Abbott Laboratories

Good morning and thank you for standing by. Welcome to Abbott's second quarter 2023 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 1 keys on your touchtone phone. 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. Mike Camilla, Vice President, Investor Relations.

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'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 2023. 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 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, 2022. 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. 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 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 is defined in the quarterly results press release issued earlier today. With that, I will now turn the call over to Robert.

Thanks, Mike. Good morning, everyone, and thank you for joining us. Today, we reported second quarter adjusted earnings per share of $1.08, which reflects an acceleration in the contribution from the underlying base business. Organic sales excluded COVID testing increased low double digits for the second quarter in a row and was led by mid-teens growth in medical devices, along with double-digit growth in established pharmaceuticals and nutrition. On our last couple of earnings calls, I've highlighted improving underlying demand trends across our businesses. These strengthening trends continued in both our institutional and consumer-facing businesses this past quarter. Within the institutional businesses, healthcare systems around the world have continued to improve their ability to expand the supply of healthcare services through ongoing efforts to adjust protocols, manage the labor challenges, and increase the overall available capacity to treat patients. In our more consumer-facing businesses, we're seeing consumers prioritize spending for healthcare products, which is driving increased demand for our products in the U.S. and internationally. I'll now summarize our second quarter results in more detail before turning the call over to Bob. And I'll start with nutrition, where sales increased 10% in the quarter. In the U.S., growth was led by pediatric nutrition growth of more than 20%. We continue to make good progress in increasing manufacturing production and have now recovered approximately 75% of the market share in the infant formula business that was lost last year as a result of the voluntary recall. Internationally, total nutrition sales grew 6% led by growth in both pediatric and adult nutrition businesses. Turning to established pharmaceuticals, sales increased 12.5% in the quarter. This strong performance was led by growth across several markets, including India and China, and therapeutic areas, including gastroenterology, women's health, and CNS pain management. This business continues to execute at a high level and capitalize on the favorable demographic and socioeconomic trends in emerging markets. Moving to diagnostics, excluding COVID testing, organic sales grew 7%, led by core lab diagnostics, where sales grew 10%, driven by performance in the US, Europe, and China. This broad-based, strong performance reflects the increased demand for routine diagnostic testing globally. And in the US, our blood transfusion testing business continues to make good progress. recovering from the impact of lower plasma donations that occurred during the COVID-19 pandemic. And I'll wrap up with medical devices, where sales grew more than 14% on an organic basis, including double-digit growth in both U.S. and internationally. In diabetes care, Freestyle Libre sales exceeded $1.3 billion in the quarter, and grew 25% on an organic basis. During the quarter, Libre became the first and only continuous glucose monitoring system to be nationally reimbursed in France for all people with diabetes who use insulin. This achievement was a direct result of the unique value proposition that Libre offers, a fully featured continuous glucose monitor made available at an accessible price. Abbott has led the way in expanding reimbursement coverage for continuous glucose monitors in order to bring the benefits of this life-changing technology to more people around the world. In cardiovascular devices, sales grew more than 10% overall in the quarter, led by double-digit growth in electrophysiology and structural heart. In electrophysiology, performance was led by international growth of more than 20% which included high teens growth in Europe and strong growth in China. During the quarter, we received U.S. FDA approval for our TactiFlex ablation catheter, the world's first ablation catheter with a flexible tip and contact force sensing technology, which helps to deliver improved procedure outcomes and faster procedure times. In structural heart, performance was driven by MitraClip growth of approximately 10% along with growth from several recently launched new products. Earlier this year, we submitted for FDA approval for TriClip, our minimally invasive tricuspid valve repair device that helps treat a condition known as tricuspid regurgitation, a leaky heart valve disease. The clinical trial data supporting our submission showed that TriClip is a highly effective and safe treatment that provides a significant improvement in the quality of life for patients. TriClip is currently being reviewed by the FDA, and we look forward to bringing this first-of-its-kind technology to patients here in the U.S. In rhythm management, growth of 8% was led by Avere, our recently launched leadless pacemaker. And during the quarter, we received FDA approval for our Avere dual-chamber leadless pacemaker a first-of-its-kind technology that allows for two pacemaker devices to communicate with one another inside the body to provide minimally invasive treatment for those with abnormal heart rhythms. AVERE was specifically designed to be upgradable and retrievable in order to evolve with patient changes in therapy needs over time. This unique technology offers the potential to revolutionize care for millions of people who require a pacemaker. And lastly, in neuromodulation, sales grew 16%, driven by the recent launch of Eterna, our first rechargeable neurostimulation device for pain management, which targets a large segment of the market where we previously did not compete. During the first half of this year, we introduced several new innovations, including the launch of Eterna, and label indication expansions for treating painful diabetic neuropathy and chronic back pain for those who have not had or are not eligible for back surgery. So in summary, we exceeded expectations on both top and the bottom lines. Growth in the underlying base business accelerated, driven by improving market conditions and contributions from both new products and legacy growth platforms. and our pipeline continues to be highly productive, which will sustain our strong growth profile in the future. I'll now turn over the call to Bob. Bob?