Abbott Q4 Earnings: Exceptional Growth

Abbott ended 2020 with great momentum, which is expected to continue with its pipeline of life-changing technologies.

Abbott Q4 Earnings: Exceptional Growth
Strategy and Strength | Jan. 27, 2021

Close out the fourth quarter of 2020 strong. Done.

Deliver impressive full-year results, even amid the global pandemic. Check.

Kick-off 2021 with significant momentum. Absolutely.

Abbott had another successful year with impressive organic growth and key product launches and approvals thanks to the company's diversified business model, which is built for strong, sustainable performance — even during uncertain times.

Contributing to this success was exceptional fourth-quarter growth with organic worldwide sales up 28.4% excluding the impact of foreign exchange (28.7% reported) led by growth in Diagnostics and Diabetes Care.

This momentum was key to Abbott achieving full-year 2020 adjusted diluted earnings-per-share (EPS) from continuing operations of $3.65, which is the upper-end of the guidance range the company issued in January 2020 of $3.55 to $3.65.1

Abbott's strong growth was fueled by the company's massive contributions to COVID-19 testing and demand for many of the company’s other technologies and products in diabetes, nutrition and medicines. Abbott expects to sustain the growth by reinvesting in its research and development of future life-changing technologies and scaling-up manufacturing capacity.

Given the momentum Abbott had in 2020, it forecasts another strong year. The company issued full-year adjusted diluted EPS guidance from continuing operations of at least $5.00, reflecting growth of more than 35%, which is extraordinary given the already strong base the company achieved in 2020.2

These are some of the key fourth-quarter highlights:

  • Tremendous growth in Diagnostics, 108.9% organic (111.1% reported), was driven by continued global demand for Abbott's portfolio of nearly a dozen rapid and lab-based COVID-19 tests, which can be used in a variety of settings. The latest of these tests is Abbott’s BinaxNOW rapid test for at-home use with a virtually guided service. The test received emergency use authorization (EUA) in December 2020 from the U.S. Food and Drug Administration (FDA).

    Abbott delivered more than 300 million COVID-19 diagnostics tests in the fourth quarter.
  • Abbott's Diabetes Care business was led by FreeStyle Libre, the market-leading continuous glucose monitor, which grew 37.1% organic (41.3% reported). The FreeStyle Libre portfolio had a strong year, expanding to nearly 3 million users3 and making significant pipeline advances, including FDA clearance for its FreeStyle Libre 2 system in the U.S. and CE Mark for its FreeStyle Libre 3 system.

    In 2021, Abbott aims to continue innovating its FreeStyle Libre system and expanding its sensing technology portfolio beyond diabetes through its Libre Sense Glucose Sport Biosensor technology. This technology, which is CE marked, is a mass market biosensor platform that has a variety of potential applications, including athletes and in other non-diabetes areas.
  • Continued strong worldwide Nutrition sales of $1.9 billion were driven by demand for Ensure, Abbott’s market-leading complete and balanced nutrition brand, Glucerna, Abbott’s best-in-class diabetes nutrition brand, and U.S. growth of Similac, the company's infant formula brand.
  • Dozens of approvals and launches across Abbott in 2020 continue to bolster the company’s product pipeline. Significant gains were made in structural heart with Abbott receiving CE Mark for both TriClip and Tendyne,* minimally invasive devices providing new treatment options for common heart valve issues. Abbott also received CE Mark for its next-gen heart device MitraClip G4. Abbott is now one of the few companies to offer first-of-their-kind products to treat the challenging mitral and tricuspid heart valves.

    Nutrition launched four new science-backed Pedialyte products, including Pedialyte with Immune Support, Pedialyte Sport, Pedialyte Organic and Pedialyte Electrolyte Water with Zero Sugar. And Established Pharmaceuticals, which saw strong sales in India, Russia and Brazil, launched dozens of new branded generic medicines across key emerging markets.

The growth of Abbott's business should continue powering the company’s strength and sustainability throughout 2021 and beyond.

For full financials and reconciliation of non-GAAP measures, you can read Abbott’s press release. For further information, take a look at some additional materials below:

Abbott President and CEO Robert Ford shared his views on our 2021 expectations, building on the growth we achieved in 2020:

Download a summary of Abbott's earnings highlights here.

* TriClip and Tendyne are investigational devices only in the U.S.

References

1 Full year 2020 diluted EPS from continuing operations on a GAAP basis was $2.49, which exceeded the guidance range Abbott issued in January 2020 of $2.35 to $2.45.
2 Full year 2021 guidance for diluted EPS from continuing operations on a GAAP basis is at least $3.74, which reflects growth of at least 50 percent versus the prior year.
3 Data on file. Abbott Diabetes Care.

Forward-Looking Statements

Some statements in this news story may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties, including the impact of the COVID-19 pandemic on Abbott's operations and financial results, 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" in our Annual Report on Form 10-K for the year ended Dec. 31, 2019 and in Item 1A, "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and are incorporated herein by reference. 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.

Important safety information

MitraClip Clip Delivery Systems
FreeStyle Libre 2 Indications and Important Safety Information
BINAXNOW EMERGENCY USE AUTHORIZATION

The BinaxNOW™ COVID-19 Ag Test Card EUA has not been FDA cleared or approved. It has been authorized by the FDA under an emergency use authorization for use by authorized laboratories. The test has been authorized only for the detection of proteins from SARS-CoV-2, not for any other viruses or pathogens, and is only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostic tests for detection and/or diagnosis of COVID-19 under Section 564(b)(1) of the Act, 21 U.S.C. § 360bbb-3(b)(1), unless the authorization is terminated or revoked sooner.

MitraClip Clip Delivery Systems

INDICATION FOR USE • The MitraClipTM G4 System is indicated for the percutaneous reduction of significant symptomatic mitral regurgitation (MR ≥ 3+) due to primary abnormality of the mitral apparatus [degenerative MR] in patients who have been determined to be at prohibitive risk for mitral valve surgery by a heart team, which includes a cardiac surgeon experienced in mitral valve surgery and a cardiologist experienced in mitral valve disease, and in whom existing comorbidities would not preclude the expected benefit from reduction of the mitral regurgitation. • The MitraClipTM G4 System, when used with maximally tolerated guideline-directed medical therapy (GDMT), is indicated for the treatment of symptomatic, moderateto-severe or severe secondary (or functional) mitral regurgitation (MR; MR ≥ Grade III per American Society of Echocardiography criteria) in patients with a left ventricular ejection fraction (LVEF) ≥ 20% and ≤ 50%, and a left ventricular end systolic dimension (LVESD) ≤ 70 mm whose symptoms and MR severity persist despite maximally tolerated GDMT as determined by a multidisciplinary heart team experienced in the evaluation and treatment of heart failure and mitral valve disease. CONTRAINDICATIONS The MitraClipTM G4 System is contraindicated in patients with the following conditions: • Patients who cannot tolerate, including allergy or hypersensitivity to, procedural anticoagulation or post procedural anti-platelet regimen • Patients with known hypersensitivity to clip components (nickel / titanium, cobalt, chromium, polyester), or with contrast sensitivity • Active endocarditis of the mitral valve • Rheumatic mitral valve disease • Evidence of intracardiac, inferior vena cava (IVC) or femoral venous thrombus WARNINGS • DO NOT use MitraClipTM outside of the labeled indication. • The MitraClipTM G4 Implant should be implanted with sterile techniques using fluoroscopy and echocardiography (e.g. transesophageal [TEE] and transthoracic [TTE]) in a facility with on-site cardiac surgery and immediate access to a cardiac operating room. • Read all instructions carefully. Use universal precautions for biohazards and sharps while handling the MitraClipTM G4 System to avoid user injury. Failure to follow these instructions, warnings and precautions may lead to device damage, user injury or patient injury including: n MitraClipTM G4 Implant erosion, migration or malposition n Failure to deliver MitraClipTM G4 Implant to the intended site n Difficulty or failure to retrieve MitraClipTM G4 system components • Use caution when treating patients with hemodynamic instability requiring inotropic support or mechanical heart assistance due to the increased risk of mortality in this patient population. The safety and effectiveness of MitraClipTM

 in these patients has not been evaluated. • Patients with a rotated heart due to prior cardiac surgery in whom the System is used may have a potential risk of experiencing adverse events such as atrial perforation, cardiac tamponade, tissue damage, and embolism which may be avoided with preoperative evaluation and proper device usage. • For the Steerable Guide Catheter and Delivery Catheter only: n The Guide Catheter: the distal 65 cm of the Steerable Guide Catheter with the exception of the distal soft tip, is coated with a hydrophilic coating. n The Delivery Catheter: coated with a hydrophilic coating for a length of approximately 131 cm. n Failure to prepare the device as stated in these instructions and failure to handle the device with care could lead to additional intervention or serious adverse event. • The Clip Delivery System is provided sterile and designed for single use only. Cleaning, re-sterilization and / or reuse may result in infections, malfunction of the device and other serious injury or death. • Note the product “Use by” date specified on the package. • Inspect all product prior to use. Do not use if the package is open or damaged, or if product is damaged. PRECAUTIONS • Prohibitive Risk Primary (or degenerative) Mitral Regurgitation n Prohibitive risk is determined by the clinical judgment of a heart team, including a cardiac surgeon experienced in mitral valve surgery and a cardiologist experienced in mitral valve disease, due to the presence of one or more of the following documented surgical risk factors: ◆ 30-day STS predicted operative mortality risk score of 4 ≥8% for patients deemed likely to undergo mitral valve replacement or 4 ≥6% for patients deemed likely to undergo mitral valve repair n Porcelain aorta or extensively calcified ascending aorta. n Frailty (assessed by in-person cardiac surgeon consultation) n Hostile chest n Severe liver disease / cirrhosis (MELD Score > 12) n Severe pulmonary hypertension (systolic pulmonary artery pressure > 2/3 systemic pressure) n Unusual extenuating circumstance, such as right ventricular dysfunction with severe tricuspid regurgitation, chemotherapy for malignancy, major bleeding diathesis, immobility, AIDS, severe dementia, high risk of aspiration, internal mammary artery (IMA) at high risk of injury, etc. n Evaluable data regarding safety or effectiveness is not available for prohibitive risk Primary patients with an LVEF < 20% or an LVESD > 60 mm. MitraClipTM should be used only when criteria for clip suitability for Primary have been met. n The heart team should include a cardiac surgeon experienced in mitral valve surgery and a cardiologist experienced in mitral valve disease and may also include appropriate physicians to assess the adequacy of heart failure treatment and valvular anatomy. • Secondary Mitral Regurgitation n Evaluable data regarding safety or effectiveness is not available for secondary MR patients with an LVEF < 20% or an LVESD > 70 mm. n The multidisciplinary heart team should be experienced in the evaluation and treatment of heart failure and mitral valve disease and determine that symptoms and MR severity persist despite maximally tolerated GDMT. POTENTIAL COMPLICATIONS AND ADVERSE EVENTS The following ANTICIPATED EVENTS have been identified as possible complications of the MitraClipTM G4 procedure. • Allergic reactions or hypersensitivity to latex, contrast agent, anaesthesia, device materials (nickel / titanium, cobalt, chromium, polyester), and drug reactions to anticoagulation, or antiplatelet drugs • Vascular access complications which may require transfusion or vessel repair including: n wound dehiscence n catheter site reactions n Bleeding (including ecchymosis, oozing, hematoma, hemorrhage, retroperitoneal hemorrhage) n Arteriovenous fistula, pseudoaneurysm, aneurysm, dissection, perforation / rupture, vascular occlusion n Emboli (air thrombotic material, implant, device component) n Peripheral Nerve Injury • Lymphatic complications • Pericardial complications which may require additional intervention, including: n Pericardial effusion n Cardiac tamponade n Pericarditis • Cardiac complications which may require additional interventions or emergency cardiac surgery, including: n Cardiac perforation n Atrial septal defect • Mitral valve complications, which may complicate or prevent later surgical repair, including: n Chordal entanglement / rupture n Single Leaflet Device Attachment (SLDA) n Thrombosis n Dislodgement of previously implanted devices n Tissue damage n Mitral valve stenosis n Persistent or residual mitral regurgitation n Endocarditis • Cardiac arrhythmias (including conduction disorders, atrial arrhythmias, ventricular arrhythmias) • Cardiac ischemic conditions (including myocardial infarction, myocardial ischemia, and unstable / stable angina) • Venous thromboembolism (including deep vein thrombosis, pulmonary embolism, post procedure pulmonary embolism) • Stroke / Cerebrovascular accident (CVA) and Transient Ischemic Attack (TIA) • System organ failure: n Cardio-respiratory arrest n Worsening heart failure n Pulmonary congestion n Respiratory dysfunction / failure / atelectasis n Renal insufficiency or failure n Shock (including cardiogenic and anaphylactic) • Blood cell disorders (including coagulopathy, hemolysis, and Heparin Induced Thrombocytopenia (HIT)) • Hypotension / hypertension • Infection including: n Urinary Tract Infection (UTI) n Pneumonia n Septicemia • Nausea / vomiting • Chest pain • Dyspnea • Edema • Fever or hyperthermia • Pain • Death • Fluoroscopy, Transesophageal echocardiogram (TEE) and Transthoracic echocardiogram (TTE) -related complications: n Skin injury or tissue changes due to exposure to ionizing radiation n Esophageal irritation n Esophageal perforation n Gastrointestinal bleeding

Caution: This product is intended for use by or under the direction of a physician. Prior to use, reference the Instructions for Use provided inside the product carton (when available) or at eifu.abbottvascular.com or at medical.abbott/manuals for more detailed information on Indications, Contraindications, Warnings, Precautions and Adverse Events. TM Indicates a trademark of the Abbott Group of Companies. www.Cardiovascular.Abbott

FreeStyle Libre 2 Indications and Important Safety Information

The FreeStyle Libre 2 Flash Glucose Monitoring System is a continuous glucose monitoring (CGM) device with real time alarms capability indicated for the management of diabetes in persons age 4 and older.*

WARNINGS/LIMITATIONS*:

The System must not be used with automated insulin dosing (AID) systems, including closed loop and insulin suspend systems. Remove the sensor before MRI, CT scan, X-ray, or diathermy treatment. Do not take high doses of vitamin C (more than 500 mg per day), as this may falsely raise your Sensor readings. Failure to use the System according to the instructions for use may result in missing a severe low blood glucose or high blood glucose event and/or making a treatment decision that may result in injury. If glucose alarms and readings from the System do not match symptoms or expectations, use a fingerstick blood glucose value to make diabetes treatment decisions. Seek medical attention when appropriate and contact Abbott Toll Free (855-632-8658) or visit * www.freestylelibre.us for detailed indications for use and safety information.

*Please refer to www.freestylelibre.us for the indications and important safety information.