Abbott Laboratories

Good morning, and thank you for standing by. Welcome to Abbott's first quarter 2022 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 Leinenweber, Vice President, Investor Relations, Licensing, and Acquisitions.

Scott Leinenweber Good morning, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer and Bob Funk, Executive Vice President Finance and Chief Financial Officer. Robert and Bob will provide opening remarks. Following their comments, we will 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 2022. Abbott 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 Abbott's operations are discussed in Item 1A, Risk Factors, to our annual report on Form 10-K for the year ended December 31st, 2021. AVID 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. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand AVID'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. Note that Abbott has not provided the GAAP financial measure for organic sales growth on a forward-looking basis because the company is unable to predict future changes in foreign exchange rates, which could impact reported sales growth. Unless otherwise noted, our commentary on sales growth refers to organic sales growth, which excludes the impact of foreign exchange. With that, I will now turn the call over to Robert.

Thanks, Scott. Good morning, everyone, and thank you for joining us. Today, we reported results of another strong quarter. Earnings per share were $1.73, reflecting more than 30% growth compared to the prior year. Sales increased 17.5% on an organic basis in the quarter, led by double-digit growth in medical devices, established pharmaceuticals, as well as diagnostics, both with and without COVID testing-related sales. In addition to the strong results during the quarter, we continue to strengthen our strategic position and long-term growth opportunities with regulatory approvals of new products and expanded indications of use, along with continued market uptake of several recently launched products in attractive growth areas. I'll now summarize our first quarter results in more detail before turning the call over to Bob. I'll start with established pharmaceuticals, or EPD, where sales increased 13.5% in the quarter. EPD has now achieved double-digit organic sales growth in three of the last four quarters. Strong performance this quarter was led by double-digit growth across several countries and core therapeutic areas, including gastroenterology, respiratory, and CNS pain management. Turning to nutrition, where our performance was mixed. Our adult nutrition business continues to perform at a high level with global organic sales growth of 11.5% led by our Ensure and Glucerna brands. And we also achieved double-digit growth globally in our combined toddler nutrition products, which includes our market-leading Pedeshore and Pedialyte brands. As you know, however, we initiated a voluntary recall in February of certain infant formula products manufactured at one of our U.S. facilities. It's important to highlight as part of our quality system, we retain in-house samples of products that we ship to customers. Testing of retained samples related to this recall action by both Abbott and the FDA have all come back negative for the presence of the bacteria that caused the reported illnesses. The FDA and CDC found that there is no genetic match between the strains of the bacteria identified in non-product contact areas of our facility and available samples obtained from customer complaints, suggesting a different source of contamination. And lastly, no salmonella was found in our factory or product, and therefore the FDA ruled out any link to our facility. We hope these findings give parents, caregivers, and other stakeholders renewed confidence in our products. We know the situation has further exacerbated industry-wide infant formula supply shortages. That's why we're doing everything possible to mitigate supply constraints by bringing in product from our FDA-registered facility in Europe and ramping up production at our other U.S. plants. And of course, we're working very closely with the FDA on corrective actions and enhancements so that we can restart operations at the facility. Moving to diagnostics, where sales grew 35%. COVID test sales were $3.3 billion in the quarter, more than 90% of which came from our rapid tests, including BinaxNOW in the US, PanBio internationally, and IDNOW globally. Excluding COVID-testing-related sales, our global diagnostic sales grew 12% in the quarter, driven by the continued rollout of Alinity, our innovative suite of diagnostic instruments, and expanding menus across our testing platforms. And I'll wrap up with medical devices. where sales grew 11.5% in the quarter. This strong performance was led by double digit growth in diabetes care, structural heart, heart failure, and electrophysiology. In diabetes care, sales of Freestyle Libre grew more than 25% on an organic basis in the quarter, and the user base has now reached approximately 4 million users globally. In cardiovascular devices, While procedure volumes were negatively impacted by elevated COVID case rates early in the year, we saw a steady improvement in procedure trends as the case rates came down in the second half of the quarter, which has continued into April. In addition to improving market trends and our strong results, this was also another highly productive quarter for our pipeline. In the U.S., we received FDA approval for Avere, our leadless pacemaker to treat patients with slow heart rhythms. In Japan, expanded reimbursement for Libre will now cover all people with diabetes who use insulin at least once a day. Cardiomams received an expanded indication in the U.S. to treat more patients suffering from earlier stages of heart failure. And we received U.S. FDA clearance for the latest generation of our InsightX system, which provides a 360-degree view of the heart for improved cardiac mapping. So in summary, we're achieving strong growth overall and across several areas of our business. As the first quarter progressed and COVID levels decreased, we saw a steady improvement in the hospital-based procedure trends, which has continued into April. and we continue to advance our pipeline with new products, indications, and reimbursement coverage in several attractive growth areas. I'll now turn over the call to Bob.