Biotech Values

[DewDiligence]

Q&A re ABT’s 2Q10 Financial Results

[The following are excerpts from the Q&A addendum to ABT’s 2Q10 financial-results PR, which was issued on July 21. 2Q10 total sales from all business units (pharma, vascular, diagnostics, nutrition, and vision care) grew 18% year-over-year, including a 3% from currency. 2Q10 non-GAAP EPS was $1.01; non-GAAP EPS guidance for the 2010 year is $4.13-4.18.]

http://finance.yahoo.com/news/Abbott-Reports-Strong-Second-prnews-339388980.html?x=0&.v=1


›Q: What drove the growth of Worldwide Pharmaceutical sales?

A: Worldwide Pharmaceutical sales increased 24.5 percent, including a favorable 2.8 percent effect of exchange rates, driven by strong international pharmaceutical sales growth of more than 40 percent [!]. Sales included the first full-quarter contribution from the Solvay acquisition, which closed in February 2010.

Growth in the quarter was driven by HUMIRA global sales growth of 21.5 percent, with reported international growth of 32.7 percent. International anti-TNF market growth trends remain strong, and HUMIRA maintains a market-leading position in many of the international markets. U.S. HUMIRA sales increased approximately 10 percent, in-line with underlying prescription trends for the product.

Global lipid franchise sales growth was 10.3 percent, including the international TriCor sales contribution from the Solvay acquisition.


Q: What drove the strong performance in Worldwide Vascular, Worldwide Nutritional and Worldwide Diagnostics sales?

A: Double-digit growth in Worldwide Vascular sales were driven by international vascular sales growth of more than 50 percent. Abbott holds the number-one global position in drug-eluting stents, metallic stents and guidewires. Abbott's drug-eluting stent franchise, which includes XIENCE V and XIENCE PRIME, continues to perform well, including strong international performance in Europe and Japan.

Worldwide nutritional products sales increased 10.1 percent, including a favorable 2.8 percent impact from exchange and driven by more than 19 percent growth internationally. Both pediatric and adult international nutritional sales were up double-digits in the quarter. Abbott continues to perform well in key emerging markets, including China, Southeast Asia and Latin America. In the United States, Abbott continues to hold its leadership position in infant formula and adult nutritionals.
High single-digit growth in Worldwide Diagnostics reflects continued double-digit growth in Abbott's Molecular and Point of Care diagnostics businesses as well as strong growth in its international Core Laboratory Diagnostics business.


Q: What are the key areas of focus in Abbott's broad-based pipeline?

A: Abbott is conducting leading-edge research across the company and is focused on competing in attractive growth markets where R&D-based product differentiation drives success. Today, across its businesses, Abbott has more than 350 clinical trials underway and expects to deliver more than 75 new products or indications over the next five years. This includes a drug-eluting stent in the United States for small vessels; many new diagnostic assays; advances in the vision care portfolio; improvements across the global nutritional product line; several new pharmaceutical products in late-stage development; and a new heart-valve technology called MitraClip. Following are select highlights from breakthrough research across both pharmaceuticals and medical products pipelines:

* Oncology

• Abbott's oncology pipeline includes therapies that represent promising, unique scientific approaches to treating cancer. Abbott is focused on the development of targeted treatments that inhibit tumor growth and improve response to common cancer therapies. Abbott currently has nine new molecular entities in human trials.

• The oncology pipeline includes: ABT-263, a Bcl-2 family protein antagonist; ABT-869, a multi-targeted kinase inhibitor; and ABT-888, a PARP-inhibitor that is on track to move into Phase III development for breast cancer by year end. Additionally, Abbott is evaluating a number of promising mechanisms in its pre-clinical pipeline, including work on an early stage cMET antibody biologic for cancer.

• The recent acquisition of Facet Biotech brought several oncology collaborations, including early- and mid-stage compounds that are being studied for difficult to treat types of cancer, including multiple myeloma and chronic lymphocytic leukemia.

* Neuroscience / Pain

• Abbott is conducting innovative research in neuroscience, where it has developed compounds that target receptors in the brain that help regulate mood, memory and other neurological functions to address conditions such as Alzheimer's disease and schizophrenia. Abbott has eight new molecular entities in the clinic for conditions such as schizophrenia, pain, Alzheimer's disease and multiple sclerosis (MS). This includes three compounds in Phase II for Alzheimer's.

• Abbott's neuroscience pipeline also includes a novel, next-generation antibody, daclizumab, which recently entered into Phase III development for relapsing remitting MS (RRMS), the most common form of the disease.

• Abbott is also pursuing compounds that could provide relief across a broad spectrum of pain states, such as chronic back pain, postoperative pain and cancer pain.

* Women's Health

• The recent collaboration agreement with Neurocrine to develop and commercialize elagolix for the treatment of endometriosis-related pain brings Abbott a novel, first-in-class oral gonadotropin-releasing hormone (GnRH) antagonist. A Phase IIb study in endometriosis was recently completed.

* Immunology

• Abbott's scientific experience with the anti-TNF biologic HUMIRA serves as a strong foundation for its continuing research in immunology. In its pipeline, Abbott continues to explore additional indications for HUMIRA, and is on track to file regulatory applications in the U.S. and Europe for ABT-874, an anti-IL 12/23 biologic for psoriasis. Abbott is also working to advance development of its early discovery programs, including oral DMARD therapies, as well as other potential biologic targets.

• Additionally, Abbott's proprietary DVD-Ig technology represents an innovative approach that can target multiple disease-causing antigens with a single biologic agent. This technology could lead to combination biologics for complex conditions such as cancer or rheumatoid arthritis, where multiple pathways are involved in the disease.

* Hepatitis C

• Abbott's antiviral program is focused on the treatment of hepatitis C (HCV), a disease that affects more than 180 million people worldwide, with approximately 3 to 4 million people newly infected each year. Abbott's broad-based HCV development programs include its partnership with Enanta Pharmaceuticals to discover protease inhibitors, as well as its internal programs focused on additional viral targets, including polymerase inhibitors.

• Abbott currently has three HCV compounds in Phase II clinical trials and expects to advance another promising mechanism of action into human studies by year-end. Abbott is well positioned to explore combinations of these new therapies, a strategy with the potential to markedly transform current treatment practices by shortening therapy duration, improving tolerability and increasing cure rates.

* Molecular Diagnostics

• Abbott expects to launch more than 12 new products over the next two to three years, including several novel oncology and infectious disease assays, as well as improved instrument systems. Abbott recently received approval from the U.S. Food and Drug Administration (FDA) to market a new, sensitive molecular diagnostic test and instrument to simultaneously detect two of the nation's most prevalent sexually transmitted diseases, gonorrhea and chlamydia.

* Diagnostics

• In 2010, Abbott has launched a number of key assays on its ARCHITECT immunochemistry platform, which will significantly broaden its industry-leading menu. These tests include assays to assess Chagas disease, ovarian cancer, acute kidney injury and HIV.

• Abbott expects to launch several more products this year and also has several next generation instrument systems for hematology, immunochemistry and blood screening in development.

* Vascular Devices

• Abbott has the industry's most robust vascular pipeline and expects to deliver more than 10 coronary technologies over the next five years. Abbott is working on well-staged incremental advances, and truly game-changing technologies that have the ability to restate the market.

• MitraClip – Presented additional data from the pivotal trial, EVEREST II, at the EuroPCR conference, which demonstrated consistent performance of the MitraClip system for the two causes of mitral regurgitation (MR) – functional MR (FMR) or degenerative MR (DMR). Abbott's MitraClip is on the market in Europe and under regulatory review in the United States.

• XIENCE PRIME – Abbott's next-generation DES that capitalizes on the proven attributes of XIENCE V while offering a novel stent design and a modified delivery system for improved deliverability. XIENCE PRIME is on the market in Europe, and is in clinical trials in the United States with an expected launch in 2012.

• XIENCE Nano – XIENCE V for small vessels is in clinical trials in the United States. This 2.25 mm diameter stent was launched in Europe in 2008, and is expected to launch in the United States in 2011.

• "Thinman" DES – Abbott is developing an ultra thin DES, which would be the thinnest DES on the market at the time of launch. Thin stent struts are designed to improve clinical outcomes by reducing vessel injury upon deployment, enabling faster healing and improving deliverability in complex anatomy.

• Bioresorbable Vascular Scaffold (BVS) – Abbott is developing a BVS that is gradually resorbed into the vessel wall – much like sutures are absorbed after healing a wound – with the potential to return the vessel to full motion. Abbott has the most advanced BVS clinical program in the industry.

• Core Coronary products – Abbott is continuing to expand its position in the more than $2 billion core coronary market, recently launching a next-generation frontline balloon dilatation catheter in Europe. Abbott plans to launch several new balloons in Europe and the United States over the next year. In addition, Abbott is maintaining its worldwide leadership in the metallic stent market with its next-generation bare metal stent, MULTI-LINK 8, which is in development in the United States. Abbott also has a new line of guidewires in development.

* Vision Care

• Abbott expects more than 20 new products and technology advancements over the next five years, including the launch of a new contact lens solution that is underway in Europe and is expected to launch in the United States by year end. In its market-leading LASIK business, Abbott is expanding its proprietary laser platform into new vision correction applications, including cataract surgery, and is developing new diagnostic instruments and treatments to improve visual outcomes. Abbott also continues to expand its premium and standard intraocular lenses (IOL), including Synchrony, its accommodating IOL approved in Europe and under FDA review in the United States.‹