Pharmacueticals

Pharmaceuticals Highlights:

• Expanded presence in emerging markets
• Created Established Products Division
• Augmented our late-stage pharmaceuticals pipeline

In the United States, Abbott markets more than 35 medications across 20 different therapeutic areas. We have leadership positions in rheumatoid arthritis, Crohn’s disease, psoriasis, cholesterol management, HIV and testosterone replacement.

Outside the United States, we market our proprietary pharmaceutical products, and in 2011, we launched our new Established Products Division (EPD), which is focused on maximizing our growing branded generics portfolio. Branded generic products have a reputation for quality, strong brand identity and patient trust.

In 2010, we evolved and strengthened our product portfolio with a mix of growth prospects that will continue to sustain us longer term. We enhanced R&D productivity, augmented our late-stage pipeline and expanded geographically to treat even more patients in the years ahead.

Strengthening our Global Position
Emerging economies are the world’s fastest-growing markets and will serve as a significant source of growth over the next decade. These regions are expected to grow three times faster than developed markets, driven by evolving demographics, rising incomes, modernization of health systems and an increase in the treatment of chronic diseases. In 2010, we took a number of actions to further increase our emerging markets presence.

Our acquisition of Solvay’s pharmaceutical business brought us a large portfolio of branded generic medicines and a strong presence in emerging markets.

Acquiring Piramal’s Healthcare Solutions business vaulted us to the number-one pharmaceutical position in India, one of the fastest-growing pharmaceutical markets. Piramal’s portfolio includes approximately 350 trusted branded generic products. Our agreement with Zydus Cadila also gave us licenses for 24 branded generic products.

We created EPD to enable us to maximize the strong commercial opportunities for branded generics outside the United States, with an emphasis on accelerating growth in emerging markets.

These actions give us the right commercial positioning to become one of the largest pharmaceutical companies in emerging markets. We expect roughly one-third of our global pharmaceutical sales will come from high-growth emerging markets within five years, up from nearly 25 percent today.

Advancing our Late-Stage Pharmaceutical Pipeline
Building and advancing our pipeline is a key driver to future growth. In Pharmaceuticals, we take a balanced approach to our R&D strategy, combining breakthrough research with lower-risk, value-added improvements to our current medicines. In 2010, we added a number of new assets to our late-stage pipeline. We also made progress in advancing our own internal pipeline, including unique compounds for cancer, autoimmune diseases, hepatitis C, cognitive disorders and pain management. By the end of 2011, we expect to have nearly 20 new molecular entities and indications in Phase II or III development.

Our acquisition of Facet Biotech Corporation gave us access to collaborations for several late-stage investigational compounds, including daclizumab, in Phase III development for multiple sclerosis, and elotuzumab, for multiple myeloma, a type of cancer found in bone marrow.

Bardoxolone is in late-stage development for chronic kidney disease, and Abbott has exclusive rights to develop the compound outside the United States, excluding certain Asian markets. Clinical studies suggest bardoxolone could be a significant improvement to the current standard of care and possibly prevent patients from progressing to later stages of the disease and dialysis.

We gained exclusive global rights to develop elagolix for endometriosis-related pain and uterine fibroids through another partnership. Endometriosis and uterine fibroids are prevalent conditions with few treatment options.

Leadership across our Portfolio
Our broad pharmaceutical portfolio includes leadership positions in a number of therapeutic areas.

Humira, Abbott’s biologic for six different autoimmune diseases, is approved in 83 countries and treats nearly 500,000 patients worldwide. With the global penetration rates of biologics still low across indications, there continues to be significant potential for many more patients to benefit from treatment with Humira.

Our lipid franchise includes Niaspan, for raising HDL or “good cholesterol,” and TriCor/Trilipix, for reducing triglycerides.

Abbott’s pharmaceutical products also include: Lupron Depot, for the management of symptoms associated with advanced prostate cancer, endometriosis, uterine fibroids and precocious puberty; Synthroid, for thyroid disease; Norvir and Kaletra, for the treatment of HIV; Creon, for exocrine pancreatic insufficiency associated with cystic fibrosis and chronic pancreatitis; AndroGel, a testosterone replacement therapy for men; Zemplar, for a condition associated with chronic kidney disease; as well as a number of other brands marketed around the world.

Nutritional Products

Nutritional Products Highlights:

• Launched Ensure Muscle Health with Revigor and PediaSure SideKicks
• Further expanded into international markets

Abbott develops and markets science-based nutritional products to support the growth, health and wellness of people of all ages. With a strong commitment to innovation, Abbott prides itself on meeting the changing nutrition needs of consumers and health care professionals.

Abbott is also dedicated to developing therapeutic nutritional products for people with special dietary needs.

Our newly reformulated Ensure shakes offer a variety of nutrient blends to address a number of key health needs, including immune system support and muscle and bone health. When exercise alone is not enough, our new Ensure Muscle Health shake features Revigor, a source of the amino acid metabolite HMB, and protein to help rebuild muscle and strength lost naturally over time. Our Glucerna products, specially formulated for people with diabetes, contain unique carbohydrate blends to help manage blood glucose.

As a leader in the adult nutrition and nutritious snacks segment, we market products for active adults seeking convenient nutrition, including Ensure, ZonePerfect, EAS and EAS Myoplex brands.

Our leading pediatric product portfolio includes Similac Advance, an infant formula with immune-system supporting nucleotides, prebiotics and carotenoids — nutrients naturally found in breast milk; Similac Go & Grow, designed for older babies and toddlers; and Similac Organic formula. In 2010, we added the benefits of EarlyShield to our Similac Sensitive line for babies with formula-tolerance issues. We also market PediaSure, a complete, balanced nutritional formula for toddlers and children, and introduced PediaSure SideKicks, shakes designed to help kids fill their nutritional gaps. Our Pedialyte drinks replace vital minerals and nutrients lost due to diarrhea and vomiting.

Abbott is also the leading medical nutritional company in several emerging markets. In 2010, we launched Ensure and Glucerna in Russia and introduced our Similac infant formula product line into new geographies.

Growing populations and increasing personal incomes are driving demand for our nutritional products in markets such as China, Southeast Asia and Latin America. The fastest-growing segments are products for toddlers and children, including Similac Advance infant formula, Gain Advance formula for older infants and PediaSure formula for children.

Medical Devices

Medical Devices Highlights:

• Introduced new intraocular lenses and a new contact lens solution
• Received CE Mark for Absorb, the first drug-eluting bioresorbable vascular scaffold for CAD
• Launched Xience V in Japan

In 2010, our medical devices business introduced new products and advanced a promising pipeline.

Vision Care
Abbott’s vision care business offers a range of technologies to treat vision care ailments, such as cataracts, near-sightedness, far-sightedness and symptoms of chronic dry eye. In 2010, Abbott introduced two new intraocular lenses (IOLs), which replace the natural lens after cataract surgery. Abbott also offers a full line of contact lens care products, including the newly launched RevitaLens Ocutec, a multi-purpose disinfecting solution.

Cardiovascular Devices
Abbott is a leader in cardiac and vascular care with a premier pipeline and a broad portfolio.

Coronary artery disease (CAD) is the most common type of heart disease. It occurs when arteries that supply blood to the heart become blocked. Drug-eluting stents (DES) are placed in diseased arteries to reestablish blood flow and keep them open — an alternative to open-heart surgery.

Xience V and Xience Prime remain the market-leading drug-eluting stents in the world. In 2010, Xience V was launched in Japan, where it quickly took the leadership position.

In January 2011, we announced the European approval for Absorb, the world’s first drug-eluting bioresorbable vascular scaffold (BVS) for CAD. Absorb has the potential to change the way physicians treat CAD, as it does what no DES has done — dissolve over time when the vessel is treated, much like sutures are absorbed after securing a wound.

We released compelling data for our MitraClip system, which is designed to repair a patient’s leaking mitral heart valve. MitraClip is available in Europe and is an investigational device under U.S. FDA review.

Abbott also markets carotid stents, embolic protection devices, balloons, guide wires and vessel closure devices.

Diabetes Care
Globally, more than 220 million people have diabetes. People with diabetes can take steps to lower their risk of complications through careful management. Abbott markets blood glucose meters that are easy to use, require small blood samples and provide fast and accurate results.

Animal Health
Abbott leverages its strengths in human health to advance veterinary medicine. We market blood glucose monitoring systems for cats and dogs, as well as products for wound care and nutrition. Our surgical product line addresses veterinary needs in anesthesia, fluid therapy and medical devices.

Diagnostics

Diagnostics Highlights:

• Launched new tests to diagnose HIV and monitor ovarian cancer
• Introduced new molecular assays for colorectal cancer and hepatitis

We continue to transform the practice of medical diagnostics through new products and systems that lower costs, improve productivity and enhance patient care. Our broad line of diagnostic instruments and tests is used worldwide in hospitals, large reference laboratories, small labs and clinics to diagnose a range of serious health concerns, including infectious diseases, cancer, diabetes and cardiac issues.

In 2010, we introduced a new test in the United States that changes the way patients are diagnosed with HIV. In addition to antibodies, Abbott’s new Architect HIV Ag/Ab Combo assay detects the presence of the HIV antigen, allowing for diagnosis days before antibodies emerge, which is meaningful in controlling the spread of the infection. The earlier patients are diagnosed, the faster they can be treated. Abbott also launched a new assay that helps physicians better monitor ovarian cancer, which is important as 70 percent of all ovarian cancer patients will have a recurrence.

Our point-of-care hand-held diagnostic system provides physicians with the information they need to accelerate patient treatment decisions. With a few drops of blood, the i-STAT system provides results with the sensitivity needed to respond with immediate action. i-STAT is used by health care providers in nearly 1,000 emergency departments. It features tests for cardiac diagnosis and routine diagnostic assessments.

Our molecular diagnostic tests provide physicians with critical information based on the early detection of pathogens and subtle changes in a patient’s genes and chromosomes. The tests’ ability to provide highly accurate detection of viruses and bacteria allows for earlier diagnosis, selection of appropriate therapies and monitoring of disease progression.

We continue to explore opportunities in pharmacogenomics by developing DNA-based tests to identify patients likely to benefit from certain treatments. This may provide better information to physicians earlier in the disease progression. In 2010, Abbott introduced tests to diagnose colorectal cancer in Europe and hepatitis B and Chlamydia/gonorrhea in the United States.

Our PlexID High-Throughput Bioidentification System is changing the way viruses, bacteria, fungi and other microorganisms are identified. It has been used in research laboratories to alert health officials to new virus strains. It is also used in food testing, forensics and biological research.