Abbott Laboratories

Good morning, and thank you for standing by. Welcome to Abbott's first quarter 2019 earnings conference call. All participants will be able to listen only until the question and answer portion of this call. During the question and answer session, you will be able to ask your question by pressing the star 1 keys on your touchtone phone. Should you become disconnected throughout this conference call, please redial the number provided to you in reference to Abbott earnings call. This call is being recorded by Abbott. With the exception of any participants' questions asked during the question-and-answer session, the entire call, including the question-and-answer session, is material copyrighted by Abbott. It cannot be recorded or rebroadcast without Abbott's express written permission. I would now like to introduce Mr. Scott Lineweber, Vice President, Investor Relations, Licensing, and Acquisitions.

Good morning, and thank you for joining us. With me today are Miles White, Chairman of the Board and Chief Executive Officer of Robert Ford, President and Chief Operating Officer, and Brian Yor, Executive Vice President, Finance and Chief Financial Officer. Miles will provide opening remarks, and Brian will discuss our performance and outlook in more detail. Following their comments, we'll take your questions. Before we get started, some statements made today may be forward-looking for purposes of the Private Securities Litigation Reform Act of 1995, including the expected financial results for 2019. AVID cautions that these forward-looking statements are subject to risk 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 AVID'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 December 31st, 2018. HABIT 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. Please note that first quarter financial results and guidance provided on the call today for sales, EPS, and line items of the P&L will be for continuing operations only. On today's conference call, as in the past, Non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com. Unless otherwise noted, our commentary on sales growth refers to organic sales growth, which is defined in our earnings news release issued earlier today. With that, I will now turn the call over to Miles. Okay, thanks, Scott, and good morning.

Today we announced results for the first quarter, and we're off to another good start. Our sales growth was strong and right on target, coming in at 7% on an organic basis in the quarter. An ongoing earnings per share of 63 cents exceeded our previous guidance range. Our full year 2019 adjusted earnings per share guidance of $3.15 to $3.25 remains unchanged and reflects mid-teens growth at the midpoint on a constant currency basis. As we've discussed previously, our emphasis today is on organic execution in the company. Today, all of our businesses have positive long-term outlooks and are well positioned with excellent products and attractive markets. At the start of the year, we issued guidance that reflected another year of strong performance. And through the first quarter, we're right on track with those expectations. We're particularly pleased with the exceptional performance of several long-term growth drivers that are leading the way, including Freestyle Libre, MitraClip, and the Alinity systems. These life-changing technologies are positively impacting lives and achieving impressive results. I'll now summarize our first quarter results before turning the call over to Brian. And I'll start with diagnostics, where sales were led by core laboratory growth of 10%. Alinity, our family of next-generation diagnostic systems, is driving strong growth internationally and we continue to achieve significant above-market growth in the United States. In Europe, we are both converting existing customers to Alinity and winning competitive bids for new business at a very high rate. We also recently increased our launch efforts for Alinity H, our hematology system, and obtained a CE mark for Alinity M, our highly automated molecular diagnostic system, along with several infectious disease tests. And we're expanding our menu of tests, in key markets such as China and the United States. With a steady menu expansion on multiple different instruments across geographies, Alinity will be a significant growth driver for years to come. In nutrition, sales increased more than 6.5% in the quarter, reflecting strong execution and new product introductions. We continue to see good underlying market demand and growth, and we're achieving above-market growth in several geographies, particularly Asia and Latin America. Sales growth this quarter was balanced across our pediatric and adult nutrition businesses with our core leading brands of Similac, PediaSure, and Ensure, all contributing to strong growth overall. In established pharmaceuticals, sales growth of 5.5% was right in line with our expectations and was a sequential improvement quarter to quarter. Performance in the quarter was led by 7.5% growth in our key emerging markets, which represent the most attractive long-term growth countries for our branded generics portfolio and include India, Brazil, Russia, and China, along with several other emerging countries. Underlying growth dynamics in these countries continue to remain strong and intact. And lastly, I'll cover medical devices, where sales grew nearly 10%, led by strong double-digit growth in heart failure, structural heart, electrophysiology, and diabetes care. In heart failure, growth of 23% was led by rapid U.S. market adoption of our HeartMate 3 left ventricular assist device following FDA approval of a long-term use indication late last year. The superior patient outcomes demonstrated in the clinical trial that supported this approval have been a critical component of the growth and the share capture that we're achieving. In structural heart, Several products across our broad portfolio contributed to strong double-digit growth in the quarter, including MitraClip, our market-leading device for the treatment of mitral regurgitation, a condition caused by a leaky heart valve. During the quarter, we announced U.S. FDA approval for a new expanded indication for MitraClip, which significantly expands the number of people that can be treated. The formal process seeking Medicare reimbursement for this new indication has been initiated. During the quarter, we also filed for CE Mark for our new TriClip device, a first-of-its-kind minimally invasive device for repairing a leaky tricuspid heart valve. We plan to initiate our U.S. pivotal trial for TriClip in the coming months. I'll wrap up with Diabetes Care, where sales grew over 40% in the quarter, led by Freestyle Libre, our market-leading continuous glucose monitoring system, or CGM. Libre continues to perform exceptionally well with worldwide sales of $380 million in the quarter, reflecting growth of 80%. In a relatively short amount of time, Libre has achieved global leadership among CGM systems for both Type 1 and Type 2 users. In order to meet the tremendous demand that we're seeing for Libre, we're adding a significant amount of new manufacturing capacity, which will come online starting in the second half of this year. So in summary, we're right on track with our high expectations to start the year. All of our long-term growth drivers are intact and achieving significant growth, including Freestyle Libre, MitraClip, and Alinity. And we're well positioned to achieve the top tier sales and EPS growth targets that we set at the beginning of the year. I'll now turn the call over to Brian to discuss our results and outlook for the year in more detail. Brian?