Labcorp Holdings Inc.

Ladies and gentlemen, thank you for standing by, and welcome to LabCorp's fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. It is now my pleasure to introduce Vice President of Investor Relations, Clarissa Willey.

Thank you, Operator. Good morning and welcome to LabCorp's fourth quarter 2020 conference call. As detailed in today's press release, there will be a replay of this conference call available via telephone and internet. With me today are Adam Schechter, Chairman and Chief Executive Officer, and Glenn Eisenberg, Executive Vice President and Chief Financial Officer. This morning in the investor relations section of our website, we posted both our press release and an investor relations presentation with additional information on our business and operations, which include a reconciliation of the non-GAAP financial measure to the GAAP financial measures discussed during today's call. Additionally, we are making forward-looking statements. These forward-looking statements include but are not limited to statements with respect to 2021 guidance and the related assumptions, including the projected impact of the COVID-19 pandemic on the company's businesses, operating results, cash flows, and or financial conditions, our responses to and the expected future impacts of the COVID-19 pandemic, on our business more generally, as well as on general economic, business, and market conditions. Each of the forward-looking statements is based upon current expectations and is subject to change based upon various factors. many of which are beyond our control that could affect our financial results. Some of these factors are set forth in detail in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and in the company's other filings with the SEC. We have no obligation to provide any updates to these forward-looking statements, even if our expectations change. And now I'll turn the call over to Adam Schechter.

Thank you, Clarissa. Good morning, everyone. Thanks for joining us today. Before I cover 2020 results, I want to first thank Clarissa for her leadership in investor relations for the last several years. Clarissa has been promoted to lead our revenue cycle management team, which is a very important role. I also want to take this opportunity to welcome Chas Cook, who has been appointed to vice president of investor relations and will continue to strengthen the foundation built upon by the IR team. Chas has been a strong leader in our finance organization since he joined LabCorp in 2018. Moving now to 2020 results. 2020 will be remembered for many things, including the fight against COVID and the tragic loss that it brought. It also emphasized the critical importance of frontline healthcare workers and scientists amongst others. Looking back on this past year, I cannot be more impressed or thankful to my colleagues across LabCorp. Together, our team developed six FDA EUA COVID tests, performed approximately 35 million COVID tests in 2020, and helped to bring multiple treatments and vaccines to market in record time. Our ability to adapt quickly in a changing environment, our resilience, and our strength of our more than 50-year history have been foundational in the fight against COVID, and 2020 was transformational for LabCorp. Let me begin with a brief update on our financial results, which Glenn will cover in more detail shortly. We reported full-year 2020 revenue of $14 billion, adjusted EPS of $23.94, and free cash flow of $1.8 billion. Our base businesses in both segments continued to improve as we closed the year. In diagnostics, our base business performed well. However, volume remains below prior year. We also reported continued improvement in our drug development business, with strength across all three business lines, leading to a revenue increase in the total and the base business in the fourth quarter. Our drug development business ended the year with a trailing 12 months book to bill of 1.43, driven by strong demand across therapeutic areas. Our performance was strong in the fourth quarter and full year of 2020. Our teams are agile, they move fast, and they clearly demonstrated the strength of our science, technology, and innovation. We quickly brought innovations to market while simultaneously advancing each pillar of our company strategy. Here are just some of the highlights from the year. I'll start with, we were the first commercial lab to bring an FDA EUA COVID test to market. We became the first to offer an at-home PCR collection kit with or without a prescription through Pixel by LabCorp. And we were early to market with neutralizing antibody tests that are important in the development of COVID vaccines. In addition, early in the pandemic, our scientists partnered with PacBio to genetically sequence COVID samples so that we could detect changes to the virus and use that information to develop future therapies. Recently, we announced our efforts to sequence COVID samples for the CDC as the agency continues its important work in the fight against COVID. We are seeing the importance of these efforts and believe sequencing will be critical going forward. Also, in our diagnostics business, we brought innovative platforms and tests to market that can improve the diagnosis of important health conditions, such as lung cancer and liver disease. Looking at oncology, it continues to be a strategic focus for us. In 2020, we expanded our leadership position in oncology through the launch of a new non-invasive liquid biopsy test using next generation sequencing for patients with non-small cell lung cancer. We were also selected by a major pharmaceutical company as their partner for late stage oncology trials. We collaborated with Tempest to accelerate clinical trial patient participation. And as you read in our recent announcement, we have formed an ecology team made up of strong and talented leaders in the field. Additionally, we are continuing to integrate digital data analytics and artificial intelligence in everything we do. Our drug development business is changing how clinical trials are managed using digital technology. We completed acquisitions of GlobalCare and SnapIoT and are working with clients to use mobile and digital technology to accelerate trials and to make virtual and hybrid clinical trials a reality. Also, within our own lab operations, our engineers and scientists developed proprietary robotics capabilities that increased our COVID testing capacity. As we look at several and scientists. Our partnership with PacBio, Adaptive Biotechnologies, Microsoft, and SciX Health enabled scientists and researchers to better understand COVID. Our collaborations with Infirmary Health, Rush University System for Health, Walgreens, and others expanded our services to patients and providers across the United States. We also extended an agreement with BML to further the development of companion diagnostics in Japan. And lastly, we remain committed to customer satisfaction and remain focused on increasing access to testing, improving time to results, and improving delivery to provide our customers with the best in class testing and support for important clinical trials. As noted, science, technology, and innovation are behind these successes and are foundational to our future. Our updated brand represents the power of our combined businesses and highlights our commitment to science and innovation to improve the health and lives of people around the world. I'll close with a few comments about 2021. As you can appreciate, there's still uncertainty heading into 2021, but we believe we have enough visibility to reinstate full-year guidance targets. albeit with a wider range than we've historically provided. The fight against COVID is not over, and neither is our commitment to defeating it. We believe the lessons learned in this past year have enhanced the progression of our long-term strategic goals. We will continue to seek and invest in high growth opportunities and positively impact people's health around the world in areas such as cancer, NASH, Alzheimer's disease, and autoimmune diseases, just to name a few. There remain many significant unmet needs in health care, and LabCorp will continue to play an important role in helping to solve them. I am confident in both our short-term and our long-term prospects and in our strategy. It will continue to provide a strong platform for growth as we move forward. Before I turn it over to Glenn, I want to thank all of our employees around the world. We were honored to be recognized by Fortune magazine as one of the world's most admired companies for the efforts of our over 75,000 global employees that are working tirelessly every day to help people live better and live longer. Matt, I'll turn it to you. Thank you, Adam.