in 2008, with two
          additional approvals expected in the fourth quarter. Highlights of
          the near-term opportunities include:

          *    HUMIRA
               o    Psoriasis -- Launched in Europe and the U.S. in the
                    first-quarter 2008.
               o    RA Japan -- Launched in June 2008.
               o    Psoriasis Japan -- Indication filed, under regulatory
                    review.
               o    Ulcerative colitis -- Currently in Phase III development.

          *    TRILIPIX(TM) -- We expect a fourth-quarter approval of
               TRILIPIX, Abbott's next-generation fenofibrate. To support
               TRILIPIX, Abbott has executed the largest clinical program to
               date     to evaluate the efficacy and safety of a fibrate in
               combination with statins. Development also continues on a
               fixed-dose combination of TRILIPIX and CRESTOR to address all
               three lipid parameters in a single pill. We plan to submit a
               New Drug Application for this fixed-dose combination in the
               second half of 2009.

          *    Controlled-Release Vicodin -- We expect a fourth-quarter
               approval of this new branded pain medication. When approved,
               this product will be the first extended release formulation of
               hydrocodone with acetaminophen.

          *    Flutiform -- Flutiform, a combination asthma treatment in Phase
               III development, is targeted for a first-quarter 2009 NDA
               filing.

          *    ABT-874 -- In Immunology, Abbott's anti-IL-12/23 biologic,
               ABT-874, has demonstrated promising results in early studies
               for Crohn's disease and psoriasis. Abbott moved ABT-874 into
               Phase III development for psoriasis in December 2007.

          *    Diabetes Care Pipeline -- The FreeStyle Freedom Lite no-
               calibration meter was launched internationally last year and
               was launched in the United States in the first quarter of 2008.
               Abbott's FreeStyle Navigator Continuous Glucose Monitoring
               System was launched in Europe last year and was approved and
               launched in the United States in the first quarter of 2008.
               Also in development is a fully-integrated blood glucose
               monitoring system combining a meter, test strips and lancing
               capabilities in one device.

          *    XIENCE V in Japan -- Recently submitted a marketing
               authorization license application in Japan to gain approval for
               XIENCE V to treat coronary artery disease. The application for
               XIENCE V consisted of safety and efficacy data from the SPIRIT
               III clinical trial, including data from a Japanese patient
               population.

          *    Core Laboratory Diagnostics -- In April, Abbott introduced the
               ARCHITECT i1000SR immunochemistry analyzer in the United
               States, expanding its ARCHITECT family of diagnostic instrument
               systems for clinical laboratories. In 2009, we plan to
               introduce the ARCHITECT c4000(TM), a clinical chemistry
               analyzer designed for small-to-medium-sized labs. The c4000 is
               compatible with the i1000, which will allow seamless
               integration of clinical chemistry and immunoassay testing on
               one platform.


     Q8)  What are some early and mid-stage opportunities in Abbott's
          broad-based pipeline?

     A8)  With the recent productivity of the late-stage pipeline, Abbott is
          now focused on advancing leading-edge scientific discoveries from
          its early-to-mid-stage development pipeline across the company,
          where we continue to advance a number of compounds that have
          breakthrough potential.

          Our pharmaceutical pipeline has increased in size, novelty and
          number of phase transitions. This year, Phase I or Phase II trial
          initiations are nearly double 2007 levels. We continue to focus our
          investment to discover new treatments across a spectrum of
          therapeutic areas. Select highlights include:

          *    Oncology
               o    Abbott's Oncology pipeline includes targeted therapies
                    that represent promising, unique scientific approaches to
                    treating cancer. Our collaboration with Genentech to
                    develop two Abbott-discovered compounds including a
                    multi-targeted kinase inhibitor and Bcl-2 family protein
                    antagonist, continues to progress.
               o    Oncology compounds in Abbott's pipeline that are not part
                    of the collaboration include: a PARP-inhibitor, which
                    prevents DNA repair in cancer cells, enhancing the
                    effectiveness of current cancer therapies; an oral
                    anti-mitotic in Phase II for non-small cell lung cancer
                    and neuroblastoma; and a biologic anti-tumor agent with a
                    novel mechanism of action.

          *    Neuroscience
               o    Abbott is conducting innovative research in neuroscience,
                    where we've developed compounds that target receptors in
                    the brain that help regulate pain, mood, memory and other
                    neurological functions to address conditions, such as
                    attention deficit hyperactivity disorder, Alzheimer's
                    disease and schizophrenia. Our work in neuroscience is
                    focused on several promising investigational platforms
                    including NNRs, H3, Calpain and TRPV1, among others.
               o    Abbott is also working to advance compounds that have the
                    potential to meet the market need for a non-opioid pain
                    therapy.

          *    Immunology
               o    Abbott's scientific experience with the anti-TNF biologic
                    HUMIRA serves as a strong foundation for our continuing
                    research in immunology. Products in development for the
                    treatment of immune-mediated diseases are designed to
                    selectively inhibit proteins that are responsible for
                    inflammation. In addition to our work with IL-12/23, we
                    are working to advance development of our early discovery
                    programs, including oral therapies for rheumatoid
                    arthritis, JAK kinase and P38, as well as other potential
                    biologic targets.
               o    Additionally, our proprietary DVD-ig technology represents
                    a promising approach that could lead to combination
                    biologic therapies.

          *    Hepatitis C
               o    Abbott's antiviral program is focused on the treatment of
                    hepatitis C, a disease that affects more than 170 million
                    people worldwide. Abbott has two active hepatitis C
                    programs including our partnership with Enanta
                    Pharmaceuticals to develop protease inhibitors as well as
                    an internal polymerase program.

          *    Bioabsorbable Drug-Eluting Stent
               o    At the TCT meeting this week, Abbott presented encouraging
                    two-year data from the world's first clinical trial for a
                    fully-bioabsorbable DES to treat coronary artery disease.
                    The bioabsorbable DES is designed to be slowly metabolized
                    by the body and completely absorbed over time.

CONTACT: Financial, John Thomas, +1-847-938-2655, or Larry Peepo,+1-847-935-6722, or Tina Ventura, +1-847-935-9390, or Media, Melissa Brotz,+1-847-935-3456, or Scott Stoffel, +1-847-936-9502, all of Abbott

Web site: http://www.abbott.com/

Ticker Symbol: (NYSE:ABT)

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Posted: October 2008


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