ABBOTT LABORATORIES 
By ABBOTT PARK, Ill., Jan. 23, 2013 /PRNewswire/ -- Abbott today announced financial results for the fourth quarter ended Dec. 31, 2012.
-- Fourth-quarter diluted earnings per share, excluding specified items,
were $1.51. Diluted earnings per share under Generally Accepted
Accounting Principles (GAAP) were $0.66, including specified items.
-- Full-year diluted earnings per share, excluding specified items, were
$5.07, exceeding Abbott's initial guidance range. Diluted earnings per
share under GAAP were $3.72, including specified items.
-- Excluding foreign exchange, worldwide sales increased 5.6 percent.
Reported sales increased 4.4 percent, including an unfavorable 1.2
percent effect of foreign exchange.
-- On Jan. 1, 2013, Abbott completed the launch of AbbVie, a new
research-based biopharmaceutical company.
-- Abbott launched numerous new products across its diversified businesses
in 2012, positioning the company well for future growth. Key pipeline
innovations include the launch of its Absorb((TM)) bioresorbable
vascular scaffold; the next-generation drug-eluting stent, XIENCE
Xpedition((TM)); 80 launches across its Nutrition business; new tests in
Diagnostics; as well as several new product and geographic expansion
initiatives in Established Pharmaceuticals, Diabetes Care and Vision
Care.
"In 2012, we achieved a significant milestone in Abbott's 125-year history with the creation of AbbVie while delivering another year of strong results," said Miles D. White, chairman and chief executive officer, Abbott. "Abbott's mix of diversified healthcare businesses and pipeline is favorably aligned with key healthcare and emerging market trends, and well positioned to deliver top-tier growth in 2013."
The following is a summary of Fourth-Quarter 2012 sales by major business category.
% Change vs. 4Q11
-----------------
Sales ($ in millions) 4Q12 Int'l Total
-------------------------- ----- -----
U.S. Int'l Total U.S. Operational Reported Operational Reported
---- ----- ----- ---- ----------- -------- ----------- --------
Total Sales 4,669 6,168 10,837 4.4 6.6 4.4 5.6 4.4
----- ----- ------
Proprietary Pharmaceuticals 3,020 2,122 5,142 7.6 9.6 7.0 8.5 7.4
Nutritionals 743 972 1,715 9.4 10.5 10.8 10.0 10.2
Established Pharmaceuticals -- 1,346 1,346 n/a 0.6 (2.4) 0.6 (2.4)
Core Laboratory Diagnostics 174 734 908 (0.3) 7.2 4.8 5.7 3.8
Molecular Diagnostics 59 72 131 (3.3) 12.5 10.4 4.9 3.8
Point of Care Diagnostics 72 18 90 19.5 (1.0) (0.8) 14.7 14.7
Vasculara 282 478 760 (24.6)a 8.1 5.7 (6.8)a (8.1)a
Diabetes Care 150 212 362 9.8 0.6 (1.2) 4.2 3.1
Medical Optics 100 185 285 1.5 1.2 (1.3) 1.4 (0.3)
Other Sales 69 29 98 (14.7) 4.4 2.3 (9.9) (10.4)
The following is a summary of Twelve-Month 2012 sales by major business category.
% Change vs. 12M11
------------------
Sales ($ in millions) 12M12 Int'l Total
--------------------------- ----- -----
U.S. Int'l Total U.S. Operational Reported Operational Reported
---- ----- ----- ---- ----------- -------- ----------- --------
Total Sales 16,784 23,090 39,874 4.8 6.1 1.1 5.5 2.6
------ ------ ------
Proprietary Pharmaceuticals 10,158 7,854 18,012 7.4 8.9 3.0 8.2 5.5
Nutritionals 2,907 3,564 6,471 9.5 8.1 6.3 8.7 7.7
Established Pharmaceuticals -- 5,121 5,121 n/a 2.1 (4.4) 2.1 (4.4)
Core Laboratory Diagnostics 685 2,814 3,499 7.3 6.9 2.5 7.0 3.4
Molecular Diagnostics 201 244 445 (2.3) 8.3 3.0 3.3 0.5
Point of Care Diagnostics 274 74 348 18.1 8.9 7.6 16.0 15.7
Vascularb 1,226 1,845 3,071 (20.7)b 7.6 3.3 (5.6)b (7.9)b
Diabetes Care 568 759 1,327 4.4 (3.0) (7.5) (0.1) (2.8)
Medical Optics 399 698 1,097 0.7 0.8 (2.4) 0.8 (1.3)
Other Sales 366 117 483 6.7 (5.0) (11.3) 3.5 1.7
Notes: 1) See "Consolidated Statement of
Earnings" for more information.
2) "Operational" growth reflects
percentage change over the prior
year excluding the impact of
exchange rates.
a In the fourth
quarter,
excluding the
expected decline
of certain
royalty and
supply
arrangement
revenues
(including
Promus),
worldwide
operational sales
increased 0.7
percent,
worldwide
reported sales
decreased 0.9
percent, and U.S.
sales decreased
11.7 percent.
This decline in
U.S. Vascular
sales primarily
relates to a
decrease in
XIENCE sales due
to market
dynamics and the
comparison to
4Q11 when XIENCE
PRIME was
launched.
b For the full year
2012, excluding
the expected
decline of
certain royalty
and supply
arrangement
revenues
(including
Promus),
worldwide
operational sales
increased 3.4
percent,
worldwide
reported sales
increased 0.7
percent, and U.S.
Vascular sales
decreased 3.9
percent.
n/a = Not applicable
The following is a summary of Fourth-Quarter 2012 sales for select products.
% Change vs. 4Q11
-----------------
Sales ($ in millions) 4Q12 Int'l Total
-------------------------- ----- -----
U.S. Int'l Total U.S. Operational Reported Operational Reported
---- ----- ----- ---- ----------- -------- ----------- --------
HUMIRA 1,413 1,268 2,681 31.1 17.9 15.2 24.5 23.1
TRILIPIX/TriCor
(fenofibrate) 202 67 269 (50.7) (3.7) (5.2) (43.7) (43.9)
AndroGel 364 9 373 40.5 7.5 10.1 39.5 39.6
Kaletra 83 167 250 (17.0) (9.4) (11.4) (12.1) (13.4)
Lupron 155 56 211 11.3 (17.4) (18.1) 1.8 1.6
Niaspan 277 -- 277 7.4 n/a n/a 7.4 7.4
Synthroid 168 26 194 24.9 7.5 3.4 22.2 21.5
Creon 105 83 188 3.9 13.8 11.8 8.0 7.2
Pediatric
Nutritionals 366 581 947 8.5 14.1 15.0 11.9 12.4
Adult Nutritionals 377 391 768 11.5 5.6 5.2 8.4 8.2
Xience Drug-Eluting
Stentsc 128 272 400 (15.3) 12.6 10.3 2.0 0.5
Other Coronary
Productsd 49 101 150 (2.7) 3.0 0.1 1.0 (0.9)
Endovasculare 59 55 114 (3.2) 11.6 9.6 3.5 2.6
The following is a summary of Twelve-Month 2012 sales for select products.
% Change vs. 12M11
------------------
Sales ($ in millions) 12M12 Int'l Total
--------------------------- ----- -----
U.S. Int'l Total U.S. Operational Reported Operational Reported
---- ----- ----- ---- ----------- -------- ----------- --------
HUMIRA 4,376 4,889 9,265 27.7 15.4 8.5 20.7 16.8
TRILIPIX/TriCor
(fenofibrate) 1,098 292 1,390 (19.9) 1.3 (5.2) (16.0) (17.2)
AndroGel 1,152 33 1,185 31.7 6.7 4.9 30.9 30.8
Kaletra 280 733 1,013 (14.1) (7.6) (13.2) (9.4) (13.4)
Lupron 569 231 800 5.4 (10.5) (14.4) 0.1 (1.2)
Niaspan 911 -- 911 (6.7) n/a n/a (6.7) (6.7)
Synthroid 551 105 656 5.7 10.0 1.5 6.4 5.0
Creon 353 306 659 6.5 10.6 3.5 8.4 5.1
Pediatric
Nutritionals 1,445 2,080 3,525 14.0 9.1 8.0 11.1 10.4
Adult Nutritionals 1,452 1,484 2,936 6.1 6.6 4.0 6.3 5.0
Xience Drug-Eluting
Stentsc 555 1,044 1,599 (1.1) 8.5 4.8 5.1 2.7
Other Coronary
Productsd 196 402 598 (2.5) 4.1 (0.6) 1.9 (1.2)
Endovasculare 241 211 452 (1.9) 9.0 3.4 3.0 0.5
Notes: 1) See "Consolidated Statement of
Earnings" for more information.
2) "Operational" growth reflects
percentage change over the prior
year excluding the impact of
exchange rates.
c International
sales include
Abbott's Absorb
bioresorbable
vascular scaffold
(BVS).
d Includes guide
wires, balloon
catheters and
other coronary
products.
e Includes vessel
closure, carotid
stents and other
peripheral
products.
n/a = Not applicable
Diversified Healthcare Products Business Highlights
Initiated Clinical Trial of Absorb Bioresorbable Vascular Scaffold (BVS) in the United States
Announced the initiation of the ABSORB III clinical trial in patients in the U.S. The trial is designed to enroll approximately 2,250 patients and will compare the performance of Abbott's Absorb BVS, a first-of-its kind device for the treatment of coronary artery disease, to the company's XIENCE((TM)) family of drug eluting stents. Data from the ABSORB III trial will support U.S. regulatory filings for Absorb.
Announced FDA Approval and U.S. Launch of XIENCE Xpedition
Announced the U.S. launch of the XIENCE Xpedition Drug Eluting Stent System, providing physicians a next-generation technology with the largest size matrix in the U.S. market. XIENCE Xpedition features a new stent delivery system designed to optimize deliverability, particularly in challenging coronary anatomies. XIENCE Xpedition is also available in Europe and other international markets.
Received Approval for Two New Diagnostic Tests
Announced clearance from the U.S. Food and Drug Administration for ARCHITECT 2nd Generation Testosterone Assay, a more sensitive, accurate and precise test, that allows physicians to obtain more reliable measurements of testosterone in both men and women. In addition, received CE Marking for the ARCHITECT STAT High Sensitive Troponin-I Assay, which may help clinicians reduce time in diagnosing heart attacks and assist in determining risk for those who may have future heart attacks.
Introduced Ensure Complete Shakes for Adults
Introduced in the U.S. Ensure Complete((TM)), a nutritional shake that provides targeted muscle, heart, immune system, and bone support to help meet adults' daily dietary needs. Ensure Complete shakes are suitable for gluten-free and lactose intolerant diets. Ensure Complete shakes feature Abbott's proprietary ingredient, Revigor(®), and 13 grams of protein to help protect, preserve and promote muscle health.
Received Approval for ALK Test as a Companion Diagnostic in Europe
Announced expansion of the current CE-IVD product labeling for Abbott's Vysis(®) ALK Break Apart FISH Probe Kit, allowing the test to be marketed in the European Union as a companion diagnostic. The test is designed to detect rearrangements of the ALK gene in advanced non-small cell lung cancer patients who may be eligible for treatment with XALKORI(®) (crizotinib), Pfizer's ALK inhibitor.
Proprietary Pharmaceuticals Business Highlights
Presented Data from the Phase 2b Aviator Study in Hepatitis C
Presented the full results from the Phase 2b Aviator study of AbbVie's investigational all-oral interferon-free regimen for the treatment of hepatitis C (HCV). Data showed sustained virological response at 12 weeks post treatment (SVR12) in 98 percent of treatment-naive and 93 percent of null responders (intent to treat) for genotype 1 (GT1) patients taking a combination of ABT-450/r, ABT-267, ABT-333 and ribavirin.
Initiated Phase 3 Hepatitis C Registrational Program
Announced details of the Phase 3 clinical trials designed to evaluate safety and efficacy of a 12-week regimen of three direct-acting antivirals, with and without ribavirin, for the treatment of HCV in GT1 patients. The Phase 3 program, which is currently open for enrollment, will include more than 2,000 patients with HCV GT1, with trial sites in 29 countries.
Received Approval for Ninth HUMIRA Indication in Europe
Announced approval of HUMIRA(®) in Europe for the treatment of pediatric patients with severe active Crohn's disease. With this approval, HUMIRA becomes the first biologic treatment approved for these patients in more than five years. This marks the ninth indication for HUMIRA in the European Union.
Abbott issues ongoing earnings-per-share outlook for 2013
Abbott is issuing ongoing earnings-per-share guidance for the full-year 2013 of $1.98 to $2.04.
Abbott forecasts net specified items for the full-year 2013 of approximately $0.59 per share, primarily associated with intangible amortization expense, separation costs and cost-reduction initiatives. Including these net specified items, projected earnings per share under Generally Accepted Accounting Principles (GAAP) would be $1.39 to $1.45 for the full-year 2013.
Abbott declares 356(th) quarterly dividend
On Dec. 14, 2012, the board of directors of Abbott declared the company's quarterly common dividend of $0.14 per share. Abbott's cash dividend is payable Feb. 15, 2013, to shareholders of record at the close of business on Jan. 15, 2013. On Jan. 4, 2013, the board of directors of AbbVie declared the company's quarterly cash dividend of $0.40 per share. AbbVie's cash dividend is also payable on Feb. 15, 2013, to shareholders of record at the close of business on Jan. 15, 2013.
Abbott's annualized cash dividend of $0.56 per share, combined with AbbVie's annualized cash dividend of $1.60 per share, equals a total annualized cash dividend of $2.16 per share, compared to the annualized cash dividend of Abbott, prior to separation, of $2.04 per share. Future quarterly dividends are subject to approval by each company's board of directors.
About Abbott
Abbott (NYSE: ABT) is a global healthcare company devoted to improving life through the development of products and technologies that span the breadth of healthcare. With a portfolio of leading, science-based offerings in diagnostics, medical devices, nutritionals and branded generic pharmaceuticals, Abbott serves people in more than 150 countries and employs approximately 70,000 people.
Visit Abbott at www.abbott.com and connect with us on Twitter at @AbbottNews.
Abbott will webcast its live fourth-quarter earnings conference call through its Investor Relations website 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, including Abbott's expected financial results after the separation of its research-based pharmaceutical business. 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, 2011, and in Item 1A, "Risk Factors," to our quarterly reports filed on Securities and Exchange Commission Form 10-Q for the quarters ended September 30, 2012 and June 30, 2012, 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, except as required by law.
Abbott Laboratories and Subsidiaries
Consolidated Statement of Earnings
Fourth Quarter Ended December 31, 2012 and 2011
(in millions, except per share data)
(unaudited)
2012 2011 % Change
---- ---- --------
Net Sales $10,837 $10,377 4.4
------- -------
Cost of
products
sold 4,060 3,838 5.8
Research
and
development 1,141 1,152 (0.9)
Acquired
in-
process
and
collaborations
research
and
development 28 400 n/m
Selling,
general
and
administrative 3,193 2,905 9.9
----- -----
Total
Operating
Cost and
Expenses 8,422 8,295 1.5
----- -----
Operating
earnings 2,415 2,082 16.0
Net
interest
expense 163 102 59.6
Loss on
extinguishment
of debt 1,351 -- n/m 1)
Net
foreign
exchange
(gain)
loss (12) (2) n/m
Other
(income)
expense,
net 39 28 38.7
--- ---
Earnings
before
taxes 874 1,954 (55.3)
Taxes on
earnings (179) 335 n/m
---- ---
Net
Earnings $1,053 $1,619 (34.9)
====== ======
Net
Earnings
Excluding
Specified
Items, as
described
below $2,421 $2,295 5.5 2)
====== ======
Diluted
Earnings
per
Common
Share $0.66 $1.02 (35.3)
===== =====
Diluted
Earnings
per
Common
Share,
Excluding
Specified
Items, $1.51 $1.45 4.1 2)
as described below
Average
Number of
Common
Shares
Outstanding
Plus
Dilutive 1,596 1,577
Common Stock
Options and Awards
1) Loss on extinguishment of debt are
expenses associated with the early
payment of long-term debt as
previously discussed.
2) 2012 Net Earnings Excluding Specified
Items excludes after-tax charges of
$858 million, or $0.54 per share, for
loss on extinguishment of debt, $265
million, or $0.16 per share, for
separation costs, $97 million, or $0.06
per share, for asset impairments, $122
million, or $0.07 per share, for
restructuring, integration costs and
other and $26 million, or $0.02 per
share, for acquired in-process
research and development.
2011 Net Earnings Excluding Specified
Items excludes after-tax charges of
$400 million, or $0.25 per share,
relating to acquired in-process
research and development related to the
Reata collaboration, $124 million, or
$0.08 per share, associated with the
acquisition of Solvay Pharmaceuticals,
and $152 million, or $0.10 per share,
for other restructuring and integration
charges.
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, 2012 and 2011
(in millions, except per share data)
(unaudited)
2012 2011 % Change
---- ---- --------
Net Sales $39,874 $38,851 2.6
------- -------
Cost of
products
sold 15,120 15,541 (2.7) 1)
Research
and
development 4,322 4,129 4.7
Acquired
in-
process
and
collaborations
research
and
development 288 673 n/m
Selling,
general
and
administrative 12,059 12,756 (5.5) 2)
------ ------
Total
Operating
Cost and
Expenses 31,789 33,099 (4.0)
------ ------
Operating
earnings 8,085 5,752 40.6
Net
interest
expense 513 445 15.3
Loss on
extinguishment
of debt 1,351 -- n/m 3)
Net
foreign
exchange
(gain)
loss (8) (50) n/m
Other
(income)
expense,
net (34) 158 n/m 4)
--- ---
Earnings
before
taxes 6,263 5,199 20.5
Taxes on
earnings 300 470 (36.3) 5)
--- ---
Net
Earnings $5,963 $4,729 26.1
====== ======
Net
Earnings
Excluding
Specified
Items, as
described
below $8,119 $7,331 10.7 6)
====== ======
Diluted
Earnings
per
Common
Share $3.72 $3.01 23.6
===== =====
Diluted
Earnings
per
Common
Share,
Excluding
Specified
Items, $5.07 $4.66 8.8 6)
as described below
Average
Number of
Common
Shares
Outstanding
Plus
Dilutive 1,592 1,567
Common Stock
Options and Awards
1) 2012 Cost of products sold decline was
due in part to foreign exchange rates.
2) 2011 Selling, general and administrative
expense includes $1.5 billion of
litigation reserves related to
previously disclosed litigation.
3) Loss on extinguishment of debt are
expenses associated with the early
payment of long-term debt.
4) Other (income) expense, net for 2011
includes a charge of $137 million for
the impact of Abbott's change to a
calendar year end for the international
operations that were previously
reported on a November 30 year-end.
5) 2012 Taxes on earnings includes a
favorable adjustment to tax expense of
$408 million, or $0.26 per share, as a
result of the resolution of various tax
positions from a previous year. 2011
Taxes on earnings includes a favorable
adjustment to tax expense of $580
million, or $0.37 per share, as a
result of the resolution of various
international and U.S. tax positions
from prior years. These favorable items
are classified as specified items and
excluded from ongoing results, as
discussed below.
6) 2012 Net Earnings Excluding Specified
Items excludes after-tax charges of
$858 million, or $0.54 per share, for
loss on extinguishment of debt, $573
million, or $0.36 per share, for
restructuring, $485 million, or $0.30
per share, for separation costs, $325
million, or $0.21 per share, for
acquired in-process R&D and R&D
milestone payments, $115 million, or
$0.07 per share, related to litigation
reserves, $112 million, or $0.07 per
share, for integration-related
expenses and $96 million, or $0.06 per
share, for asset impairments. These
items were partially offset by a
favorable adjustment from the
resolution of a prior year's tax
positions for $408 million, or $0.26
per share.
2011 Net Earnings Excluding Specified
Items excludes after-tax charges of
$1.454 billion, or $0.92 per share,
related to litigation reserves, $673
million, or $0.43 per share, relating
to acquired in-process research and
development related to the Reata and
Biotest collaborations, $341 million,
or $0.22 per share, associated with the
acquisition of Solvay Pharmaceuticals,
$76 million, or $0.05 per share, for
the impairment of an R&D intangible
asset, $137 million, or $0.09 per
share, for the 2009 and 2010 impact of
the change to a calendar year end for
international operations, $110 million,
or $0.07 per share, for restructuring
in the pharmaceutical business, $311
million, or $0.19 per share, for cost
reduction initiatives and other, and
$80 million, or $0.05 per share, for
other litigation reserves. These items
were partially offset by a favorable
adjustment from the resolution of prior
years' international and U.S. tax
positions for $580 million, or $0.37
per share.
n/m = Percent change is not meaningful.
Questions & Answers
Q1) What were sources of sales growth in the quarter?
A1) Excluding foreign exchange, worldwide sales increased 5.6 percent. Reported sales increased 4.4 percent, including an unfavorable 1.2 percent effect of foreign exchange. In emerging markets, sales increased more than 10 percent, excluding foreign exchange, with strong double-digit growth in many of the key emerging markets across Abbott's businesses.
Worldwide Nutrition sales increased 10.0 percent in the quarter, excluding a favorable 0.2 percent effect of foreign exchange. This was driven by strong growth across the U.S. and International Nutrition businesses, increasing 9.4 percent and 10.5 percent (excluding foreign exchange), respectively, driven by growth of key products, including Similac(®), PediaSure(®), Ensure(®) and Glucerna(®), as well as emerging market growth. Sales in emerging markets represent more than 40 percent of total Nutrition sales and increased double digits. Global sales of Core Laboratory Diagnostics increased 5.7 percent, excluding an unfavorable 1.9 percent effect of foreign exchange, driven by 7.2 percent international growth, excluding an unfavorable 2.4 percent effect of foreign exchange, with strong growth in key emerging markets, such as China, Russia and Brazil. Point of Care Diagnostics also contributed to strong sales growth, increasing double digits in the quarter.
Worldwide Proprietary Pharmaceuticals sales increased 8.5 percent, excluding an unfavorable 1.1 percent effect of foreign exchange, driven by strong growth in key franchises including HUMIRA worldwide and AndroGel(® )in the U.S., partially offset by the impact of Tricor(®) generic competition in the U.S.
Q2) How did specified items affect reported results?
A2) Specified items impacted fourth-quarter results as follows:
4Q12
----
(dollars in millions, except earnings-per-share) Earnings
--------
Pre-tax After-tax EPS
------- --------- ---
As reported (GAAP) $874 $1,053 $0.66
Adjusted for specified items:
Loss on extinguishment of debt $1,351 $858 $0.54
Separation costs $282 $265 $0.16
Asset impairments $119 $97 $0.06
Acquired IPR&D $28 $26 $0.02
Restructuring/Integration/Other $171 $122 $0.07
As adjusted $2,825 $2,421 $1.51
Loss on extinguishment of debt relates to the payment of long-term debt as discussed previously. Separation costs are expenses related to the separation of AbbVie. Asset impairments relate to the write down of certain acquired research and development assets and equity investments. Acquired IPR&D relates to a previously announced Proprietary Pharmaceuticals collaboration. Restructuring/Integration/Other is associated primarily with previously announced restructuring actions across the businesses. The impact of the specified items by line item is as follows (dollars in millions):
4Q12
Cost of
Products
Sold R&D Acquired IPR&D SG&A Net Interest Expense Loss on Other (Income)/
extinguishment Expense
of Debt
-------
As reported (GAAP) $4,060 $1,141 $28 $3,193 $163 $1,351 $39
Adjusted for specified items:
Loss on extinguishment of debt -- -- -- -- -- ($1,351) --
Separation costs ($6) ($8) -- ($212) ($56) -- --
Asset impairments -- ($58) -- -- -- -- ($61)
Acquired IPR&D -- -- ($28) -- -- -- --
Restructuring/Integration/Other ($75) ($45) -- ($47) -- -- ($4)
As adjusted $3,979 $1,030 -- $2,934 $107 -- ($26)
Q3) What was the gross margin ratio in the quarter?
A3) The gross margin ratio before and after specified items is shown below (dollars in millions):
4Q12
----
Cost of Gross Gross
Products Margin Margin
Sold %
---- ---
As reported (GAAP) $4,060 $6,777 62.5%
Adjusted for specified items:
Restructuring/Integration/Other ($81) $81 0.8%
---- --- ---
As adjusted $3,979 $6,858 63.3%
The adjusted gross margin ratio was 63.3 percent in the fourth quarter, a decrease of 50 basis points from the prior year quarter due to the negative impact of foreign exchange of 130 basis points.
Q4) What was the tax rate?
A4) The ongoing tax rate for the full year was 14.8 percent, in line with previous guidance, as detailed below (dollars in millions):
12M12
-----
Pre-Tax Taxes on Tax
Income Earnings Rate
As reported (GAAP) $6,263 $300 4.8%
Specified items $3,266 $1,110 34.0%
------ ------ ----
Excluding specified items $9,529 $1,410 14.8%
The ongoing tax rate for the fourth quarter was 14.3 percent, as detailed below.
4Q12
----
Pre-Tax Taxes on Tax
Income Earnings Rate
As reported (GAAP) $874 ($179) (20.5%)
Specified items $1,951 $583 29.9%
------ ---- ----
Excluding specified items $2,825 $404 14.3%
Q5) What are the key areas of focus in Abbott's diversified medical products pipeline?
A5) Abbott's diversified medical products pipeline includes revolutionary medical technologies, next-generation diagnostic systems, new formulations, new packaging, new flavors and other brand enhancements. Following are highlights:
-- Vascular Devices
-- Abbott has one of the industry's most robust vascular pipelines and
is working on well-staged incremental advances and transformational
technologies that have the potential to restate the market.
-- Drug Eluting Stents (DES) - Abbott is the global leader in drug
eluting stents with several leading products on the market and
next-generation platforms in development. XIENCE Xpedition, our
next-generation DES technology, features a new stent delivery system
for enhanced deliverability as well as a broader size matrix. XIENCE
Xpedition was launched in the U.S. earlier this month and also is
available in Europe and parts of Asia and Latin America. We expect
to launch XIENCE Xpedition in additional markets this year.
-- Bioresorbable Vascular Scaffold (BVS) - Absorb is the world's first
drug eluting BVS for the treatment of coronary artery disease. It
restores blood flow to the heart by opening a clogged vessel and
providing support to the vessel until the device dissolves, leaving
patients with a treated vessel that may resume more natural function
and movement because it is free of a permanent metallic stent.
Absorb is now launched in more than 30 countries across Europe and
parts of Latin America and Asia, including India. In January, Abbott
announced the initiation of its U.S. clinical trial, ABSORB III,
which will be used to support the U.S. regulatory filing of Absorb.
-- Endovascular products - Abbott's endovascular business key product
launches in 2012 included the Absolute Pro(®) Vascular
Self-Expanding Stent System and the Omnilink Elite(®) Vascular
Balloon-Expandable Stent System, both for the treatment of iliac
artery disease, a form of peripheral artery disease (PAD) that
affects the lower extremities. We continue to develop innovative
products to treat PAD and expand indications for stents and vessel
closure systems.
-- MitraClip - MitraClip(®) is a less invasive device for the
treatment of select patients with mitral regurgitation (MR), the
most common valve disease in the world. MR affects more than 8
million people in the United States and Europe, and is four times
more prevalent than aortic stenosis. Abbott's MitraClip system is
available in Europe and parts of Asia and is currently under U.S.
FDA review.
-- Nutrition
-- Abbott is focused on six key areas through nutrition: immunity,
cognition, lean body mass, inflammation, metabolism and tolerance.
Through these platforms, we are helping to solve global health needs
with nutrition science that matters to our customers. Demographic
shifts also shape our innovation pipeline, as we focus on new and
existing technologies to support the challenges of an aging
population, including malnutrition, increase in chronic disease and
the targeted needs of critical care. We have initiated more than 100
clinical trials over the last three years.
-- We have expanded our R&D capabilities, reduced innovation cycle
times and accelerated product introductions. In 2012 we launched 80
products in key markets around the world. We're also expanding R&D
infrastructure closer to our customers to deliver relevant regional
innovation, and building external partnerships to expand on our core
capabilities and identify emerging technologies.
-- Key highlights from the second half of 2012 include:
-- Continued the global roll-out of Similac Total Comfort with four
additional launches in key markets: Hong Kong, Taiwan, Malaysia
and Russia. With these launches, Similac Total Comfort is now
available in 19 key international markets.
-- Initiated the global introduction of specialty tolerance
products with first market launches of Similac Alimentum(®) in
Singapore and Similac Spit-Up( )Relief((TM)) in Saudi Arabia.
-- Continued to build our portfolio in India with the launch of
Similac Stage 2 and HQPro, a protein powder product.
-- Completed the U.S. launch of Myoplex(®) Original and Lite
Ready-To-Drink with Revigor(®), Similac Liquid Protein
Fortifier, as well as a ZonePerfect(®) brand redesign.
-- Established Pharmaceuticals
-- Abbott's large and growing portfolio of hundreds of established
pharmaceuticals consists of trusted, well-known brands that have
broad use throughout the world. Our strategy is focused on
increasing access and being closer to patients and other customers
by operating locally in each market and building country-specific
portfolios made up of global and local pharmaceutical brands that
best meet each local market's needs.
-- We continue to strengthen the depth and breadth of our established
pharmaceuticals portfolio across several therapeutic areas including
gastroenterology, women's health, cardiology, metabolic disorders
and primary care. This includes launching new and improved
formulations of our current trusted brands, such as Creon and
Brufen, as well as launching new products, such as Amitiza(®), a
prescription medicine for the treatment of chronic constipation,
which recently launched in Japan.
-- Over the next several years, we expect to bring these medicines to
broader patient populations through registrations across multiple
geographies, including key emerging markets.
-- Diagnostics
-- Abbott is focusing on near-term launches of important automation
solutions, such as its next-generation track system called
ACCELERATOR a3600, to help improve efficiencies in the laboratory.
These important innovations will play a critical role in reducing
the time it takes for a test result to be delivered to the physician
to aid in patient diagnosis. Recent launches include two new tests
for the ARCHITECT platform: an innovative, highly sensitive troponin
assay available outside the U.S. and a second-generation
testosterone assay now available worldwide. Additionally, Abbott
expects to launch assays in the areas of cardiac care, fertility,
metabolics and infectious disease later this year, which will
further broaden and differentiate its industry-leading menu.
-- Future growth for the Core Laboratory Diagnostics business will be
driven by its next-generation blood screening, hematology and
immunochemistry analyzers, as well as advanced automation and
informatics solutions to provide high-quality results and
information, while enhancing laboratory productivity and reducing
costs.
-- Abbott expects to launch more than 15 new molecular diagnostic
products over the next few years, including several novel oncology,
infectious disease and companion diagnostic assays.
-- Vision Care
-- Abbott expects numerous new products and technology advancements
over the next five years from its cataract, refractive and corneal
business units. In its market-leading LASIK business, Abbott is
expanding its proprietary laser platform into new vision correction
applications, including cataract surgery. Abbott also continues to
expand its portfolio of cataract technologies which includes
intraocular lenses (IOLs), phacoemulsification systems and
viscoelastics.
-- Key highlights of 2012 include:
-- Completed the European launch of the TECNIS(®) Multifocal Toric
1-Piece IOL, which is the latest advancement in the TECNIS
portfolio of high-quality IOLs. The TECNIS iTec Preloaded
Delivery System, also launched in Europe, allows a cataract
surgeon to implant the TECNIS 1-Piece IOL safely into the eye
through a smaller incision.
-- Received U.S. FDA clearance to use Abbott's iFS Advanced
Femtosecond Laser in cataract surgery, giving surgeons the
ability to make precise, bladeless bow-shaper or curved arcuate
incisions during surgery and customize for each individual
patient.
-- Received FDA approval of Healon(®) EndoCoat OVD, a device
intended for use as a surgical aid in cataract extraction and
IOL implantation.
-- Launched in Europe and Japan the iDesign Advanced WaveScan
Studio aberrometer, a next-generation diagnostic tool for
mapping and analyzing corneal aberrations in the eye.
SOURCE Abbott
