Abbott Laboratories

Good morning and thank you for standing by. Welcome to Abbott's first quarter 2025 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 one one 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, everyone, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer, and Phil Boudreau, Executive Vice President, Finance, and Chief Financial Officer. Robert and Phil 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 2025. 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 Form 10-K for the year ended December 31st, 2024. Adam Petrea, 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. Adam Petrea, On today's conference call, as in the past non gap financial measures will be used to help investors understand at its 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 related GAAP financial measures on a forward-looking basis for the non-GAAP financial measures for which it is providing guidance because the company is unable to predict with reasonable certainty and without unreasonable effort the timing and impact of certain items, which could significantly impact Abbott's results in accordance with GAAP. Unless otherwise noted, our commentary on sales growth refers to organic sales growth, which is defined in the 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. As we progress through 2025, it is clear that we are operating in an increasingly dynamic environment. Abbott was built not just to operate, but to succeed in rapidly evolving environments like this. We have consistently demonstrated our ability to navigate the complexities arising from a range of global circumstances, including the repercussions of a global pandemic, global financial crisis, numerous geopolitical events, just to name a few. And the current evolving economic environment influenced by new tariff policies represents another global development that we are prepared to adeptly manage. The proven benefits of our diversified business model are evident now, a result of the strategic framework that drives our global manufacturing and supply chain operations. While tariffs will have a financial impact, With 90 manufacturing sites around the world and decades of experience executing our global network strategy, we're well-positioned to implement mitigations to help manage the impact of the tariffs. I'll now shift our focus to discussing our results for the quarter. Overall, we achieved our target growth objective, delivering high single-digit sales growth and double-digit earnings per share growth. First quarter sales grew 7% or more than 8% when excluded COVID testing sales. First quarter adjusted earnings per share of $1.09 grew 11% versus the prior year and finished at the high end of our guidance range. I'll now summarize our first quarter results in more detail before turning the call over to Phil. And I'll start with nutrition. The year sales increased 7% in the quarter. Growth in the quarter. was driven by high single-digit growth in adult nutrition and double-digit growth in US pediatric nutrition. In pediatric nutrition, our relentless focus on research, innovation, and product quality continues to make our Similac family of products the number one choice for parents in the United States. In adult nutrition, growth of 8.5% was driven by growing demand for Abbott's Ensure family of products that serve as a source of complete and balanced nutrition for people with a wide range of nutritional needs. Moving to diagnostics, sales declined 5% in the quarter due to the year-over-year decline in COVID-19 testing sales, resulting from a much weaker COVID season, which primarily impacted growth in our rapid diagnostics business. In core laboratory diagnostics, low single-digit growth in the quarter reflects the impact of volume-based procurement programs in China. Excluding China, core laboratory sales grew 6.5%. And wrapping up in diagnostics, we remain on track to go live by the end of the year with two new manufacturing and R&D investments in Illinois and Texas, totaling half a billion dollars related to expanding our U.S. transfusion diagnostic business. Our diagnostic business, our transfusion business is responsible for screening the U.S. blood supply. Our current blood screening system, Alinity S, runs diagnostic tests to identify various antibodies and antigens that may be present in donated blood. We have developed a new system called Alinity N that will allow Abbott to enter the molecular nucleic acid testing segment of the blood screening market. This advanced technology is capable of detecting DNA and RNA of several diseases that could potentially contaminate blood donations. The nucleic acid testing market opportunity is estimated to be around $1 billion and represents an attractive new growth opportunity for our business. Turning to EPD, where sales increased 8% in the quarter, Growth was broad-based across the markets we serve, led by double-digit growth in more than half of our key 15 markets. We continue to make great progress on building a best-in-class portfolio of biosimilars that spans across several large and attractive therapeutic areas. In January, we entered into an agreement that provides Abbott commercialization rights to four additional biosimilars across emerging markets in Asia, Latin America, the Middle East, and Africa. Through the various collaboration agreements we have executed, we have now added a total of 15 biosimilar products projected to contribute to sales over the next three years. And I'll wrap up with medical devices, where sales grew 12.5%. In diabetes care, sales of continuous glucose monitors were $1.7 billion in the quarter and grew more than 20% including growth of 30% in the United States. In electrophysiology, sales grew 10%, which included double-digit growth in the U.S. and high single-digit growth in international markets. In March, we announced that Abbott obtained CE mark earlier than expected for our Volt PFA system to help treat patients battling atrial fibrillation. We have already initiated the launch of Volt and will further expand the roll-up across European markets over the course of the year. In structural heart, growth of 15% was driven by strong performance across our market-leading portfolio of surgical valves, structural interventions, and transcatheter repair and replacement products. Growth in the quarter was led by continued share gains in TAVR and growing adoption of TriClip. In March, New two-year data from the Triluminate clinical trial was presented at the American College of Cardiology conference. The data showed that patients receiving Triclip had a statistically significant reduction in the occurrence of heart failure-related hospitalizations along with sustained reductions in tricuspid regurgitation and life-changing improvements in quality of life. In rhythm management, growth of 6% was led by consistent and sustained market penetration of Avere, our innovative leadless pacemaker, and Assert, our newest implantable cardiac monitor. In heart failure, growth of 12% was driven by our market-leading portfolio of heart assist devices, which offers treatment for chronic and temporary conditions. In January, CMS issued national coverage decision to cover cardiomems a small implantable sensor that provides early warning indications that help doctors treat heart failure. This expanded coverage will broaden access to CardioMEMS for those with Medicare Advantage plans and help further expand coverage to those with commercial insurance plans. In vascular, growth of 6% was led by double-digit growth in vascular imaging and vessel closure products, and growth from SPRE are below the knee In March, we announced the start of our U.S. pivotal trial to evaluate our coronary intravascular lithotripsy system in treating severe calcification in the coronary arteries prior to implanting a stent. We expect to complete enrollment in this trial next year and file for FDA approval shortly thereafter. We look forward to entering this large and fast-growing segment of the coronary intervention market and expect this to become a meaningful growth driver for our vascular business. And lastly, in neuromodulation, we began treating patients in our Transcend clinical trial, a first-of-its-kind trial designed to evaluate using deep brain stimulation to address treatment-resistant depression, which represents a market opportunity exceeding a billion dollars. So in summary, we delivered another quarter of top tier performance. Sales grew high single digits and earnings per share grew double digits. We expanded gross margin by 140 basis points and operating margin by 130 basis points compared to the prior year. The pipeline continues to provide a steady cadence of new growth opportunities with more than 25 key new products forecasted to launch over the next three years. and we remain on track to deliver on the financial commitments we set at the beginning of the year. I'll now turn up the call to Phil. Phil.