Q1 2024 Abbott Laboratories Earnings Call

April 17, 2024

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Operator: Good morning, and thank you for standing by. Welcome to Abbott's Q1 2024 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 11 keys on your touch-tone 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 Comilla, Vice President, Investor Relations.

Good morning, and thank you for standing by.

Welcome to Abbott's first quarter 2024 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'll be able to ask your question by pressing the star one one key 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 expressed written permission.

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 Comilla, Vice President, Investor Relations.

I would now like to introduce Mr. Michael Miller, Vice President Investor Relations.

Michael Comilla: Good morning, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer, Bob Funk, Executive Vice President, Finance, and Phil Boudreau, Senior 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 2024. 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 31 December 2023.

Michael Miller: Good morning, and thank you for joining US with me today are Robert Ford, Chairman and Chief Executive Officer.

Michael Miller: Bob Funk.

Michael Miller: Executive Vice President Finance, and still Boudreaux, Senior Vice President Finance and Chief Financial Officer.

Michael Miller: 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 2024. 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 31 December 2023.

Michael Miller: Before we get started some statements made today maybe forward looking for purposes of the private Securities Litigation Reform Act of $19 95.

Michael Miller: <unk> the expected financial results for 2024.

Michael Miller: 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.

Michael Miller: Economic competitive governmental technological and other factors that may affect abbott's operations are discussed in item one a.

Michael Miller: Risk factors to our annual report on Form 10-K for the year ended December 31 2023.

Michael Comilla: 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. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with the 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 GAAP financial measure for organic sales growth on a forward-looking basis because the company is unable to predict future changes in foreign exchange rates, which could impact reported sales growth. 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.

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. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com.

Michael Miller: 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.

Michael Miller: On today's conference call as in the past non-GAAP financial measures will be used to help investors understand abbott's ongoing business performance.

Michael Miller: These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at Abbott Dot com.

Note that Abbott has not provided the GAAP financial measure for organic sales growth on a forward-looking basis because the company is unable to predict future changes in foreign exchange rates, which could impact reported sales growth. 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.

Michael Miller: Note that Abbott has not provided the GAAP financial measure for organic sales growth on a forward looking basis because of the company is unable to predict future changes in foreign exchange rates, which could impact reported sales growth.

Michael Miller: Unless otherwise noted our commentary on sales growth refers to organic sales growth, which is defined in the press release issued earlier today.

Michael Miller: With that I will now turn the call over to Robert.

Robert Ford: Thanks, Mike. Good morning, everyone, and thank you for joining us. Today, we reported first quarter adjusted earnings per share of $0.98, which was above analysts' consensus estimates. We also raised the midpoint of our guidance ranges for both earnings per share and sales growth. We now forecast full-year adjusted earnings per share of $4.55 to 4.70, and organic sales growth excluded COVID testing-related sales of 8.5% to 10%. Organic sales growth, excluding COVID testing-related sales, was 10.8% in the quarter, which represents the fifth consecutive quarter of double-digit growth. The strong start to the year was driven by broad-based growth across the portfolio, including growth of 14% in medical devices and established pharmaceuticals. In addition to exceeding expectations of both top and bottom lines this quarter, we accomplished a number of objectives across the pipeline, including obtaining several new product approvals and achieving important clinical trial-related milestones.

Robert B. Ford: Thanks, Mike.

Robert B. Ford: Good morning, everyone and thank you for joining us.

Robert B. Ford: Today, we reported first quarter adjusted earnings per share of 98.

Robert B. Ford: Which was above analyst consensus estimates.

Robert B. Ford: We also raised the midpoint of our guidance ranges for both earnings per share and sales growth.

Robert B. Ford: We now forecast full year adjusted earnings per share of $4 55 to $4 70.

Robert B. Ford: And organic sales growth, excluding COVID-19 testing related sales of eight 5% to 10%.

Robert B. Ford: Organic sales growth, excluding COVID-19 testing related sales was 10, 8% in the quarter.

Robert B. Ford: Which represents the fifth consecutive quarter of double digit growth.

The strong start to the year was driven by broad-based growth across the portfolio, including growth of 14% in medical devices and established pharmaceuticals. In addition to exceeding expectations of both top and bottom lines this quarter, we accomplished a number of objectives across the pipeline, including obtaining several new product approvals and achieving important clinical trial-related milestones.

Robert B. Ford: The strong start to the year was driven by broad based growth across the portfolio, including growth of 14% and medical devices and established pharmaceuticals.

Robert B. Ford: In addition to exceeding expectations of both top and bottom lines. This quarter, we accomplished a number of objectives across the pipeline.

Robert B. Ford: Including obtaining several new product approvals and achieving important clinical trial related milestones.

Robert Ford: I'll now summarize our first quarter results in more detail before turning the call over to Phil. I'll start with nutrition, where sales increased 8% in the quarter. Strong growth in the quarter was led by double-digit growth in pediatric nutrition, driven by continued market share gains in the US infant formula business and growth across our international portfolio of infant formula, toddler, and adult nutrition brands. In January, we launched a new nutrition shake called Protality, which provides nutritional support for adults pursuing weight loss. As people eat less and lose weight from taking GLP-1 medications, undergoing a weight loss surgery, or following a calorie-restricted diet, a portion of what is lost is lean muscle mass, which plays an important role in overall health.

I'll now summarize our first quarter results in more detail before turning the call over to Phil. I'll start with nutrition, where sales increased 8% in the quarter. Strong growth in the quarter was led by double-digit growth in pediatric nutrition, driven by continued market share gains in the US infant formula business and growth across our international portfolio of infant formula, toddler, and adult nutrition brands. In January, we launched a new nutrition shake called Protality, which provides nutritional support for adults pursuing weight loss.

Robert B. Ford: I will now summarize our first quarter results in more detail before turning the call over to Phil.

Robert B. Ford: Yes.

Phil: And I'll start with nutrition.

Phil: Where sales increased 8% in the quarter.

Phil: Strong growth in the quarter was led by double digit growth in pediatric nutrition.

Phil: Driven by continued market share gains in the U S infant formula business and growth across our international portfolio of infant formula toddler and adult nutrition brands.

Phil: In January we launched a new nutrition shake coal Protiviti, which provides nutritional support for adults pursuing weight loss.

As people eat less and lose weight from taking GLP-1 medications, undergoing a weight loss surgery, or following a calorie-restricted diet, a portion of what is lost is lean muscle mass, which plays an important role in overall health. The combination of high protein and essential vitamins and minerals that Protality offers can help people preserve muscle while pursuing their personal weight loss goals. Turning to EPD, where sales increased 14% in the quarter. This quarter was a continuation of EPD's impressive trend of strong performance, including double-digit growth in four of the last five quarters.

Phil: As people eat less and lose weight from taking GOP, one medications undergoing a weight loss surgery are following a calorie restricted diet.

Phil: A portion of what is lost as lean muscle mass, which plays an important role in overall health.

Robert Ford: The combination of high protein and essential vitamins and minerals that Protality offers can help people preserve muscle while pursuing their personal weight loss goals. Turning to EPD, where sales increased 14% in the quarter. This quarter was a continuation of EPD's impressive trend of strong performance, including double-digit growth in four of the last five quarters. In addition to a strong track record of top-line growth, this business has delivered equally impressive gains on the bottom line, with an operating margin profile last year that reflected more than 350 basis points of improvement compared to 2019. Moving to diagnostics, where sales increased more than 5%, excluding COVID testing sales. Growth in diagnostics continues to be led by the adoption of our market-leading systems and demand for testing that takes place in a variety of settings, including hospitals, laboratories, urgent care centers, physician offices, retail pharmacies, and blood screening facilities.

Phil: Combination of high protein and essential vitamins and minerals that propel it offers can help people preserve muscle while pursuing their personal weight loss goals.

Phil: Turning to Apd, where sales increased 14% in the quarter.

Phil: This quarter was a continuation of <unk> impressive trend of strong performance, including double digit growth in four of the last five quarters.

In addition to a strong track record of top-line growth, this business has delivered equally impressive gains on the bottom line, with an operating margin profile last year that reflected more than 350 basis points of improvement compared to 2019. Moving to diagnostics, where sales increased more than 5%, excluding COVID testing sales. Growth in diagnostics continues to be led by the adoption of our market-leading systems and demand for testing that takes place in a variety of settings, including hospitals, laboratories, urgent care centers, physician offices, retail pharmacies, and blood screening facilities.

Phil: In addition to a strong track record of top line growth.

Phil: This business has delivered equally impressive gains on the bottom line.

Phil: With an operating margin profile last year that reflected more than 350 basis points of improvement compared to 2019.

Phil: Moving to diagnostics.

Phil: Where sales increased more than 5%, excluding COVID-19 testing sales.

Phil: Growth in diagnostics continues to be led by the adoption of our market leading systems and demand for testing that takes place in a variety of settings, including hospitals laboratories urgent care centers.

Phil: Physician offices retail pharmacies and blood screening facilities.

Robert Ford: Our development efforts in diagnostics focus on developing new systems and creating new tests that play an important role in making healthcare decisions, expand the accessibility of testing, and deliver a result as fast as possible. In April, we received FDA approval for a point-of-care diagnostic test that can help determine if someone suffered a mild traumatic brain injury or concussion in just 15 minutes. The test is run on our portable i-STAT Alinity instrument, which allows concussion testing to move beyond the traditional hospital setting and into urgent care centers, physician offices, and other locations that are closer to the patient. With nearly 5 million people in the US going to the emergency room to be checked for suspected concussion each year, we believe this test has the potential to transform the standard of care for concussion testing. And I'll wrap up with medical devices, where sales grew 14%.

Our development efforts in diagnostics focus on developing new systems and creating new tests that play an important role in making healthcare decisions, expand the accessibility of testing, and deliver a result as fast as possible. In April, we received FDA approval for a point-of-care diagnostic test that can help determine if someone suffered a mild traumatic brain injury or concussion in just 15 minutes. The test is run on our portable i-STAT Alinity instrument, which allows concussion testing to move beyond the traditional hospital setting and into urgent care centers, physician offices, and other locations that are closer to the patient.

Phil: Our development efforts in diagnostics focus on developing new systems, and creating new tests that play an important role in making healthcare decisions expand the accessibility of testing and deliver a result as fast as possible.

Phil: In April we received FDA approval for our point of care diagnostic test that can help determine if someone's suffered a mild traumatic brain injury or concussion and just 15 minutes.

Phil: The test is run on our portable I stat, eliminating instrument.

Phil: Which allows concussion testing to move beyond the traditional hospital setting and into urgent care centers physician offices and other locations that are closer to the patient.

With nearly 5 million people in the US going to the emergency room to be checked for suspected concussion each year, we believe this test has the potential to transform the standard of care for concussion testing. And I'll wrap up with medical devices, where sales grew 14%. In diabetes care, FreeStyle Libre sales were $1.5 billion in the quarter and grew 23%. As I previously mentioned, Libre has several new growth opportunities that will help continue to fuel the strong sales trajectory we have forecasted.

With nearly 5 million people in the U S going to the emergency room to be checked for suspected concussion. Each year. We believe this test has the potential to transform the standard of care for concussion testing.

Phil: And I'll wrap up with medical devices, where sales grew 14%.

Robert Ford: In diabetes care, FreeStyle Libre sales were $1.5 billion in the quarter and grew 23%. As I previously mentioned, Libre has several new growth opportunities that will help continue to fuel the strong sales trajectory we have forecasted. One of those growth opportunities relates to the continued expansion of reimbursement coverage for Libre for individuals who use basal insulin therapy to manage their diabetes. Last year, we announced that Libre became the first and only continuous glucose monitoring system to be nationally reimbursed in France to include all people who use basal insulin as part of their diabetes management. During Q1, Libre obtained reimbursement from a select number of institutional payers in Germany for basal insulin users who also use oral diabetes medication to manage their condition.

In diabetes care freestyle Libre sales were $1 5 billion in the quarter and grew 23%.

As I previously mentioned that Libre has several new growth opportunities that will help continue to fuel the strong sales trajectory we have forecasted.

One of those growth opportunities relates to the continued expansion of reimbursement coverage for Libre for individuals who use basal insulin therapy to manage their diabetes. Last year, we announced that Libre became the first and only continuous glucose monitoring system to be nationally reimbursed in France to include all people who use basal insulin as part of their diabetes management. During Q1, Libre obtained reimbursement from a select number of institutional payers in Germany for basal insulin users who also use oral diabetes medication to manage their condition.

Phil: One of those growth opportunities relates to the continued expansion of reimbursement coverage for libre for individuals who use basal insulin therapy to manage their diabetes.

Phil: Last year, we announced that Libre became the first and only continuous glucose monitoring system to be nationally reimbursed in France to include all people, who use basal insulin as part of their diabetes management.

Phil: During this first quarter Libre obtained reimbursement from a select number of institutional payers in Germany for basal insulin users, who also use oral diabetes medications to manage their condition.

Robert Ford: These select public and private payers cover a limited number of the approximately 1 million basal insulin users in Germany, but this is an encouraging sign of the potential for further coverage expansion not only in Germany but across other European markets. In cardiovascular devices, sales grew 10.5% overall in the quarter, led by double-digit growth in electrophysiology, structural heart, and continued acceleration in our cardiac rhythm management and vascular portfolios. In electrophysiology, sales grew 18%, driven by double-digit growth in all major geographic regions and across all major product categories, including double-digit growth in ablation catheters and cardiac mapping-related products. We continue to make great progress toward bringing our innovative PFA catheter, Volt, to market. In March, we completed enrollment in our CE marked clinical study, putting us on track to file for international approval before the end of the year.

These select public and private payers cover a limited number of the approximately 1 million basal insulin users in Germany, but this is an encouraging sign of the potential for further coverage expansion not only in Germany but across other European markets. In cardiovascular devices, sales grew 10.5% overall in the quarter, led by double-digit growth in electrophysiology, structural heart, and continued acceleration in our cardiac rhythm management and vascular portfolios.

Phil: These select public and private payers cover a limited number of the approximately 1 million basal insulin users in Germany.

Phil: But this is an encouraging sign of the potential for further coverage expansion not only in Germany, but across other European markets.

Phil: And cardiovascular devices sales grew 10, 5% overall in the quarter.

Led by double digit growth in electrophysiology structural heart and continued acceleration in our cardiac rhythm management and vascular portfolios.

In electrophysiology, sales grew 18%, driven by double-digit growth in all major geographic regions and across all major product categories, including double-digit growth in ablation catheters and cardiac mapping-related products. We continue to make great progress toward bringing our innovative PFA catheter, Volt, to market. In March, we completed enrollment in our CE marked clinical study, putting us on track to file for international approval before the end of the year.

In electrophysiology sales grew 18% driven by double digit growth in all major geographic regions and across all major product categories, including double digit growth in ablation catheters and cardiac mapping related products.

Phil: We continue to make great progress toward bringing our innovative PFA catheter volt to market.

Phil: In March we completed enrollment in our CE Mark clinical study, putting us on track to file for international approval.

Phil: Before the end of the year.

Robert Ford: We also recently began enrolling patients in our US clinical trial called Volt PFA, which will generate the data needed to support an FDA approval filing. In structural heart, growth of 13% was led by strong performance in several high-growth areas, including TAVR, LAA, mitral, and tricuspid repair. Structural heart is an area that we have invested in over the past years in order to create a diversified portfolio that can sustainably deliver double-digit growth. In the past, we relied almost exclusively on MitraClip to drive the growth, but today, the portfolio and growth are more balanced and reflect increasing contributions from newer products like Navitor, Amulet, and TriClip. In April, we received FDA approval for TriClip, a first-of-its-kind heart valve repair device designed for the treatment of tricuspid regurgitation or a leaky tricuspid valve.

We also recently began enrolling patients in our US clinical trial called Volt PFA, which will generate the data needed to support an FDA approval filing. In structural heart, growth of 13% was led by strong performance in several high-growth areas, including TAVR, LAA, mitral, and tricuspid repair. Structural heart is an area that we have invested in over the past years in order to create a diversified portfolio that can sustainably deliver double-digit growth.

Phil: We also recently began enrolling patients in our U S clinical trial called volt, AF, which will generate the data needed to support an FDA approval filing.

Phil: In structural heart.

Phil: <unk> growth of 13% was led by strong performance in several high growth areas, including tavern, MAA mitral and tricuspid repair.

Phil: Structural heart is an area that we have invested in over the past years in order to create a diversified portfolio that can sustainably deliver double digit growth in the past, we relied almost exclusively on mitraclip to drive the growth, but today the portfolio and growth are more balanced.

In the past, we relied almost exclusively on MitraClip to drive the growth, but today, the portfolio and growth are more balanced and reflect increasing contributions from newer products like Navitor, Amulet, and TriClip. In April, we received FDA approval for TriClip, a first-of-its-kind heart valve repair device designed for the treatment of tricuspid regurgitation or a leaky tricuspid valve.

Phil: And reflect increasing contributions from newer products like <unk> and Lyft and try clip.

Phil: In April we received FDA approval for <unk>.

Phil: Our first of its kind heart valve repair device designed for the treatment of tricuspid regurgitation or a leaky tricuspid valve.

Robert Ford: Data from the clinical trial supporting this approval demonstrated that patients who received TriClip experienced a significant improvement in the severity of their symptoms and quality of life. We're excited to now offer this life-changing treatment option to people in the United States that suffer from this condition. In rhythm management, growth of 7.5% was led by Aveir, our recently launched leadless pacemaker. Aveir has rapidly captured market share in the single-chamber pacing segment of the market and is now being used for dual-chamber pacing, which is the largest segment of the pacing market. This revolutionary technology is helping to deliver growth rates in our rhythm management business that significantly exceed the overall growth in this market. Lastly, in neuromodulation, sales grew 17%, driven by Eterna, a rechargeable neurostimulation device for pain management.

Data from the clinical trial supporting this approval demonstrated that patients who received TriClip experienced a significant improvement in the severity of their symptoms and quality of life. We're excited to now offer this life-changing treatment option to people in the United States that suffer from this condition. In rhythm management, growth of 7.5% was led by Aveir, our recently launched leadless pacemaker. Aveir has rapidly captured market share in the single-chamber pacing segment of the market and is now being used for dual-chamber pacing, which is the largest segment of the pacing market.

Phil: Data from the clinical trial supporting this approval demonstrated that patients who receive try clip.

Phil: <unk> experienced a significant improvement in the severity of their symptoms and quality of life.

Phil: We're excited to now offer this life changing treatment option for people in the United States that suffer from this condition.

Phil: In rhythm management growth of seven 5% was led by a fair our recently launched Needless pacemaker.

Phil: <unk> has rapidly captured market share in a single chamber pacing segment of the market and is now being used for dual chamber pacing, which is the largest segment of the pacing market.

This revolutionary technology is helping to deliver growth rates in our rhythm management business that significantly exceed the overall growth in this market. Lastly, in neuromodulation, sales grew 17%, driven by Eterna, a rechargeable neurostimulation device for pain management. And in January, we announced the launch of Liberta, the world's smallest rechargeable deep brain stimulation device, which is used to treat movement disorders such as Parkinson's disease. So in summary, we're off to a very good start to the year, exceeding expectations on both top and bottom lines.

Phil: This revolutionary technology is helping to deliver growth rates in our rhythm management business, that's significantly exceed the overall growth in this market.

Phil: And lastly in Neuromodulation sales grew 17% driven by Aeterna rechargeable neurostimulation device for pain management and.

Robert Ford: And in January, we announced the launch of Liberta, the world's smallest rechargeable deep brain stimulation device, which is used to treat movement disorders such as Parkinson's disease. So in summary, we're off to a very good start to the year, exceeding expectations on both top and bottom lines. And as a result, we raised the midpoint of our sales and EPS guidance ranges. We continue to make good progress on our gross margin expansion initiatives, and we're seeing strong returns from the investments we're making across our growth platforms. Our pipeline has continued to be highly productive, delivering several recently new product approvals, and we're very well positioned to continue to deliver strong results for the remainder of the year. And I'll turn over the call to Phil. Thanks, Robert.

Phil: And in January we announced the launch of <unk> the <unk>.

Phil: World's smallest rechargeable deep brain stimulation device, which is used to treat movement disorders, such as Parkinsons disease.

Phil: So in summary, we're off to a very good start to the year exceeding expectations on both top and bottom lines and as a result, we raised the midpoint of our sales and EPS guidance ranges. We continue to make good progress on our gross margin expansion initiatives and we're seeing strong returns from the investments we're making.

And as a result, we raised the midpoint of our sales and EPS guidance ranges. We continue to make good progress on our gross margin expansion initiatives, and we're seeing strong returns from the investments we're making across our growth platforms. Our pipeline has continued to be highly productive, delivering several recently new product approvals, and we're very well positioned to continue to deliver strong results for the remainder of the year. And I'll turn over the call to Phil.

Phil: Across our growth platforms are.

Phil: Pipeline is continued to be highly productive delivering several recently new product approvals and we're very well positioned to continue to deliver strong results for the remainder of the year and then I'll turn it over the call to Phil.

Phil Boudreau: Thanks, Robert. As Mike mentioned earlier, please note that all references to sales growth rates, unless otherwise noted, are on an organic basis. Turning to our Q1 results, sales increased 4.7% on an organic basis, which, as expected, includes the impact of year-over-year decline in COVID testing-related sales. Excluding COVID testing sales, underlying base business organic sales growth was 10.8% in the quarter. Foreign exchange had an unfavorable year-over-year impact of 2.9% on Q1 sales.

Phil: Thanks Robert.

Robert Ford: As Mike mentioned earlier, please note that all references to sales growth rates, unless otherwise noted, are on an organic basis. Turning to our Q1 results, sales increased 4.7% on an organic basis, which, as expected, includes the impact of year-over-year decline in COVID testing-related sales. Excluding COVID testing sales, underlying base business organic sales growth was 10.8% in the quarter. Foreign exchange had an unfavorable year-over-year impact of 2.9% on Q1 sales. During the quarter, we saw the US dollar strengthen versus several currencies, which resulted in exchange having a more unfavorable impact on sales compared to exchange rates at the time of our earnings call in January. Regarding other aspects of the P&L, the adjusted gross margin ratio was 55.7% of sales. Adjusted R&D was 6.7% of sales, and adjusted SG&A was 29.4% of sales in Q1. Lastly, our Q1 adjusted tax rate was 15%.

<expletive> mentioned earlier. Please note that all references to sales growth rates unless otherwise noted are on an organic basis.

Phil: Turning to our first quarter results sales increased four 7% on an organic basis, which as expected includes the impact of year over year decline in COVID-19 testing related sales.

Phil: Excluding COVID-19 testing sales underlying base business organic sales growth was 10, 8% in the quarter.

Phil: Foreign exchange had an unfavorable year over year impact of two 9% on first quarter sales.

During the quarter, we saw the US dollar strengthen versus several currencies, which resulted in exchange having a more unfavorable impact on sales compared to exchange rates at the time of our earnings call in January. Regarding other aspects of the P&L, the adjusted gross margin ratio was 55.7% of sales. Adjusted R&D was 6.7% of sales, and adjusted SG&A was 29.4% of sales in Q1. Lastly, our Q1 adjusted tax rate was 15%.

Phil: During the quarter, we saw the U S dollar strengthen versus several currencies, which resulted in an exchange having a more unfavorable impact on sales compared to exchange rates at the time of our earnings call in January.

Phil: Regarding other aspects of the P&L. The adjusted gross margin ratio was 55, 7% of sales.

Phil: Adjusted R&D was six 7% of sales and adjusted SG&A was 29, 4% of sales in the first quarter.

Phil: Lastly, our first quarter adjusted tax rate was 15%.

Robert Ford: Turning to our outlook for the full year, we now forecast full-year adjusted earnings per share of $4.55 to 4.70, which represents an increase at the midpoint of the range compared to the guidance range we provided in January. We also raised the midpoint of our guidance for organic sales growth. We now forecast organic sales growth, excluding COVID testing, to be in the range of 8.5% to 10%. Based on current rates, we expect exchange to have an unfavorable impact of approximately 2.5% on full-year reported sales, which includes an expected unfavorable impact of approximately 3% on second-quarter reported sales. Lastly, for the second quarter, we forecast adjusted earnings per share of $1.08 to 1.12. With that, we'll now open the call for questions.

Turning to our outlook for the full year, we now forecast full-year adjusted earnings per share of $4.55 to 4.70, which represents an increase at the midpoint of the range compared to the guidance range we provided in January. We also raised the midpoint of our guidance for organic sales growth. We now forecast organic sales growth, excluding COVID testing, to be in the range of 8.5% to 10%.

Phil: Turning to our outlook for the full year, we now forecast full year adjusted earnings per share of $4 55 to $4 70.

Phil: Which represents an increase at the midpoint of the range compared to the guidance range. We provided in January.

Phil: We also raised the midpoint of our guidance for organic sales growth.

We now forecast organic sales growth, excluding COVID-19 testing to be in the range of eight 5% to 10%.

Based on current rates, we expect exchange to have an unfavorable impact of approximately 2.5% on full-year reported sales, which includes an expected unfavorable impact of approximately 3% on second-quarter reported sales. Lastly, for the second quarter, we forecast adjusted earnings per share of $1.08 to 1.12. With that, we'll now open the call for questions.

Phil: Based on current rates, we expect exchange to have an unfavorable impact of approximately two 5% on full year reported sales, which includes an expected unfavorable impact of approximately 3% on second quarter reported sales.

Phil: Lastly for the second quarter, we forecast adjusted earnings per share of $1 eight to $1 12.

With that we'll now open the call for questions.

Operator: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star 11 again. For optimal sound quality, we kindly ask that you please use your handset instead of your speakerphone when asking your question. Again, that's star 11 to ask a question. Please stand by while we compile the Q&A roster. Our first question will come from Robbie Marcus from JPMorgan. Your line is open.

Speaker Change: Thank you.

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And our first question will come from Robbie Marcus from Jpmorgan. Your line is open.

Robert Justin Marcus: Oh, great. Thanks for taking the question. Congrats on a nice Q1 here. Two for me. I'll just ask them both upfront. First, Robert, we almost never see Abbott raise guidance, particularly on the top line in Q1. Looking back over the past, I don't know, five, 10 years, it's very rare. So first part is, what gave you the confidence to raise the midpoint of the guidance this early on in the year? And then second, obviously, there's been a lot of concern during the quarter with competitors' loss in a case for NEC as it relates to infant nutrition. I was hoping you could address that. What's your stance on the ongoing litigation? I think there's about 1,000 cases that have been filed. And any upcoming data points or timelines we should be looking for? Thanks a lot.

Robbie Marcus: Oh, great. Thanks for taking the question. Congrats on a nice Q1 here. Two for me. I'll just ask them both upfront. First, Robert, we almost never see Abbott raise guidance, particularly on the top line in Q1. Looking back over the past, I don't know, five, 10 years, it's very rare. So first part is, what gave you the confidence to raise the midpoint of the guidance this early on in the year?

Robert Justin Marcus: Oh, great. Thanks for taking the question congrats on a nice first quarter here.

Robert Justin Marcus: Two from me I'll, just ask them both upfront.

Robert Justin Marcus: First Robert.

Robert Justin Marcus: We almost never see Abbitt Reyes.

Robert Justin Marcus: <unk>, particularly on the top line in the first quarter.

Robert Justin Marcus: Looking back over the past I don't know 510 years that it's very rare. So first part is what gave you the confidence to raise it.

Robert Justin Marcus: The midpoint of the guidance this early on in the year.

And then second, obviously, there's been a lot of concern during the quarter with competitors' loss in a case for NEC as it relates to infant nutrition. I was hoping you could address that. What's your stance on the ongoing litigation? I think there's about 1,000 cases that have been filed. And any upcoming data points or timelines we should be looking for? Thanks a lot.

Robert Justin Marcus: And then second.

Robert Justin Marcus: Obviously theres been a lot of concern during the quarter.

Robert Justin Marcus: With competitors.

Robert Justin Marcus: Loss and a case for any C. As it relates to infant nutrition I was hoping you could address that.

Robert Justin Marcus: What's your stance on on the ongoing litigation I think Theres about 1000 cases that have been filed and any upcoming data points or timelines, we should be looking for thanks a lot.

Robert Ford: Sure, Robbie. So let's go first to your question on the guidance. Yeah, you're right. I guess I had to go back and take a look at that. I think the last time we did raise in Q1 was in 2016. I'd say the framework here, Robbie, as we've always done, is we set a guidance at the beginning of the year, which we believe is top-tier. And then throughout the year, we want to beat that guidance, right? And we consider top-tier to be high single-digit, double-digit EPS growth. And that's obviously excluding the COVID testing portion, which is what investors are really more focused on. So that was the guidance that we set a couple of months ago back in January. And we'll target always have that top-tier guidance and find the appropriate balance between the opportunities and obviously the challenges that bracket that range.

Speaker Change: Sure Robbie.

Speaker Change: <unk>.

So let's go first to your question on the guidance.

Yes, Youre right.

Speaker Change: I guess I had to go back and take a look at that I think the last time, we did raise in Q1 was in 2016.

Speaker Change: I'd say the framework here Robbie as we've always done is we set a guidance at the beginning of the year, which we believe is top tier.

And throughout the year at that throughout the year, we want to beat that guidance right and we considered top tier to be high single digit double digit EPS growth.

And we consider top-tier to be high single-digit, double-digit EPS growth. And that's obviously excluding the COVID testing portion, which is what investors are really more focused on. So that was the guidance that we set a couple of months ago back in January. And we'll target always have that top-tier guidance and find the appropriate balance between the opportunities and obviously the challenges that bracket that range.

Speaker Change: That's obviously, excluding the Covid testing portion, which is what investors are really more focused on.

Speaker Change: So that was the guidance that we set.

Speaker Change: Couple of months ago back in January and will target always.

Speaker Change: Have that top tier guidance and find the appropriate balance between the opportunities.

Speaker Change: And obviously the challenges that bracket bracket that range.

Robert Ford: If you remember, in January, I said I thought that there was more opportunities than risks. And I think that some of the risks that we saw in January, I still think they haven't gone away. They're still there, whether it's geopolitics or whether it's FX, those are still there. But clearly, the performance of the business continues to be very, very strong. And in some of our businesses, a lot of our businesses are actually accelerating in performance. So as I said in my comments, five consecutive quarters of double-digit growth here. So you look at each of the businesses: EPD, three consecutive years of double-digit growth, great margin expansion. And the teams are now working to be able to introduce biosimilars in all the markets that we're participating in. Nutrition has done an incredible job at recovering share and growing our adult business.

If you remember, in January, I said I thought that there was more opportunities than risks. And I think that some of the risks that we saw in January, I still think they haven't gone away. They're still there, whether it's geopolitics or whether it's FX, those are still there. But clearly, the performance of the business continues to be very, very strong. And in some of our businesses, a lot of our businesses are actually accelerating in performance. So as I said in my comments, five consecutive quarters of double-digit growth here.

Speaker Change: If you remember in January I said, I thought that there was more opportunities than risks.

Speaker Change: And.

Speaker Change: I think that some of the risks that we saw in January.

Speaker Change: I still think they haven't gone away. They are still there, whether it's geopolitics or whether it's FX those are still there, but clearly the performance of the business continues to be very very strong and in some of our businesses a lot of our businesses actually accelerating.

Speaker Change: Performance of this as I said in my comments five consecutive quarters of double digit growth here. So as you look at each of the businesses ETD.

So you look at each of the businesses: EPD, three consecutive years of double-digit growth, great margin expansion. And the teams are now working to be able to introduce biosimilars in all the markets that we're participating in. Nutrition has done an incredible job at recovering share and growing our adult business.

Speaker Change: Consecutive three consecutive years of double digit growth great margin expansion and the teams are now working to be able to introduce.

Speaker Change: Biosimilars in all the markets that that that where we're.

Speaker Change: We're participating in nutrition has done an incredible job at recovering share.

Speaker Change: And growing our adult business.

Robert Ford: We've grown a lot over $1 billion versus 2019. Diagnostics continues to have a great track record here of outperforming the market. We've got some great large account wins both in the US and internationally that we're rolling out into this year. And medical devices, I mean, what can I tell you? It's just been a real strong performer. The teams have done an incredible job there. Last year, we were the fastest-growing med tech company, at least from what I've seen from our guidance and from the other guidances in the market. That's what it seems to be again this year. So you put all that together, plus the pipeline that's been contributing to an accelerated level, great new product approvals.

We've grown a lot over $1 billion versus 2019. Diagnostics continues to have a great track record here of outperforming the market. We've got some great large account wins both in the US and internationally that we're rolling out into this year. And medical devices, I mean, what can I tell you? It's just been a real strong performer. The teams have done an incredible job there.

Speaker Change: We've grown adult over $1 billion versus 2019 diagnostics continues to have a great track record here of outperforming the market. We've got some great large account wins, both in the U S and internationally that we're rolling out into this year and medical devices. What can I tell you. It's just been a real.

Speaker Change: <unk> strong performer of the teams have done an incredible job there last year, we were the fastest growing.

Last year, we were the fastest-growing med tech company, at least from what I've seen from our guidance and from the other guidances in the market. That's what it seems to be again this year. So you put all that together, plus the pipeline that's been contributing to an accelerated level, great new product approvals. I put all that together, and I just feel that this type of performance that we deliver just gives us the confidence for the remainder of the outlook of the year. So we felt comfortable raising the guidance again in Q1, which is, as you pointed out, something that we don't usually do.

Speaker Change: Med Tech company at least from what I've seen from our guidance and from the other guidance is in a market. That's what it seems to be again. This year. So you put all that together plus the pipeline that's been contributing to an accelerated level.

Speaker Change: Great New product approvals I put all that together and I just feel that this type of performance that we delivered just gives us confidence for the remainder of the outlook of the year. So we felt comfortable.

Robert Ford: I put all that together, and I just feel that this type of performance that we deliver just gives us the confidence for the remainder of the outlook of the year. So we felt comfortable raising the guidance again in Q1, which is, as you pointed out, something that we don't usually do. And I continue to believe going into Q2, as we move through, that there's probably more opportunities than risks here as we move forward. So I guess that's the framework of raising our guidance in Q1, which is something that we usually don't do. Just great performance and great momentum. And then your other question was regarding the net cases. I'd say from a date, yeah, we have some court cases that will happen in July. So that's maybe a milestone that we want to look at.

Speaker Change: Raising the guidance.

Again.

Speaker Change: In the first quarter, which is as you pointed out something that we don't we don't usually do.

And I continue to believe going into Q2, as we move through, that there's probably more opportunities than risks here as we move forward. So I guess that's the framework of raising our guidance in Q1, which is something that we usually don't do. Just great performance and great momentum. And then your other question was regarding the net cases. I'd say from a date, yeah, we have some court cases that will happen in July. So that's maybe a milestone that we want to look at.

Speaker Change: And I continue to believe going into.

Speaker Change: Going into the second quarter as we move through that there's probably more opportunities than risks here as.

Speaker Change: As we move forward so.

Speaker Change: That's the framework of raising our guidance in the first quarter, which is something that we usually don't do just great performance and great momentum.

Speaker Change: And then your other question was regarding.

Speaker Change: Regarding the net cases.

Speaker Change: <unk>.

Speaker Change: I'd say from a from from.

Speaker Change: Dave Yes, we have we have some.

Speaker Change: Some court.

Speaker Change: Cases that will happen.

Speaker Change: In July so thats maybe.

Speaker Change: Milestone that we want to look at but if you were asking me about kind of our framework of how we look at this I would say for decades.

Robert Ford: But if you were asking me about kind of our framework of how we look at this, I'd say for decades, we've provided specialized nutrition products that help doctors. And I think that's a key thing here. It helps doctors provide the lifesaving nutrition to the premature infants. And how you feed a premature infant, it's a medical decision, Robbie. And healthcare providers, they're going to use a range of options to meet the unique needs of each baby. And that includes mother's milk. That includes pasteurized donor's milk. But that also includes pre-term infant formula. Because where mother's milk is not available, there is not a sufficient supply of donor milk to satisfy the nutritional needs of all of these premature infants that are born in the US.

But if you were asking me about kind of our framework of how we look at this, I'd say for decades, we've provided specialized nutrition products that help doctors. And I think that's a key thing here. It helps doctors provide the lifesaving nutrition to the premature infants. And how you feed a premature infant, it's a medical decision, Robbie. And healthcare providers, they're going to use a range of options to meet the unique needs of each baby.

Speaker Change: We've provided specialized nutrition products that help doctors and I think that's a key thing here.

Speaker Change: It helps doctors provide the lifesaving nutrition to the premature infants and.

Speaker Change: And how your feet a premature infant it's a medical decision Rafi and health care providers, they're going to use a range of options to meet the unique needs of each baby.

And that includes mother's milk. That includes pasteurized donor's milk. But that also includes pre-term infant formula. Because where mother's milk is not available, there is not a sufficient supply of donor milk to satisfy the nutritional needs of all of these premature infants that are born in the US. Quite frankly, even when they're available for some premature infants, human milk may lack some of the calories, the proteins, the vitamins, etc., that are necessary to support the nutritional needs of the premature infants. That mother's milk needs to be fortified in order to boost the nutritional output.

Speaker Change: And that includes mother's milk that includes pasteurized stoners milk, but that also includes predetermined from formula because we're mother's milk is not available there is not a sufficient supply of donor milk to satisfy the nutritional needs of all of these premature infants that are born in the U S and quite frankly, even.

Robert Ford: Quite frankly, even when they're available for some premature infants, human milk may lack some of the calories, the proteins, the vitamins, etc., that are necessary to support the nutritional needs of the premature infants. That mother's milk needs to be fortified in order to boost the nutritional output. The medical community considers these products to be a critical part of the standard of care for feeding premature infants. Most of the societies, when you read their positions, consider it a standard of care to use these products. The doctors who work in the NICUs have used our products for decades, and they continue to do so today. Countless babies, Robbie, have benefited from these products, life-saving experiences over many, many years. There are clinical studies that have repeatedly established that these products are safe.

Speaker Change: When they are available for some premature infants human milk may lack some of the calories of proteins, the vitamins et cetera that are necessary to support.

Speaker Change: The nutritional needs of the premature infants, so that milk that mother's milk needs to be fortified in order to boost the nutritional output.

The medical community considers these products to be a critical part of the standard of care for feeding premature infants. Most of the societies, when you read their positions, consider it a standard of care to use these products. The doctors who work in the NICUs have used our products for decades, and they continue to do so today. Countless babies, Robbie, have benefited from these products, life-saving experiences over many, many years. There are clinical studies that have repeatedly established that these products are safe.

Speaker Change: And the medical community they consider these products to be critical.

Speaker Change: A critical part of the standard of care for feeding premature infants most of the societies. When you read when you read their positions. It is a standard of care to use these products. So the doctors who work in the Nic use.

Speaker Change: Use our products for decades, and they continue to do so today.

Speaker Change: And countless babies Ravi had been that had benefited from these products lifesaving experiences over many many years and there are clinical studies that are repeatedly established.

Speaker Change: These products are safe. So yes. So these litigation cases, they're really seeking to advance a theory.

Robert Ford: So these litigation cases, they're really seeking to advance a theory promoted by plaintiff lawyers that distorts the science and it distorts everything that we know. And it's not supported by the medical community. So we're preparing for our cases to be able to kind of lay out the facts, the science, and the data. And we stand behind our products.

So these litigation cases, they're really seeking to advance a theory promoted by plaintiff lawyers that distorts the science and it distorts everything that we know. And it's not supported by the medical community. So we're preparing for our cases to be able to kind of lay out the facts, the science, and the data. And we stand behind our products.

Speaker Change: Promoted by plaintiff lawyers that distorts the science and it distorts.

Speaker Change: Distorts everything that we know and it's not supported.

Speaker Change: By the medical community. So we're.

Speaker Change: We're preparing for our cases to be able to kind of lay out.

Speaker Change: The facts, the science and the data and we stand behind our products.

Robert Justin Marcus: Appreciate it, Robert. Thanks a lot.

Robbie Marcus: Appreciate it, Robert. Thanks a lot.

I appreciate that Robert Thanks, a lot.

Operator: Thank you. Our next question will come from Larry Biegelsen from Wells Fargo. Your line is now open.

Speaker Change: Thank you.

Speaker Change: Our next question will come from Larry <unk> from Wells Fargo. Your line is now open.

Lawrence H. Biegelsen: Good morning. I'll echo Robbie's congratulations on the strong start to the year here. So Robert, I just wanted to focus on EP. So multi-part question here, but just one. So the EP business grew nicely in the first quarter in the US and outside the US. Can you talk about what drove that, what you're seeing with PFA and the different geographies, your expectations for your EP business going forward before the Vault launch? And just lastly, so it sounds like we should expect Vault approval in Europe sometime next year based on the filing date. Just want to confirm that. Thanks for taking the question.

Larry Biegelsen: Good morning. I'll echo Robbie's congratulations on the strong start to the year here. So Robert, I just wanted to focus on EP. So multi-part question here, but just one. So the EP business grew nicely in the first quarter in the US and outside the US. Can you talk about what drove that, what you're seeing with PFA and the different geographies, your expectations for your EP business going forward before the Vault launch? And just lastly, so it sounds like we should expect Vault approval in Europe sometime next year based on the filing date. Just want to confirm that. Thanks for taking the question.

Larry: Good morning, all.

Larry: I'll Echo Robert Congratulations on that.

Larry: The strong start to the year here.

Larry: So Robert I, just wanted to focus on EEP.

Larry: So multi part question here, but just one.

Robert B. Ford: So the EP business grew nicely in the first quarter in the U S and outside the U S. Can you talk about what drove that what youre seeing with PSA in the different geographies.

Robert B. Ford: Your expectations for your EP business going forward.

Robert B. Ford: Before the volt launch and just lastly.

Robert B. Ford: So it sounds like we should expect bolt approval in Europe sometime next year based on the filing date.

Speaker Change: I just wanted to confirm that thanks for taking the question.

Robert Ford: Sure. Yeah. Like I said in my opening comments, we completed the trial. There's a six-month follow-up, Larry. So that means that we will be on target here to file for CE mark by the end of this year. And then it's just going to depend on that process. So I think that's probably our anchor point here is getting the filing in before the end of the year. Yeah. I mean, I'm not surprised by our EP growth. I know many on the call might be, but I'm not surprised. First of all, it's an important therapy. It's an under-penetrated disease. So we know there's plenty of growth in this segment. And as a result of that, it's highly competitive, right? But we haven't been surprised by the growth. If you look at PFA, it's been in Europe for three years.

Speaker Change: Sure Yeah like I said in my opening comments, we completed we completed the trial, there's a six month follow up Larry So that means that we will be on target here to file for.

Speaker Change: CE Mark by the end of this year.

Speaker Change: And then it's just going to depend on.

Speaker Change: That process, so I think thats.

Speaker Change: That's probably our anchor point here is getting the filing in before the end of the year.

Speaker Change: <unk>.

Speaker Change: Yes.

Speaker Change: I'm not surprised by our EP growth I know many many on the call might be.

I know many on the call might be, but I'm not surprised. First of all, it's an important therapy. It's an under-penetrated disease. So we know there's plenty of growth in this segment. And as a result of that, it's highly competitive, right? But we haven't been surprised by the growth. If you look at PFA, it's been in Europe for three years.

Speaker Change: But I'm not surprised.

Speaker Change: We first of all its an important.

Speaker Change: It's an important therapy, it's an underpenetrated disease. So we know there's plenty of growth in this segment.

Speaker Change: And as a result of that.

Speaker Change: Really competitive right so.

Speaker Change: But we haven't been surprised by the growth.

Speaker Change: If you look at PFA.

<unk> been in Europe for three years, if you average our growth rate over the last three years in Europe, we've been growing we've.

Robert Ford: If you average our growth rate over the last three years in Europe, we've been growing mid-teens. The growth remains broad-based. It was broad-based in Europe again this quarter where we saw double-digit growth in ablation catheters. So not just on the mapping side, on the ablation catheter side also, but then also great growth on the mapping side. And yeah, this technology has now come to the US. I think we probably had maybe two months of seeing the technology be rolled out here in the US. I think the competitors have been very aggressive here in terms of bringing the technology to the accounts in the US. I can say we've mapped a lot of those cases, Larry. I'm not going to say we've been in every single case, but I'd say a vast majority of the cases we've been in there.

If you average our growth rate over the last three years in Europe, we've been growing mid-teens. The growth remains broad-based. It was broad-based in Europe again this quarter where we saw double-digit growth in ablation catheters. So not just on the mapping side, on the ablation catheter side also, but then also great growth on the mapping side. And yeah, this technology has now come to the US.

Speaker Change: We've been growing mid teens.

Speaker Change: And.

Speaker Change: The growth remains broad base. It was broad based in Europe again, this quarter, where we saw double digit growth in an ablation catheters. So not just on the mapping side on the ablation catheter side also but.

Speaker Change: Then also a great growth on the mapping side and yet this technology has now come to the U S.

I think we probably had maybe two months of seeing the technology be rolled out here in the US. I think the competitors have been very aggressive here in terms of bringing the technology to the accounts in the US. I can say we've mapped a lot of those cases, Larry. I'm not going to say we've been in every single case, but I'd say a vast majority of the cases we've been in there.

Speaker Change: I think we probably had maybe two months.

Speaker Change: Seeing the technology be rolled out here in the U S. I think the competitors have been very aggressive here in terms of bringing the technology to the accounts in the U S and I can say, we've mapped a lot of those cases, Larry I'm not going to say we've been in every single case, but I would say a vast majority of the <unk>.

Speaker Change: As we have been in there and there are some similarities to Europe, but there are some differences to Europe.

Robert Ford: There are some similarities to Europe, but there are some differences to Europe. I think one of the things that we saw in Europe was that there was this inclination to use the technology starting off as kind of a one-shot. That had an impact more on the cryo business than I would say on the RF side. That's what we saw in our mapping cases. We saw here, at least in the first couple of months, that's where a large portion of those cases occurred. At least the ones that we mapped were in places where they were traditionally using cryo. I think the difference that we saw a little bit in Europe is that at least 90% of the cases that we were part of, directly or indirectly, were using mapping. That number was lower in Europe.

There are some similarities to Europe, but there are some differences to Europe. I think one of the things that we saw in Europe was that there was this inclination to use the technology starting off as kind of a one-shot. That had an impact more on the cryo business than I would say on the RF side. That's what we saw in our mapping cases. We saw here, at least in the first couple of months, that's where a large portion of those cases occurred. At least the ones that we mapped were in places where they were traditionally using cryo.

I think one of the things that we saw in Europe.

Speaker Change: Was there was this <unk>.

Speaker Change: Inclination to use the technology, starting off as kind of a one shot so.

Speaker Change: So that had an impact more on the cryo business and I would say on the RF side and.

Speaker Change: That's what we saw in our mapping cases, we saw here at least in the first couple of months, that's where a large portion of those cases occurred at least the ones that we mapped where in places where there were traditionally using cryo.

I think the difference that we saw a little bit in Europe is that at least 90% of the cases that we were part of, directly or indirectly, were using mapping. That number was lower in Europe. So that's probably a little bit of the difference I saw here in the US. And that bodes well for us, right? Our EnSite system, our mapping system, our mapping catheters are widely viewed as an excellent option here for mapping these PFA cases. We have a large installed base. Customers are familiar with it. Don't need to make room. Don't need to fight for capital. We've got best-in-class clinical support. And the architecture here is open, as I've said in previous calls.

I think the difference that we saw a little bit in Europe is that at least 90% of the cases that we were part of directly or indirectly.

Speaker Change: We're using mapping.

Speaker Change: Using mapping that that number was slow it was lower in Europe, So thats, probably a little bit of a difference I saw here in the U S.

Robert Ford: So that's probably a little bit of the difference I saw here in the US. And that bodes well for us, right? Our EnSite system, our mapping system, our mapping catheters are widely viewed as an excellent option here for mapping these PFA cases. We have a large installed base. Customers are familiar with it. Don't need to make room. Don't need to fight for capital. We've got best-in-class clinical support. And the architecture here is open, as I've said in previous calls. So it integrates well with these PFA catheters. We actually recently released a software upgrade last month that provides even better visualization to these catheters and potential for faster procedures and less fluoro time. So I think this is a perfect combination, quite frankly, in a time where there's going to be a market transition. There's a lot of new products. There's a lot of choices.

Speaker Change: And that bodes well for US right. Our end site system, our mapping system. Our mapping catheters are widely viewed as an excellent option here for mapping. These PFA cases, we have a large installed base customers are familiar with it.

Speaker Change: You need to make room don't need a fight for capital we've got best in class clinical support and the.

Speaker Change: Texture here as open as I've said in previous calls so it integrates well with these with these PFA catheters, we actually recently released a software upgrade.

So it integrates well with these PFA catheters. We actually recently released a software upgrade last month that provides even better visualization to these catheters and potential for faster procedures and less fluoro time. So I think this is a perfect combination, quite frankly, in a time where there's going to be a market transition. There's a lot of new products. There's a lot of choices.

Speaker Change: Last month that provides even better visualization to these catheters.

Speaker Change: And potential for fast procedures and less flow real time so.

Speaker Change: I think this is a perfect combination.

Speaker Change: Quite frankly at a time, where there's going to be.

Speaker Change: Market transition, there's a lot of new products. There is a lot of choices and when you have a situation like that I think flexibility is key and that's what we heard.

Robert Ford: And when you have a situation like that, I think flexibility is key. And that's what we heard from our customers. One data point that I thought was also interesting to your question of what helped drive that. In the cases that we were part of and we saw, we also observed that an RF catheter was pulled in about a quarter of the cases that we saw. So on top of the PFA catheter, an RF catheter was pulled to do touch-ups, etc. So I'd say right now, everything that we've seen in Europe on the positive side is happening. And then I think there's some interesting dynamics here in the US that could be favorable for us also. But it's still very early.

And when you have a situation like that, I think flexibility is key. And that's what we heard from our customers. One data point that I thought was also interesting to your question of what helped drive that. In the cases that we were part of and we saw, we also observed that an RF catheter was pulled in about a quarter of the cases that we saw. So on top of the PFA catheter, an RF catheter was pulled to do touch-ups, etc. So I'd say right now, everything that we've seen in Europe on the positive side is happening. And then I think there's some interesting dynamics here in the US that could be favorable for us also. But it's still very early.

Speaker Change: From our customers' one data point that I thought was also interesting to your question of what helped drive that.

Speaker Change: In the cases that we were part of when we saw.

Speaker Change: We also observe that.

Speaker Change: In RF catheter was pulled in about a quarter of the cases that we saw.

Speaker Change: So on top of the PFA catheter on RF catheter was pulled to.

Do touch ups et cetera. So.

Speaker Change: I'd say right now everything that we've seen in Europe on.

On the positive side is happening and I think there's some interesting dynamics here in the U S that could be favorable for us also but it's still very early.

Robert Ford: If I look at March, we had probably one of our most, when we look at cases per day, that was probably one of our highest months. So so far, so good. We're excited about the technology. We're excited about our program. We released data on our program in some recent medical meetings that occurred. The feedback from those that have been using our product are very positive. The integration with EnSite, including the tissue contact force algorithm and the visualization, all of that is seen as a real promise and a differentiator versus what's being used today, so.

Speaker Change: And.

If I look at March, we had probably one of our most, when we look at cases per day, that was probably one of our highest months. So so far, so good. We're excited about the technology. We're excited about our program. We released data on our program in some recent medical meetings that occurred. The feedback from those that have been using our product are very positive. The integration with EnSite, including the tissue contact force algorithm and the visualization, all of that is seen as a real promise and a differentiator versus what's being used today, so.

Speaker Change: If I look at March we had probably one of our most.

Speaker Change: We look at cases per day.

Speaker Change: One of our highest months so.

Speaker Change: So this.

So far so good and we're excited about the technology. We are excited about our program.

Speaker Change: We released data on our program and some recent medical.

Speaker Change: Meetings that occurred.

Speaker Change: And the feedback from those that have been using our product are very positive and the integration with insight.

Speaker Change: Including like the tissue contact force algorithm and the visualization all of that is seen as a real promise and a differentiator versus what's being used today. So.

Lawrence H. Biegelsen: Thanks so much.

Larry Biegelsen: Thanks so much.

Thanks, so much.

Operator: Thank you. Our next question will come from Josh Jennings from Cowen. Your line is now open.

Speaker Change: Thank you.

Speaker Change: Our next question will come from Josh Jennings from Cowen. Your line is now open.

Joshua Thomas Jennings: Good morning. Thanks for taking the questions. Great to see the strong start here. A few more results. Robert, I was hoping to just ask first on Libre. Just internationally, any other payment or coverage decisions that we should have on our radar in various countries? Sounds like you've made some nice progress already in Germany. Then in the US, I was hoping you could just help or share your thoughts on the share gain opportunity in the integrated pump segment of the CGM market versus the share loss risk in the type 2 non-insulin cash pay segment with a competitive launch here early in 2024. I just have one follow-up.

Josh Jennings: Good morning. Thanks for taking the questions. Great to see the strong start here. A few more results. Robert, I was hoping to just ask first on Libre. Just internationally, any other payment or coverage decisions that we should have on our radar in various countries? Sounds like you've made some nice progress already in Germany. Then in the US, I was hoping you could just help or share your thoughts on the share gain opportunity in the integrated pump segment of the CGM market versus the share loss risk in the type 2 non-insulin cash pay segment with a competitive launch here early in 2024. I just have one follow-up.

Joshua Thomas Jennings: Good morning, Thanks for taking the questions and great to see the strong start here.

Joshua Thomas Jennings: Q1 results.

Joshua Thomas Jennings: Robert I was hoping to just.

Joshua Thomas Jennings: First on Libre.

Joshua Thomas Jennings: Internationally.

Joshua Thomas Jennings: Any other payment coverage decisions that we should have on our radar in various countries.

Robert B. Ford: It sounds like you've made some nice progress already in Germany, and then in the U S. I was hoping you could just hope I hope.

Robert B. Ford: Share your thoughts on the share gain opportunity in integrated pump segment of CGM market versus the share loss risk in the type two non insulin cash pay segment with it with a competitive launch here early in 2024, and just have one follow up.

Robert Ford: Sure. On your international question, I mean, it's always difficult to forecast exactly by month or quarter coverage kind of payment decisions. I can tell you, though, that the team has a full global map of all the work that's being done regarding clinical information and negotiations, etc. So it's difficult to kind of forecast it. But what I have said is on previous calls and in some of my prepared remarks that I think you're going to see this just this build that will be occurring globally in the market as the data proves and shows the clinical, medical, and health economic benefit by reimbursing for this patient population. And I think we're well positioned there. Internationally, I think we got some pretty large markets already: Canada, Japan, France, Italy, Germany. Those are markets that are either fully reimbursed or starting their process.

Speaker Change: Sure on the.

Speaker Change: On your international question, I mean, it's always difficult to forecast exactly by month or quarter.

Speaker Change: Coverage kind of payment decisions.

Speaker Change: I can tell you, though that the team has a full global map of all the work that's being done regarding clinical information negotiations et cetera. So.

Speaker Change: So it's difficult to kind of forecast it but what I have said on previous calls and in some of my prepared remarks that I think youre going to see this.

Speaker Change: Just as this build that will be occurring globally in the market as the data proves and shows the clinical medical and health economic benefit by reimbursing for this patient population and I think we're well positioned there internationally I think we got some pretty large markets already Canada, Japan.

And I think we're well positioned there. Internationally, I think we got some pretty large markets already: Canada, Japan, France, Italy, Germany. Those are markets that are either fully reimbursed or starting their process. And like I said, I think you'll see as the year progresses, whether it's in medical events or just as the year progresses, I think you'll see more coverage decisions. Maybe they don't get splashy big PR news, but we are seeing continuous increasing there on that. On the US side, I guess I disagree with your premise that I'm going to be trading share gains on the pump side for share losses on the non-insulin side.

Speaker Change: And France, Italy, Germany, those are markets that are.

Speaker Change: Either fully reimbursed are starting their process and like I said I think youll see.

Robert Ford: And like I said, I think you'll see as the year progresses, whether it's in medical events or just as the year progresses, I think you'll see more coverage decisions. Maybe they don't get splashy big PR news, but we are seeing continuous increasing there on that. On the US side, I guess I disagree with your premise that I'm going to be trading share gains on the pump side for share losses on the non-insulin side. I mean, right now, I'm looking at the data, third-party audited data, seven out of every 10 new prescriptions for this basal population, which is primarily served by the primary care channel. Seven out of 10 are going to Libre. And I think our product's going to get even more competitive and compelling. So I think this is a great opportunity.

Speaker Change: As the year progresses, whether it's medical events or just as the year progresses, I think youll see more coverage decisions, maybe they don't get splashy.

Speaker Change: PR news, but we are seeing continuous increasing there on that on the U S side.

Speaker Change: I guess I would disagree with your premise that I'm going to be trading share gains on the pump side for share losses on the <unk>.

On the.

Speaker Change: On the on the non insulin side I mean, I'm just right now I'm looking at the data third party audited data seven out of every 10, new prescriptions for this basal population, which is primarily primarily served by the primary care channel seven out of 10 are going to Libre and I.

I mean, right now, I'm looking at the data, third-party audited data, seven out of every 10 new prescriptions for this basal population, which is primarily served by the primary care channel. Seven out of 10 are going to Libre. And I think our product's going to get even more competitive and compelling. So I think this is a great opportunity.

Speaker Change: Our products to get even more competitive and compelling.

Speaker Change: So I think this is a great opportunity and our objective here is to maintain kind of our shared dominance and our share leadership.

Robert Ford: Our objective here is to maintain kind of our shared dominance and our shared leadership as it results in this patient segment. But we do have an opportunity here to participate a little bit more actively in what is a little bit more of a smaller segment of the population, but nonetheless a very important one, which is the AID and the market system. So there's 150 to 200 thousand new starts a year. There's an opportunity for shared gain also of existing users. I think that the opportunity to bring a dual analyte sensor with ketones. We showed some data at ATTD this year that showed the safety benefit or the value proposition of a dual analyte sensor for AID system. So I think that's going to be a compelling value proposition. And then we're working with all the pump companies here.

Our objective here is to maintain kind of our shared dominance and our shared leadership as it results in this patient segment. But we do have an opportunity here to participate a little bit more actively in what is a little bit more of a smaller segment of the population, but nonetheless a very important one, which is the AID and the market system. So there's 150 to 200 thousand new starts a year.

Speaker Change: As it results to as it results in this patient segment, but we do have an opportunity here to two.

Speaker Change: To participate a little bit more actively in what is a little bit more of a smaller segment of the population, but nonetheless, a very important one.

Speaker Change: And the market system so.

Speaker Change: There is a 150 to 200 <unk> thousand starts a year.

There's an opportunity for shared gain also of existing users. I think that the opportunity to bring a dual analyte sensor with ketones. We showed some data at ATTD this year that showed the safety benefit or the value proposition of a dual analyte sensor for AID system. So I think that's going to be a compelling value proposition. And then we're working with all the pump companies here.

Speaker Change: There is an opportunity for share gain also of existing users.

Speaker Change: I think that the opportunity to bring a dual analyte send through with key tones. We showed some data at <unk>. This year that showed safety benefit or the value proposition of a dual analyte sensor for an <unk> system.

Speaker Change: So I think thats going to be a compelling value proposition and then we're working with all the all the pump companies here and I think as the year progresses, we will see connectivity occur whether it's with libre, two plus our streaming product or whether it's with libre. Three. So this is an area that we're focusing on.

Robert Ford: I think as the year progresses, we'll see connectivity occur, whether it's with Libre 2 Plus, our streaming product, or whether it's with Libre 3. So this is an area that we're focusing on. It's a new segment for us to compete in. But I don't think that we're going to be taking our eye off the ball as it relates to the basal opportunity that exists, so.

I think as the year progresses, we'll see connectivity occur, whether it's with Libre 2 Plus, our streaming product, or whether it's with Libre 3. So this is an area that we're focusing on. It's a new segment for us to compete in. But I don't think that we're going to be taking our eye off the ball as it relates to the basal opportunity that exists, so.

Speaker Change: And it's a new segment for us to compete in but I don't think that were going to be taken our eye off the ball as it relates to.

Speaker Change: As it relates to.

The basal opportunity that exists.

Joshua Thomas Jennings: Understood. Thanks. I just wanted to ask on the transcatheter tricuspid market. Congratulations on the TriClip approval. But there's been some questions around the patient opportunity breakdown between TEER, TriClip, and replacement with Evoque. Maybe just any internal team thoughts on that patient opportunity breakdown. Then anything you could share on the pricing strategy for TriClip in the setting of competitor pricing. It's a replacement device at a significant premium. Thanks for taking the questions.

Josh Jennings: Understood. Thanks. I just wanted to ask on the transcatheter tricuspid market. Congratulations on the TriClip approval. But there's been some questions around the patient opportunity breakdown between TEER, TriClip, and replacement with Evoque. Maybe just any internal team thoughts on that patient opportunity breakdown. Then anything you could share on the pricing strategy for TriClip in the setting of competitor pricing. It's a replacement device at a significant premium. Thanks for taking the questions.

Speaker Change: Understood. Thanks, and then just wanted to ask on the Transcatheter tricuspid market congratulations on the triad clip approval, but.

Speaker Change: There's been some questions around the patient opportunity breakdown between tier tried clip and replacement with the book.

Speaker Change: Maybe just any any internal team thoughts on that patient opportunity breakdown and then anything you could share on the pricing strategy for triad clip understanding of competitor pricing its replacement device at a significant premium thanks for taking the questions.

Robert Ford: Well, I'm not going to comment on our pricing strategy here just for competitive reasons. It is a differentiated and novel technology. So there is an opportunity. But we'll have to see how this all plays out. You've got 510(k) submissions and all this stuff going on right now. What we're focused on here is launching a product and getting cases ramped up. And that's what's happening. I got some feedback yesterday from the team after a couple of weeks. Real nice cadence of growth. We're obviously focusing our initial cases on most of the accounts that were part of our pivotal trial. But just real nice cadence growth there and great feedback from physicians and patients post-surgery. I mean, if you're trying to poke at what's the breakdown going to be about replace and repairless, I think it's good to have options.

Speaker Change: Well im not going to comment on our pricing strategy or just for competitive reasons.

Speaker Change: We are it is differentiated and novel technology. So there.

There is an opportunity but.

Speaker Change: We'll have to see how how this all plays out you got and tap submissions and all this stuff going on right now we're focused on here is launching the product.

Speaker Change: And getting cases ramped up.

And that's what's happening. I got some feedback yesterday from the team after a couple of weeks. Real nice cadence of growth. We're obviously focusing our initial cases on most of the accounts that were part of our pivotal trial. But just real nice cadence growth there and great feedback from physicians and patients post-surgery. I mean, if you're trying to poke at what's the breakdown going to be about replace and repairless, I think it's good to have options.

Speaker Change: And Thats whats happening.

I got some feedback yesterday from the team after a couple of weeks.

Speaker Change: Real nice cadence of growth, we're obviously focusing our initial cases on <unk>.

Speaker Change: Most of the accounts that were part of our pivotal trial.

Speaker Change: But just real nice cadence growth, there and great feedback from physicians and patients post post surgery.

Speaker Change: To poke at.

Speaker Change: What's the breakdown going to be about replace end and repair listen I think it's good to have options.

Robert Ford: I guess my view here is that I believe that probably safety is a key driver here to start off with. I think TriClip has shown a very strong, excellent safety record, both in clinical trials and real-world use. So I think that's going to play a key role here in determining repair versus replace. I expect repair or TriClip at least to be the preferred option unless the valves are too damaged. Then obviously, replacement is the only remaining option. But there's a large pool of patients here. You've got 5 million people globally, 2 million people here in the US. It's going to be an opportunity here that we'll be generating more data, expand the indication of the product.

I guess my view here is that I believe that probably safety is a key driver here to start off with. I think TriClip has shown a very strong, excellent safety record, both in clinical trials and real-world use. So I think that's going to play a key role here in determining repair versus replace. I expect repair or TriClip at least to be the preferred option unless the valves are too damaged.

And I guess my view here is.

Speaker Change: Is that.

Speaker Change: I believe that probably safety is a key driver here.

Speaker Change: To start off with and I think try clip has shown a very strong excellent safety record.

Speaker Change: Both in clinical trials and real world use so I think that's going to play a key role here in determining repair versus replace so I expect I expect repair or try clip at least to be the preferred option unless the valves are two damaged and then obviously replacement is the only remaining option. So.

Then obviously, replacement is the only remaining option. But there's a large pool of patients here. You've got 5 million people globally, 2 million people here in the US. It's going to be an opportunity here that we'll be generating more data, expand the indication of the product. So I think this is easily a billion-dollar opportunity for us here as we build the capabilities and as we build more clinical data.

Speaker Change: But there is there's a large pool of patients here.

You got 5 million people globally 2 million people in the U S.

Speaker Change: And.

Speaker Change: It's going to be an opportunity here that we will be generating more data expand the indication of the product.

Robert Ford: So I think this is easily a billion-dollar opportunity for us here as we build the capabilities and as we build more clinical data.

Speaker Change: So I think this is this is easily a 1 billion dollar opportunity for us here as we build.

Speaker Change: As we build the capabilities and as we build up more clinical data.

Joshua Thomas Jennings: Excellent. Thank you.

Josh Jennings: Excellent. Thank you.

Speaker Change: Excellent. Thank you.

Operator: Thank you. Our next question will come from Travis Steed from BofA Securities. Your line is open.

Speaker Change: Thank you.

Speaker Change: Our next question will come from Travis Steed from Bofa Securities. Your line is open.

Travis Lee Steed: Hey, congrats on the good quarter. Maybe just while we're on the pipeline, talk a little bit about Aveir. It sounds like that product's going really well. And then I had a question on gross margins as well. Trying to think about, is this the right pace to kind of get back to pre-COVID levels? And is that still the opportunity longer term for gross margins?

Travis Steed: Hey, congrats on the good quarter. Maybe just while we're on the pipeline, talk a little bit about Aveir. It sounds like that product's going really well. And then I had a question on gross margins as well. Trying to think about, is this the right pace to kind of get back to pre-COVID levels? And is that still the opportunity longer term for gross margins?

Travis Lee Steed: Hey, congrats on the good quarter.

Travis Lee Steed: Maybe just while we're on the pipeline talk a little bit about alere. It sounds like that that product is going really well and then I had a question on gross margins as well trying to think about is this the right pace.

Travis Lee Steed: Get back to pre Covid levels.

Travis Lee Steed: Is that still the opportunity longer term for gross margins.

Robert Ford: Yeah. I mean, I think Aveir has done very well. I mean, we all know the advantages it has over the competitive system, whether it's single and dual chamber, the longer-lasting battery, the ability for replacement, retrievability, and upgradability. So I think it's done very well. From a single chamber perspective, I think we're now at about 50 share of the US market. So that's been doing very well. We started doing our dual chamber procedures towards the end of last year and seeing a nice kind of ramp-up over this first quarter here. Focus here really is really about it's a completely different procedure, right? I mean, if you think about how these devices have been implanted, this is probably the first time in like 30 years that you have a real meaningful change on how this is done.

Speaker Change: Yes, I mean, I think it bears.

Speaker Change: Very well.

Speaker Change: I mean, we know we all know the advantages it has over the competitive system, whether its single and dual chamber the longer lasting battery the ability for replacement retrieve ability upgrade ability. So I think it's done very well.

Speaker Change: From a single Chamber perspective, I think we're now at about 50 share of the U S market.

So that's been doing very well. We started doing our dual chamber procedures towards the end of last year and seeing a nice kind of ramp-up over this first quarter here. Focus here really is really about it's a completely different procedure, right? I mean, if you think about how these devices have been implanted, this is probably the first time in like 30 years that you have a real meaningful change on how this is done.

Speaker Change: So that's been doing very well it's performed we started doing our dual chamber procedures towards the end of last year.

Speaker Change: <unk> seen a nice kind of ramp up over over this first quarter here.

Speaker Change: Our focus here really is really about it's a completely different procedure right. I mean, if you think about how these these devices have been implant that this is probably the first time in like 30 years, you have a real meaningful change on how this is done so our focus here is really getting great clinical results.

Robert Ford: So our focus here is really getting great clinical results, a real thoughtful approach here about opening new centers and training. And that's been working very well for us. And you could see the impact on our growth rate. I mean, historically, our CRM business has been relatively flat with some platforms going up, some platforms going down. So our goal here with this program was to get our CRM portfolio to at least be a contributor to growth, mid-single digits, 6, 7%. So these last couple of quarters, we've done 7.5%. And so Aveir has been doing well. And it's going to continue to get better as more and more physicians get trained and we increase the amount of accounts. So I really like the cadence of how we're forecasting this business and the impact that it's going to have on our CRM portfolio.

So our focus here is really getting great clinical results, a real thoughtful approach here about opening new centers and training. And that's been working very well for us. And you could see the impact on our growth rate. I mean, historically, our CRM business has been relatively flat with some platforms going up, some platforms going down. So our goal here with this program was to get our CRM portfolio to at least be a contributor to growth, mid-single digits, 6, 7%. So these last couple of quarters, we've done 7.5%.

Speaker Change: Thoughtful approach here about opening new centers and training.

Speaker Change: That's been working very well for us and you can see the impact on our growth rate.

Speaker Change: Historically, our CRM business has been relatively flat.

Speaker Change: With some platforms going up some platform has gone down so our goal here with this program was to get our CRM portfolio.

Speaker Change: <unk> B.

Speaker Change: A contributor to growth mid single digits six 7%. So these last couple of quarters, we've done seven 5% and so <unk> been doing well and it's going to continue to get better as more and more physicians get trained and we and we increase the amount of accounts, so I really like the cadence of.

And so Aveir has been doing well. And it's going to continue to get better as more and more physicians get trained and we increase the amount of accounts. So I really like the cadence of how we're forecasting this business and the impact that it's going to have on our CRM portfolio. What was your other question?

Speaker Change: <unk> of.

Speaker Change: Of how we're forecasting this business and the impact that it's going to have in our CRM portfolio.

Robert Ford: What was your other question?

Speaker Change: What was your other question.

Travis Lee Steed: Just on gross margins, kind of thinking about the path back to pre-COVID levels over the long term. Is this the right kind of cadence that you're this year's cadence, the right way to think about that?

Travis Steed: Just on gross margins, kind of thinking about the path back to pre-COVID levels over the long term. Is this the right kind of cadence that you're this year's cadence, the right way to think about that?

Speaker Change: Just on gross margins kind of thinking about the path.

Speaker Change: <unk> levels.

Speaker Change: Over the long term.

If the right kind of cadence that you had.

Speaker Change: This year's cadence is the right way to think about that.

Robert Ford: Yeah. I mean, I think that's a good cadence. I think we're forecasting here about 70 basis points of improvement this year. Feel good about that. I've talked about this not being a question of if, just a question of when. So I think that's not a bad cadence. We're going to focus on the things that we can control. The things that we can control are obviously our cost, our cost teams, and the teams that are working on improving gross margin. They're delivering great results here while at the same time maintaining high service levels, not running into back orders, etc. But probably the biggest opportunity we have here, Travis, is just to expand the gross margin through portfolio mix, right?

Speaker Change: Yes, I mean, I think thats.

Speaker Change: That's a good cadence I think we're forecasting here about 70 basis points of improvement this year I feel good about that.

Speaker Change: I've talked about this not being a question of if just a question of when so I think thats not a bad cadence.

Speaker Change: We're going to focus on the things that we can control and the things that we can control are our obviously.

Speaker Change: Our cost and our cost.

Speaker Change: Cost teams and teams that are working on improving gross margin. They are delivering great results here, while at the same time, maintaining high service levels.

They're delivering great results here while at the same time maintaining high service levels, not running into back orders, etc. But probably the biggest opportunity we have here, Travis, is just to expand the gross margin through portfolio mix, right?So when you have our medical device businesses growing at mid-teens consistently over the last, whatever, four or five quarters, that has a real strong impact on our gross margin. So a lot of focus on what we can control, our gross margin, the cadence. That's what we're targeting. So it's not really a question of if. It's just a question of when.

Speaker Change: Not run into backward as et cetera, but probably the biggest the biggest opportunity we have here.

Travis Lee Steed: Travis just to expand.

Travis Lee Steed: The gross margin through.

<unk> portfolio mix right. So when you have.

Robert Ford: So when you have our medical device businesses growing at mid-teens consistently over the last, whatever, four or five quarters, that has a real strong impact on our gross margin. So a lot of focus on what we can control, our gross margin, the cadence. That's what we're targeting. So it's not really a question of if. It's just a question of when.

Travis Lee Steed: Our medical device businesses growing at mid teens consistently over the last whatever four or five quarters that is a real strong impact on Oi.

Travis Lee Steed: On our gross margins so a lot of focus on what we control our gross margin the cadence.

Travis Lee Steed: That's what we're targeting so.

Travis Lee Steed: So it's not really a question of if it's just a question of when.

Travis Lee Steed: Great. Thanks a lot. And congrats again.

Travis Steed: Great. Thanks a lot. And congrats again.

Speaker Change: Great. Thanks, a lot and congrats again.

Operator: Thank you. Our next question will come from Vijay Kumar from Evercore ISI. Your line is open.

Speaker Change: Thank you.

Speaker Change: Our next question will come from Vijay Kumar from Evercore ISI. Your line is open.

Michael Comilla: Hey, guys. Thanks for taking my question, Robert. I had a two-part question. A lot of questions on pipeline, but I'm curious. When people ask us on sustainability of growth, if you could elaborate on pipeline, what else is there when you look at the future that gives us the confidence of sustaining its premium growth within the med tech industry? And my second part was on the financial modeling side. Looks like FX headwinds came in a little bit higher. Prior guidance had assumed $0.20 headwind to EPS from FX. Did that increase? I'm just curious because some questions on why the high end of the guidance was not raised. I suspect FX headwinds increased. Thank you.

Vijay Kumar: Hey, guys. Thanks for taking my question, Robert. I had a two-part question. A lot of questions on pipeline, but I'm curious. When people ask us on sustainability of growth, if you could elaborate on pipeline, what else is there when you look at the future that gives us the confidence of sustaining its premium growth within the med tech industry?

Vijay Muniyappa Kumar: Hey, guys. Thanks for taking my question Robert Cooper question.

Lot of questions on pipeline, but I'm curious.

Vijay Muniyappa Kumar: When people ask us on sustainability.

Vijay Muniyappa Kumar: If you could elaborate on pipeline what else is there when you look at the future that gives us the confidence of sustaining as premium.

Vijay Muniyappa Kumar: Premium growth within the Med tech industry.

And my second part was on the financial modeling side. Looks like FX headwinds came in a little bit higher. Prior guidance had assumed $0.20 headwind to EPS from FX. Did that increase? I'm just curious because some questions on why the high end of the guidance was not raised. I suspect FX headwinds increased. Thank you.

And my second part was on the financial modeling side, it looks like FX headwinds came in a little bit higher.

Vijay Muniyappa Kumar: Prior guidance of <unk> 20 headwind to EPS from FX did that increase.

Vijay Muniyappa Kumar: So I'm just curious on some question as to why the high end of our guidance does not face I suspect FX headwinds increase thank you.

Robert Ford: Yeah. As I said, there are certain challenges that still remain with us from January. FX is one of them. I'll let Phil answer that one. On your question on pipeline, listen, I could spend a whole hour on this just going through the pipeline. But I guess I would bucket them into three categories. Vijay, I'd say you got your current contributors. FreeStyle Libre and Alinity, they still operate like pipeline projects and products, right? We still got multiple innovations going through them. MitraClip, great familiarity Aveir, Navitor, TriClip, Amulet, Protality or CardioMEMS, I think has got great opportunity in CardioMEMS. I mean, these are all products that I would still characterize them as early innings. Yeah, they're established, but they're still early innings and they got a lot of growth rate there. The second group of products I would call probably near-term future contributors.

Speaker Change: Yes, as I said.

Speaker Change: There are certain challenges that still remain with us from January.

Speaker Change: And FX is one of them I'll, let Phil answer that one on your question on pipeline doesn't I could spend a whole hour on this just going through the pipeline, but I guess I would bucket them into like three categories.

Phil: VJ I'd say you got your current contributors libre and literally they still operate like pipeline projects.

Phil: Products right, we still got multiple innovations going through them Mitraclip, great familiarity aver Nabbed tour try clip.

Phil: Amulet.

Phil: <unk>, our concussion test I think <unk> got great opportunity in cardio Mems I mean, these are all products that.

I mean, these are all products that I would still characterize them as early innings. Yeah, they're established, but they're still early innings and they got a lot of growth rate there. The second group of products I would call probably near-term future contributors. So think about it in the next 12 to 18 months, these products coming to market and starting to kind of generate revenue there. Our Lingo product, I'm very excited about that and bringing that to the US and expanding that globally.

Phil: Would still characterize them as early innings, yet their established but there is still early innings and they've got a lot of growth right there.

The second group of products I would call probably near term future contributors so think about it in the next.

Robert Ford: So think about it in the next 12 to 18 months, these products coming to market and starting to kind of generate revenue there. Our Lingo product, I'm very excited about that and bringing that to the US and expanding that globally. Our dual analyte sensor, our Volt system, Esprit, which is our drug-eluting bioresorbable stent for below the knee. It'll be the first of its kind. We're developing a whole new Alinity system that will target a segment of the market that we currently don't participate in. And there'll be more to come on that. And then just the great opportunity we have with biosimilars into the emerging markets and doing it in a very capital-efficient way and bringing that and leveraging our position there. That's our next 12 to 18-month kind of catalyst there.

Phil: 12 to 18 months these products coming to market and starting to kind of generate revenue there.

Phil: Our lingo product.

Phil: We're excited about that and bringing that to the U S and expanding that globally.

Our dual analyte sensor, our Volt system, Esprit, which is our drug-eluting bioresorbable stent for below the knee. It'll be the first of its kind. We're developing a whole new Alinity system that will target a segment of the market that we currently don't participate in. And there'll be more to come on that. And then just the great opportunity we have with biosimilars into the emerging markets and doing it in a very capital-efficient way and bringing that and leveraging our position there. That's our next 12 to 18-month kind of catalyst there.

Phil: Our.

Phil: Tool analyte sensor.

Phil: Our volt system.

Phil: Esprit, which is R.

Phil: Drug Eluting bio absorbable stent for below the knee it'll be the first of its kind.

Phil: We're developing a whole new amenity system.

Phil: That will target a segment of the market that we currently don't participate in and there'll be more to come on that and then just a great opportunity we have with biosimilars into the emerging markets and doing in a very capital efficient way.

Phil: Bringing that and leveraging our position there that's our.

Phil: Next 12 to 18 month kind of catalyst there and then thinking about beyond 2026, I mean, we're working on a PFA RF catheter you got lead less.

Robert Ford: And then thinking about beyond 2026, I mean, we're working on a PFA RF catheter. You got leadless, another kind of leadless pacing system that we'll be launching. We have a second-generation Amulet. Excited about entering to the IVL market sometime in 2027. Coronary DCB. We're working on kind of new TAVR systems also that allow us to branch out into other segments. We've got a whole plethora of new analytes in our biowearables market that will start to come out and have different applications in 2026. And then on top of that, all the clinical work that we're doing to expand indications, expand market, whether it's in TAVR, whether it's in LAA, whether it's in Mitral. So we've got, I'd say, a real nice cadence here of products and pipeline beyond, I'd say, the next 12, 18 months. We're looking at this 2026, 2027, 2028.

And then thinking about beyond 2026, I mean, we're working on a PFA RF catheter. You got leadless, another kind of leadless pacing system that we'll be launching. We have a second-generation Amulet. Excited about entering to the IVL market sometime in 2027. Coronary DCB. We're working on kind of new TAVR systems also that allow us to branch out into other segments. We've got a whole plethora of new analytes in our biowearables market that will start to come out and have different applications in 2026.

Phil: Ah another kind of leaves us.

Phil: Pacing system that will be launching we have a second generation amulet <unk>.

Phil: Excited about entering to the IPL market sometime in 2027 coronary DCP.

Excited about entering to the IPL market sometime in 2027 coronary DCP.

Phil: We're working on kind of new tavern systems also that allow us to.

Phil: Branch out into other segments, we've got a whole plethora of new analytes in our buyer wearables.

Phil: That will that will start to come out.

Phil: And have different applications in 2026, and then on top of that all the clinical work that we're doing to expand indications expand market, whether it's in Havre, whether it's in whether it's in mitral.

And then on top of that, all the clinical work that we're doing to expand indications, expand market, whether it's in TAVR, whether it's in LAA, whether it's in Mitral. So we've got, I'd say, a real nice cadence here of products and pipeline beyond, I'd say, the next 12, 18 months. We're looking at this 2026, 2027, 2028. I feel really excited about that. There's obviously more that we need to do and add. But I think the base here looks really good in terms of the pipeline. Then I think your question on FX, Phil, you want to take that?

Phil: I'd say, a real nice cadence here.

Phil: Our products and pipeline.

Phil: Beyond I would say the next 12 to 18 months, we're looking at this two.

Phil: <unk> 2006, 2728, and I feel really excited about that is obviously more than we need to do an add but I think the base here is it looks really good in terms of the pipeline.

Robert Ford: I feel really excited about that. There's obviously more that we need to do and add. But I think the base here looks really good in terms of the pipeline. Then I think your question on FX, Phil, you want to take that?

And then I think your question on FX still you want to take that yes. So I mentioned at the onset here BJ in Q1, we saw about a two 9% headwind on sales growth.

Philip Boudreau: Yeah. So I mentioned at the onset here, Vijay, in Q1, we saw about a 2.9% headwind on sales growth. And we kind of at current rates anticipate something similar here in Q2. From a full-year perspective, at the current rates, it's about a 2.5% headwind on the top line. That said, kind of the earnings guide that we have here is in line with the organic sales performance and drop through to earnings on the increased midpoint on the EPS guide.

Phil Boudreau: Yeah. So I mentioned at the onset here, Vijay, in Q1, we saw about a 2.9% headwind on sales growth. And we kind of at current rates anticipate something similar here in Q2. From a full-year perspective, at the current rates, it's about a 2.5% headwind on the top line. That said, kind of the earnings guide that we have here is in line with the organic sales performance and drop through to earnings on the increased midpoint on the EPS guide.

Speaker Change: And we kind of at current rates anticipate something similar here in Q2 from a full year perspective at the current rates, it's about a two 5% headwind on the top line.

Speaker Change: Said the kind of the earnings guide that we have here is in line with the organic sales performance in drop through to earnings.

Increased mid <unk> on the EPS guidance.

Michael Comilla: Thanks, guys.

Vijay Kumar: Thanks, guys.

Speaker Change: Thanks, guys.

Operator: Thank you. And our next question will come from Joanne Wuensch from Citi. Your line is now open.

Speaker Change: Thank you.

Speaker Change: And our next question will come from Julian <unk> from Citi. Your line is now open.

Joanne Wuensch: Good morning. May I add my compliments and congratulations to the quarter? I have two questions, put them right up front. The first one is on the concussion testing. I'd love to understand the go-to-market strategy for that, how you think about the financial benefit, impact, and all that kind of good stuff. But I think my second question is a little bit more big picture. As you step back in a post-pandemic environment a couple of years into the CEO seat, how do you think about taking Abbott sort of to the next level? I mean, we all sit here and take a look at an incredibly strong balance sheet. How do you put that cash to work? And are these segments, divisions, ones you want to keep, or how do you think about adding to it? Thank you.

Julian: Good morning, and my compliments and congratulations to the quarter I have two questions.

Julian: The first one is on the two question testing.

Julian: I'd love to understand the go to market strategy for that how you think about the financial.

Julian: Impact and all that kind of good stuff.

Julian: I think my second question is a little bit more big picture as you step back and post.

As you step back in a post-pandemic environment a couple of years into the CEO seat, how do you think about taking Abbott sort of to the next level? I mean, we all sit here and take a look at an incredibly strong balance sheet. How do you put that cash to work? And are these segments, divisions, ones you want to keep, or how do you think about adding to it? Thank you.

Post pandemic environment, a couple of years into the CEO seat.

How do you think about taking out of service.

The next level and we all sit here and take a look at.

Julian: How do we have strong balance sheet, how do you put that cash to work and army.

Julian: Division when do you want to keep or how do you think about adding to it. Thank you.

Robert Ford: Sure. On the point of care, concussion test, I guess I'd summarize the opportunity here in twofold. I think there's a market conversion component to this, Joanne. I mentioned there are 5 million visits to diagnose a concussion. The number one method there to use that is on a CT scan. I think there's an opportunity here to transform that and allow one to get a faster response in that kind of emergency room visit, which is where the i-STAT and the point of care team already have a good position with some of our other blood gas and other assays that we provide to that segment. So I think this will just slide right into that team. Then the value proposition here is going to be, okay, what's the cost of the system? And can we bend that cost curve?

Speaker Change: Sure on the point of care concussion test.

Speaker Change: I would summarize the opportunity here in twofold I think there is a I think there's a market conversion component to this joanne.

Speaker Change: I mentioned, there are 5 million ER visits too.

Speaker Change: Yes.

Speaker Change: Diagnose a.

Speaker Change: Caution.

Speaker Change: The number one method there to use that is on a C T scan.

Speaker Change: And I think there is an opportunity here to transform that and allow wanted to get a faster response.

Speaker Change: In that emergency kind of emergency room visit which is where the which is where the ice stat in the point of care team have.

Speaker Change: Already have good a good position with some of our other blood gas.

Speaker Change: Another.

Speaker Change: Another assays that we provide to that segment. So I think this will just slide right into that team and then the value proposition here is going to be okay.

So I think this will just slide right into that team. Then the value proposition here is going to be, okay, what's the cost of the system? And can we bend that cost curve? I think we've shown a little bit how we think about things, Joanne. If you look at Libre, if you look at Binax, if you look at how we think about pricing our products when it comes to market conversion and the opportunities that we have there. We'll be able to do it at a nice return for our shareholders. So I think that's an important part.

Speaker Change: What's the cost of the system and can we can we bend that cost curve I think we've shown a little bit how we think about things Joanna if you look at Libre. If you look at buying actually to look at how we think about pricing our products when it comes to market conversion.

Robert Ford: I think we've shown a little bit how we think about things, Joanne. If you look at Libre, if you look at Binax, if you look at how we think about pricing our products when it comes to market conversion and the opportunities that we have there. We'll be able to do it at a nice return for our shareholders. So I think that's an important part. The market expansion opportunity that we have, I think, is going to still require some work on the product. Right now, the product's approved whole blood, but it's a venous draw. We're going to be working on a capillary draw. If you can then run this assay, taking a sample from a fingerstick, from a finger prick, then you can look at bringing that technology even closer to where the need for a rapid concussion test would be.

Speaker Change: And the opportunities that we have there and we will be able to do it at a.

Speaker Change: At a nice return for our shareholders. So.

Speaker Change: So I think that's an important part.

The market expansion opportunity that we have, I think, is going to still require some work on the product. Right now, the product's approved whole blood, but it's a venous draw. We're going to be working on a capillary draw. If you can then run this assay, taking a sample from a fingerstick, from a finger prick, then you can look at bringing that technology even closer to where the need for a rapid concussion test would be.

Speaker Change: The market expansion opportunity that we have I think is going to still require some work on the product right now the products approved.

Speaker Change: Blood, but its a venous draw if we're going to be working on a capillary draw.

And if you can then run this assay.

Speaker Change: Taken a sample from a finger stick.

Speaker Change: From a finger prick, then you can look at bringing that technology, even closer to where the need for a rapid concussion test would be if you could just look at how many universities exist in this country. How many high schools exist in this country you can do some multiplications, there and say okay. This is a great market.

Robert Ford: You could just look at how many universities exist in this country, how many high schools exist in this country. You can do some multiplications there and say, okay, this is a great market creation, market expansion opportunity. So I think that that's how we're thinking about it commercially, conversion and creation/expansion. There's some more work to be done in terms of the product and the claims and the trials there. So this will be a multi-year kind of program over here where we'll start to see kind of nice growth in that segment. And then your other question was about the portfolio and balance sheet. And do we like the four segments? And the answer to that is, yes, we like all the four segments. We feel that it gives us a real unique view into the healthcare system as a whole, starting with nutrition.

You could just look at how many universities exist in this country, how many high schools exist in this country. You can do some multiplications there and say, okay, this is a great market creation, market expansion opportunity. So I think that that's how we're thinking about it commercially, conversion and creation/expansion. There's some more work to be done in terms of the product and the claims and the trials there.

Speaker Change: <unk> market expansion opportunity.

Speaker Change: So I think that that's that's how we're thinking about it commercially.

Speaker Change: Conversion and creation slash expansion.

There is some more work to be done in terms of the product and the claims in the trials. There. So this is a.

So this will be a multi-year kind of program over here where we'll start to see kind of nice growth in that segment. And then your other question was about the portfolio and balance sheet. And do we like the four segments? And the answer to that is, yes, we like all the four segments. We feel that it gives us a real unique view into the healthcare system as a whole, starting with nutrition.

This will be a multi year kind of program would be here, we'll start to see kind of nice growth in that segment.

Speaker Change: And then your other question was about the portfolio in <unk>.

Speaker Change: And balance sheet and do we like the four segments and.

Speaker Change: And the answer to that is yes, we like all of the four segments.

Speaker Change: We feel that it gives us a real unique view into the health care system as a whole starting with nutrition.

Robert Ford: That's obviously the bedrock of good health. But then things happen and you need to get a diagnosis. And we've got a great diagnostic portfolio that we've been expanding on and building on to make sure that we can capitalize on all the different types of modalities and locations where people can get tested. And then once we know, once a physician knows what the problem is, then they got to run through treatment, right? And we do that either through our medicines business or through our medical device business. So I think all four segments are super well aligned to the global demographics and trends in healthcare. And so we like that. There's always opportunities to add.

That's obviously the bedrock of good health. But then things happen and you need to get a diagnosis. And we've got a great diagnostic portfolio that we've been expanding on and building on to make sure that we can capitalize on all the different types of modalities and locations where people can get tested. And then once we know, once a physician knows what the problem is, then they got to run through treatment, right?

That's obviously the bedrock of good health.

Speaker Change: But then things happen and you need to get a diagnosis and we've got a great diagnostic portfolio that we've been expanding on and building on to make sure that we can capitalize on all of the different <unk>.

Speaker Change: Hypes of modalities in locations, where people can get tested and then once once we know once a physician knows what the problem is then they got to run through treatment right and we do that either through our medicines business ortho <unk> or through our medical device business. So I think all four segments are super will allow.

And we do that either through our medicines business or through our medical device business. So I think all four segments are super well aligned to the global demographics and trends in healthcare. And so we like that. There's always opportunities to add. And we've shown that if there are areas that we feel that we can bring value in a combination, then as you mentioned, yeah, we've got a strong balance sheet and strategic flexibility to do that as long as we feel that we can add value to that asset.

Speaker Change: Mine too.

Speaker Change: The global.

Global demographics and trends in health care.

Speaker Change: And so we like that there is always opportunities to add and we've shown that if there are areas that we feel that we can bring value.

Robert Ford: And we've shown that if there are areas that we feel that we can bring value in a combination, then as you mentioned, yeah, we've got a strong balance sheet and strategic flexibility to do that as long as we feel that we can add value to that asset. We felt like that about CSI. We felt like that about St. Jude. We felt like that about Alere. And those deals, they obviously help kind of reshape the company and accelerate our growth rates. But I think that's predicated on us really believing that we can kind of bring value. And we're not trying to fill some top line gap or some issues. So ROIC for us matters. Profitability matters. So we've got opportunities and we could be a little bit more selective to be able to add. But I like the four segments that we're in.

Speaker Change: In a combination.

Speaker Change: And then as you mentioned, yes, we've got we've got a strong balance sheet and strategic flexibility to do that as long as we feel that we can.

We can add value to that asset we felt like that about CSI, we felt like that about St. Jude we felt like that about alere.

We felt like that about CSI. We felt like that about St. Jude. We felt like that about Alere. And those deals, they obviously help kind of reshape the company and accelerate our growth rates. But I think that's predicated on us really believing that we can kind of bring value. And we're not trying to fill some top line gap or some issues. So ROIC for us matters. Profitability matters. So we've got opportunities and we could be a little bit more selective to be able to add. But I like the four segments that we're in. They've been well to shareholders, especially long-term shareholders.

Speaker Change: And those those those deals.

They obviously help kind of reshape the company and accelerate our growth rates, but I think thats predicated on us really believing that we can kind of bring value and we're not trying to fill.

Speaker Change: Some topline gap or some issues, so ROIC for us matters profitability matters.

Speaker Change: So we've got opportunities and we can be a little bit more selective to be able to add but I like the four segments that we're in.

Robert Ford: They've been well to shareholders, especially long-term shareholders.

Speaker Change: And then.

Speaker Change: They've been well to shareholders, especially our long term shareholders.

Joanne Wuensch: Thank you.

Speaker Change: Thank you.

Operator: Thank you. Our next question will come from Matt Miksic from Barclays. Your line is open.

Speaker Change: Thank you.

Speaker Change: Our next question will come from Matt <unk> from Barclays. Your line is open.

Michael Comilla: Hey, good morning. Thanks for putting me in. Congrats on the really strong quarter, particularly med devices. So I had one follow-up on the—sorry, you're good. Background. One question on structural heart. Robert, you talked a little bit about the portfolio and the combination of the leading peer device and MitraClip being a little bit more mature in the category of structural heart, but being kind of augmented by some of these new products, like most recently, obviously, TriClip. If you could talk a little bit about sort of the momentum in the portfolio, as well as how much of the build-out of this portfolio is still coming organically or under review kind of strategically, I appreciate it.

Matt Miksic: Hey, good morning. Thanks for putting me in. Congrats on the really strong quarter, particularly med devices. So I had one follow-up on the—sorry, you're good. Background. One question on structural heart. Robert, you talked a little bit about the portfolio and the combination of the leading peer device and MitraClip being a little bit more mature in the category of structural heart, but being kind of augmented by some of these new products, like most recently, obviously, TriClip. If you could talk a little bit about sort of the momentum in the portfolio, as well as how much of the build-out of this portfolio is still coming organically or under review kind of strategically, I appreciate it.

Matt: Hey, good morning, Thanks for fitting me in.

Matt: Congrats on the really strong quarter producing devices.

Matt: I had one follow up on.

Matt: The.

Matt: On the.

Matt: Sure.

Matt: At ground.

Matt: One question on structural heart.

Matt: Robert you talked a little bit about the portfolio.

Matt: And.

Combination of.

Matt: The leading.

Matt: Peer device Mitraclip.

Matt: Being a little bit more mature.

Category.

Matt: Structural heart.

Matt: But being kind of augmented by some.

Matt: Some of these new products.

Matt: Most recently, obviously try club.

Matt: And if you could talk a little bit about.

Matt: So the momentum in those in the portfolio as well as how much of the build out of this.

Matt: Still.

Coming organically.

Matt: Under review kind of strategically.

Speaker Change: I appreciate it.

Robert Ford: Sure. I mean, I didn't want my comments on MitraClip to be construed like, "Oh, that one there is slowing down and we're relying on others to drive the growth." I mean, that wasn't the intent. If you look at MitraClip this quarter, it's growing at high single digits. If you look at the last five quarters, that's what it's been doing between high single digits, low double digits. That's good. We always had a view here that this was an attractive area of growth, an attractive area of medical need. We wanted to be a leader here. So yeah, MitraClip, I guess we can call MitraClip the founding father of our structural heart portfolio. But I think the team here has done an incredible job at bringing organic innovation into the portfolio.

Speaker Change: Sure I mean, I would add in one.

Speaker Change: My comments on Mitraclip to be construed like.

Speaker Change: That one there is slowing down and we're relying on others to drive the growth that wasn't the intent. If you look at Mitraclip This quarter, it's high single digits.

Speaker Change: And if you look at the last five quarters Thats, what its been doing between high single digits low double digits and thats good.

We always had a view here that this was an attractive area of growth, an attractive area of medical need. We wanted to be a leader here. So yeah, MitraClip, I guess we can call MitraClip the founding father of our structural heart portfolio. But I think the team here has done an incredible job at bringing organic innovation into the portfolio.

Speaker Change: But we always had a view here that this is an attractive area of growth an attractive area of medical need and we wanted to be we wanted to be a leader here. So yes, mitraclip I guess, we can call mitraclip. The founding father of our structural heart portfolio, but I think the team has done an incredible job at bringing organic.

Speaker Change: Innovation into into the into the portfolio. So if you look at our structural heart I mean, we grew 13% today Mitraclip grew high single digits.

Robert Ford: So if you look at our structural heart, I mean, we grew 13% today. MitraClip grew high single digits, but it accounted for 3% of that growth. The other 10% came from all the rest of the portfolio that's being built. So I think that you'll continue to see that. We'll continue to make investments in this business, continue to make investments in the pipeline. I'd say right now, most of it is organic, whether it's innovating on LAA, innovating on our TAVR side, and all the clinical trial work that we're doing there. If there's an opportunity organically, I just put that in the same bucket that I think I answered kind of Joanne's question here, if it makes sense, and we can add it, we've got the flexibility to do it.

So if you look at our structural heart, I mean, we grew 13% today. MitraClip grew high single digits, but it accounted for 3% of that growth. The other 10% came from all the rest of the portfolio that's being built. So I think that you'll continue to see that. We'll continue to make investments in this business, continue to make investments in the pipeline.

Speaker Change: It accounted for 3% of that of that growth.

Speaker Change: The rest the other 10% came from all the rest of the portfolio.

Speaker Change: That's being built so.

Speaker Change: So I think that youll.

Speaker Change: Youll continue to see that we'll continue to make investments in this business continue to make investments in the pipeline.

I'd say right now, most of it is organic, whether it's innovating on LAA, innovating on our TAVR side, and all the clinical trial work that we're doing there. If there's an opportunity organically, I just put that in the same bucket that I think I answered kind of Joanne's question here, if it makes sense, and we can add it, we've got the flexibility to do it.

Speaker Change: I'd say right now most of it is organic whether it's.

Speaker Change: <unk>.

Speaker Change: Innovating on <unk> Lar.

Speaker Change: Innovating on on our tavern side.

Speaker Change: And.

And all the all the clinical trial work that we're doing there.

Speaker Change: If theres an opportunity.

Speaker Change: Inorganically I just put that in the same bucket.

Speaker Change: That I think I answered kind of Johns question here is if it makes sense and we can add it we've got the flexibility to do it but the whole strategy here was to say listen we're going to build a multibillion dollar structural heart business that can sustainably grow double digits and the way to do that is you can't be you can't be.

Robert Ford: But the whole strategy here was to say, "Listen, we're going to build a multi-billion-dollar structural heart business that can sustainably grow double digits." And the way to do that is you can't be a—you can't be a division of only one product. And I think the teams over the last four or five years have done a really good job at building that. And there's more opportunity. I'd say probably the one that we're looking at and is very exciting for us is mitral replacement. We launched a Tendyne product, which was more a transapical system. Our Cephea system is a transfemoral, transseptal. And feedback that we've seen from early implanters, early first-in-man is that this is a great, great valve. So there's an opportunity there also. So I'd say mostly organic, but got the capacity for inorganic if it makes sense.

But the whole strategy here was to say, "Listen, we're going to build a multi-billion-dollar structural heart business that can sustainably grow double digits." And the way to do that is you can't be a—you can't be a division of only one product. And I think the teams over the last four or five years have done a really good job at building that. And there's more opportunity. I'd say probably the one that we're looking at and is very exciting for us is mitral replacement.

Speaker Change: Sure.

Speaker Change: A division of only one product and I think the teams over the last four or five years have done a really good job of building that and Theres more opportunity I would say probably the one that we're looking at.

Speaker Change: It's very exciting for us is mitral replacement.

We launched a Tendyne product, which was more a transapical system. Our Cephea system is a transfemoral, transseptal. And feedback that we've seen from early implanters, early first-in-man is that this is a great, great valve. So there's an opportunity there also. So I'd say mostly organic, but got the capacity for inorganic if it makes sense.

Speaker Change: We've launched.

Speaker Change: Launch, our <unk> product, which was more trans apical system, our <unk> system.

Speaker Change: Transfer Emerald Trans septal and.

Speaker Change: Feedback that we've seen from early implant or as early first in man is that this is a great great valve.

Speaker Change: So there is an opportunity there also so I would say, mostly organic but we have got capacity for inorganic if it makes sense.

Michael Comilla: Thanks so much. Operator, we'll take one more question, please.

Speaker Change: Thanks, so much.

Speaker Change: Operator, we'll take one more question please.

Operator: Thank you. Our final question will come from Danielle Antalffy from UBS. Your line is open.

Speaker Change: Thank you.

Speaker Change: And our final question will come from Danielle <unk> from UBS. Your line is open.

Danielle Joy Antalffy: Hey, good morning, everyone. Thanks so much for taking the question. And yes, congrats on a strong start to the year. Robert, we spent a lot of time talking about the durability of growth in the med tech business. So I don't want to get too greedy, but just following up on Joanne's question regarding you guys do have a strong balance sheet. Are there any areas, I guess sort of how do you feel about the state of the med tech business today? And do you feel there are growth areas within med tech that maybe Abbott isn't participating in today, that Abbott could or should participate in today? And where are you looking beyond your current markets, if at all? Thanks so much. I'll just leave it to one.

Danielle Antalffy: Hey, good morning, everyone. Thanks so much for taking the question. And yes, congrats on a strong start to the year. Robert, we spent a lot of time talking about the durability of growth in the med tech business. So I don't want to get too greedy, but just following up on Joanne's question regarding you guys do have a strong balance sheet.

Danielle: Hey, good morning, everyone. Thanks, so much for taking the question and yes. Congrats on a strong start to the year, Robert we spend a lot of time talking about the durability of growth in the med Tech business and I don't want to get too greedy, but just following up on <unk> question regarding you guys do have a strong balance sheet are there any areas.

Are there any areas, I guess sort of how do you feel about the state of the med tech business today? And do you feel there are growth areas within med tech that maybe Abbott isn't participating in today, that Abbott could or should participate in today? And where are you looking beyond your current markets, if at all? Thanks so much. I'll just leave it to one.

Robert: I guess sort of how do you feel about the state of the Med Tech business today and do you feel there are growth areas within med Tech that may be Abbott is and participating in today that abbott could or should participate in today.

Robert: Where are you looking beyond.

Speaker Change: Your current markets if at all thanks, so much I'll just leave it to one.

Robert Ford: Sure. Yeah, I get the attempt for triangulation here and the multiple different ways. And I guess I'll sound a little bit boring here in terms of how I talk about this. I've been public that, yeah, we are interested. We look at areas that we can add value to. I'd say probably the ones that have jumped out more at us in terms of us studying and looking are probably more in the medical device side and on the diagnostic side. We did look at a strategy for biosimilars for a medicines business, and that was a pretty capital-efficient way to do it. So yeah, we're looking. We continue to study. But I'm not going to sit here and telegraph exactly, it's this, it's that. I think the key thing here is just we - I mean, look at our med tech business did this quarter.

Speaker Change: Sure.

Speaker Change: I get the attempt for triangulation here in multiple different ways, and I guess I will sign a little bit boring here in terms of how I talk about this.

Speaker Change: I've been public that yes, we are interested we've look we look at areas that we can add value to.

Speaker Change: I'd say, probably the ones that I have.

Jumped up more than us in terms of our study and looking at are probably more in the medical device side and on the diagnostic side.

We did look at a strategy for biosimilars for a medicines business, and that was a pretty capital-efficient way to do it. So yeah, we're looking. We continue to study. But I'm not going to sit here and telegraph exactly, it's this, it's that. I think the key thing here is just we - I mean, look at our med tech business did this quarter. Look what it did previous four quarters. And that allows me to be a little bit more selective. Yeah, over the last couple of months, we've seen some fairly large transactions in the med tech space.

Speaker Change: We did look at.

Speaker Change: Our strategy for Biosimilars.

Speaker Change: For our medicines business and that was a pretty capital efficient way to do it.

Speaker Change: So yes, we're looking.

Speaker Change: We continue to study.

Speaker Change: But I'm not going to I'm, not going to sit here and telegraph exactly.

Speaker Change: This is that I think the key thing here is just we we look at our Med Tech business did this.

Robert Ford: Look what it did previous four quarters. And that allows me to be a little bit more selective. Yeah, over the last couple of months, we've seen some fairly large transactions in the med tech space. Those seem to be attractive growth areas. I talked about us getting access to some early IVL technology with the CSI acquisition. So that's an important area for us to focus on. But I don't feel that with our strong organic growth that we need to go out and not pay attention to other key financial metrics that for us are important, right, in terms of ROICs and others because we've got that strong growth rate in med tech. So you won't get me telegraphing here exactly, Danielle, what specific segments we're looking at. What I can tell you is we have an active team. They study a lot. We look a lot.

Speaker Change: This quarter liquid it did previous four quarters and.

Speaker Change: That allows me to be a little bit more selective.

Speaker Change: Yes.

Speaker Change: Last couple of months, we've seen some some fairly large transactions.

Speaker Change: In the Med Tech space.

Those seem to be attractive growth areas. I talked about us getting access to some early IVL technology with the CSI acquisition. So that's an important area for us to focus on. But I don't feel that with our strong organic growth that we need to go out and not pay attention to other key financial metrics that for us are important, right, in terms of ROICs and others because we've got that strong growth rate in med tech. So you won't get me telegraphing here exactly, Danielle, what specific segments we're looking at. What I can tell you is we have an active team. They study a lot. We look a lot.

Speaker Change: Those seem to be.

Speaker Change: Tractive growth areas.

Speaker Change: I talked about us.

Speaker Change: Getting access to some early IPL technology with the CSI acquisition. So that's an important area for us to focus on but.

Speaker Change: But I don't feel that.

Speaker Change: With our strong organic growth that.

Speaker Change: We need to go out and and and and.

Speaker Change: And not pay attention to other key financial metrics that for us are important right in terms of ROIC.

Speaker Change: I know this because we've got that strong growth rate in med tech so.

Speaker Change: You won't get me Telegraphing here and exactly Danielle.

Speaker Change: What specific segments, we're looking at what I can tell you is we have an active team.

Speaker Change: They study a lot we look a lot we follow a lot and if there is a moment that makes sense for us and those segments continue to be interesting, yes, we've got the balance sheet.

Robert Ford: We follow a lot. And if there's a moment that makes sense for us, and those segments continue to be interesting, we've got the balance sheet and the track record to show that we can drive value out of these acquisitions. So I'll just leave it like that. Yes, we've got flexibility. That doesn't mean that we don't pay attention to other key financial kind of returns as we're looking at it. And I feel that I can do that because we've got such a strong top-line growth and great pipeline and prospects. So with that, I'll leave it like that. And I'll just close by saying, listen, we're very pleased with a very strong start to the year. We delivered another quarter of double-digit organic sales growth on the base business. The investments that we've made during all those years of COVID are generating real strong returns.

We follow a lot. And if there's a moment that makes sense for us, and those segments continue to be interesting, we've got the balance sheet and the track record to show that we can drive value out of these acquisitions. So I'll just leave it like that. Yes, we've got flexibility. That doesn't mean that we don't pay attention to other key financial kind of returns as we're looking at it.

Speaker Change: And the track record.

Speaker Change: To show that we can drive value out of these acquisitions so.

Speaker Change: So I'll just leave it like that yes, we've got flexibility.

Speaker Change: That doesn't mean that we don't pay attention to other other key financial.

Speaker Change: Kind of returns as we're looking at it and I feel that I can do that because.

And I feel that I can do that because we've got such a strong top-line growth and great pipeline and prospects. So with that, I'll leave it like that. And I'll just close by saying, listen, we're very pleased with a very strong start to the year. We delivered another quarter of double-digit organic sales growth on the base business. The investments that we've made during all those years of COVID are generating real strong returns.

Speaker Change: We've got such a strong.

Speaker Change: Topline growth and great pipeline and prospects so.

Speaker Change: And so with that I'll leave it I'll leave them.

Speaker Change: I will leave it like that.

Speaker Change: And I'll, just close by saying listen we're very pleased where there's very strong start to the year, we delivered another quarter of double digit organic sales growth on the base business.

Speaker Change: Investments that we've made during all those years of Covid are generating real strong returns the pipeline continues to be highly productive as I've outlined we've got.

Robert Ford: The pipeline continues to be highly productive, as I've outlined. We've got clear visibility to a pipeline all the way out to 2027, 2028. Obtained several new product approvals that are going to help us accelerate our growth in certain areas. Typically, don't raise guidance in the first quarter, but given the strong performance, the outlook, and the remainder of the year, we felt comfortable doing that. We're very well positioned to continue to sustainably deliver top-tier results. With that, I'll wrap up and thank all of you for joining us today.

The pipeline continues to be highly productive, as I've outlined. We've got clear visibility to a pipeline all the way out to 2027, 2028. Obtained several new product approvals that are going to help us accelerate our growth in certain areas. Typically, don't raise guidance in the first quarter, but given the strong performance, the outlook, and the remainder of the year, we felt comfortable doing that. We're very well positioned to continue to sustainably deliver top-tier results. With that, I'll wrap up and thank all of you for joining us today.

Speaker Change: Clear visibility to a pipeline all the way out to 2728.

Speaker Change: Obtained several new product approvals that are going to help us.

Speaker Change: Accelerate our growth in certain areas typically don't raise guidance in the first quarter, but given the strong performance and the outlook on the remainder of the year, we felt comfortable doing that and we're very well positioned to continue to sustainably deliver top tier results. So with that I'll wrap up and thank all of you for joining us today.

Michael Comilla: Thank you, Operator. Thank you all for your questions. This now concludes Abbott's conference call. A webcast replay of this call will be available after 11:00AM Central Time today on Abbott's investor relations website at abbottinvestor.com. Thank you for joining us today.

Thank you operator, and thank you all for your questions. This now concludes Abbott's conference call. A webcast replay of this call will be available. After 11, a M. Central time today on Abbott's Investor Relations website at Abbott Investor Dot Com. Thank you for joining us today.

Operator: Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day. Good morning, and thank you for standing by. Welcome to Abbott's Q1 2024 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 questions by pressing the star 11 keys on your touch-tone 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 Comilla, Vice President, Investor Relations. Good morning, and thank you for joining us.

Speaker Change: Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.

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Speaker Change: Good morning, and thank you for joining by welcome to Abbott's first quarter 2024 earnings Conference call.

Speaker Change: All participants will be able to listen only until the question and answer portion of this call during.

During the question and answer session, you'll be able to ask your question by pressing the star one one Keith 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 Comilla, Vice President, Investor Relations.

Speaker Change: 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.

Speaker Change: Be recorded or rebroadcast without abbott's expressed written permission.

Speaker Change: I would now like to introduce Mr. Michael Miller, Vice President Investor Relations.

Michael Miller: Good morning, and thank you for joining US with me today are Robert Ford, Chairman and Chief Executive Officer.

Operator: With me today are Robert Ford, Chairman and Chief Executive Officer, Bob Funk, Executive Vice President, Finance, and Phil Boudreau, Senior 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 2024. 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 31 December 2023.

Michael Miller: Bob Funck Executive Vice President Finance, and fill Boudreaux, Senior Vice President Finance and Chief Financial Officer.

Robert B. Ford: Robert and Phil will provide opening remarks following their comments, we'll take your questions.

Robert B. Ford: Before we get started some statements made today may be forward looking for purposes of the private Securities Litigation Reform Act of $19 95 and.

Robert B. Ford: Including the expected financial results for 2024.

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 31 December 2023.

Robert B. Ford: 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.

Robert B. Ford: Economic competitive governmental technological and other factors that may affect abbott's operations are discussed in item one a risk factors to our annual report on Form 10-K for the year ended December 31 2023.

Operator: 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. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with the 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 GAAP financial measure for organic sales growth on a forward-looking basis because the company is unable to predict future changes in foreign exchange rates, which could impact reported sales growth. 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.

Robert B. Ford: 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.

Robert B. Ford: On today's conference call as in the past non-GAAP financial measures will be used to help investors understand abbott's ongoing business performance.

Robert B. Ford: These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at Abbott Dot com.

Note that Abbott has not provided the GAAP financial measure for organic sales growth on a forward looking basis because of the company is unable to predict future changes in foreign exchange rates, which could impact reported sales growth.

Robert B. Ford: Unless otherwise noted our commentary on sales growth refers to organic sales growth, which is defined in the press release issued earlier today.

Robert B. Ford: With that I will now turn the call over to Robert.

Robert Ford: Thanks, Mike. Good morning, everyone, and thank you for joining us. Today, we reported Q1 adjusted earnings per share of $0.98, which was above analysts' consensus estimates. We also raised the midpoint of our guidance ranges for both earnings per share and sales growth. We now forecast full-year adjusted earnings per share of $4.55 to $4.70, and organic sales growth excluded COVID testing-related sales of 8.5% to 10%. Organic sales growth, excluding COVID testing-related sales, was 10.8% in the quarter, which represents the fifth consecutive quarter of double-digit growth.

Robert: Thanks, Mike.

Operator: Good morning, everyone, and thank you for joining us. Today, we reported Q1 adjusted earnings per share of $0.98, which was above analysts' consensus estimates. We also raised the midpoint of our guidance ranges for both earnings per share and sales growth. We now forecast full-year adjusted earnings per share of $4.55 to $4.70, and organic sales growth excluded COVID testing-related sales of 8.5% to 10%. Organic sales growth, excluding COVID testing-related sales, was 10.8% in the quarter, which represents the fifth consecutive quarter of double-digit growth. The strong start to the year was driven by broad-based growth across the portfolio, including growth of 14% in medical devices and established pharmaceuticals. In addition to exceeding expectations of both top and bottom lines this quarter, we accomplished a number of objectives across the pipeline, including obtaining several new product approvals and achieving important clinical trial-related milestones.

Robert: Good morning, everyone and thank you for joining us.

Robert: Today, we reported first quarter adjusted earnings per share of 98.

Robert: Which was above analyst consensus estimates.

Robert: We also raised the midpoint of our guidance ranges for both earnings per share and sales growth.

Robert: We now forecast full year adjusted earnings per share of $4 55 to $4 70.

Robert: And organic sales growth, excluding COVID-19 testing related sales of eight 5% to 10%.

Robert: Organic sales growth, excluding COVID-19 testing related sales was 10, 8% in the quarter.

Robert: Which represents the fifth consecutive quarter of double digit growth.

Robert: The strong start to the year was driven by broad based growth across the portfolio, including growth of 14% and medical devices and established pharmaceuticals.

Robert: In addition to exceeding expectations of both top and bottom lines this quarter.

Robert: We accomplished a number of objectives across the pipeline.

Robert: Including obtaining several new product approvals.

Robert: And achieving important clinical trial related milestones.

Operator: I'll now summarize our first quarter results in more detail before turning the call over to Phil. I'll start with nutrition, where sales increased 8% in the quarter. Strong growth in the quarter was led by double-digit growth in pediatric nutrition, driven by continued market share gains in the US infant formula business and growth across our international portfolio of infant formula, toddler, and adult nutrition brands. In January, we launched a new nutrition shake called Protality, which provides nutritional support for adults pursuing weight loss. As people eat less and lose weight from taking GLP-1 medications, undergoing a weight loss surgery, or following a calorie-restricted diet, a portion of what is lost is lean muscle mass, which plays an important role in overall health.

Robert: I will now summarize our first quarter results in more detail before turning the call over to Phil.

I'll start with nutrition, where sales increased 8% in the quarter. Strong growth in the quarter was led by double-digit growth in pediatric nutrition, driven by continued market share gains in the US infant formula business and growth across our international portfolio of infant formula, toddler, and adult nutrition brands. In January, we launched a new nutrition shake called Protality, which provides nutritional support for adults pursuing weight loss. As people eat less and lose weight from taking GLP-1 medications, undergoing a weight loss surgery, or following a calorie-restricted diet, a portion of what is lost is lean muscle mass, which plays an important role in overall health.

Robert: Yes.

Phil: And I'll start with nutrition.

Phil: Where sales increased 8% in the quarter.

Phil: Strong growth in the quarter was led by double digit growth in pediatric nutrition.

Phil: Driven by continued market share gains in the U S infant formula business and growth across our international portfolio of infant formula toddler and adult nutrition brands.

Phil: In January we launched a new nutrition shake called <unk>, which provides nutritional support for adults pursuing weight loss.

Phil: As people eat less and lose weight from taking GOP, one medications undergoing a weight loss surgery are following a calorie restricted diet.

Phil: A portion of what is lost as lean muscle mass, which plays an important role in overall health.

Operator: The combination of high protein and essential vitamins and minerals that Protality offers can help people preserve muscle while pursuing their personal weight loss goals. Turning to EPD, where sales increased 14% in the quarter. This quarter was a continuation of EPD's impressive trend of strong performance, including double-digit growth in four of the last five quarters. In addition to a strong track record of top-line growth, this business has delivered equally impressive gains on the bottom line, with an operating margin profile last year that reflected more than 350 basis points of improvement compared to 2019. Moving to diagnostics, where sales increased more than 5%, excluding COVID testing sales. Growth in diagnostics continues to be led by the adoption of our market-leading systems and demand for testing that takes place in a variety of settings, including hospitals, laboratories, urgent care centers, physician offices, retail pharmacies, and blood screening facilities.

The combination of high protein and essential vitamins and minerals that Protality offers can help people preserve muscle while pursuing their personal weight loss goals. Turning to EPD, where sales increased 14% in the quarter. This quarter was a continuation of EPD's impressive trend of strong performance, including double-digit growth in four of the last five quarters. In addition to a strong track record of top-line growth, this business has delivered equally impressive gains on the bottom line, with an operating margin profile last year that reflected more than 350 basis points of improvement compared to 2019.

Phil: Combination of high protein and essential vitamins and minerals that propelled the offers can help people preserve muscle while pursuing their personal weight loss goals.

Turning.

Phil: To Apd, where sales increased 14% in the quarter.

Phil: This quarter was a continuation of <unk> impressive trend of strong performance, including double digit growth in four of the last five quarters.

Phil: In addition to a strong track record of top line growth. This business has delivered equally impressive gains on the bottom line.

Phil: With an operating margin profile last year that reflected more than 350 basis points of improvement compared to 2019.

Moving to diagnostics, where sales increased more than 5%, excluding COVID testing sales. Growth in diagnostics continues to be led by the adoption of our market-leading systems and demand for testing that takes place in a variety of settings, including hospitals, laboratories, urgent care centers, physician offices, retail pharmacies, and blood screening facilities.

Phil: Moving to diagnostics.

Phil: Where sales increased more than 5%, excluding COVID-19 testing sales.

Phil: Physician offices retail pharmacies and blood screening facilities.

Operator: Our development efforts in diagnostics focus on developing new systems and creating new tests that play an important role in making healthcare decisions, expand the accessibility of testing, and deliver a result as fast as possible. In April, we received FDA approval for a point-of-care diagnostic test that can help determine if someone suffered a mild traumatic brain injury or concussion in just 15 minutes. The test is run on our portable i-STAT Alinity instrument, which allows concussion testing to move beyond the traditional hospital setting and into urgent care centers, physician offices, and other locations that are closer to the patient. With nearly five million people in the US going to the emergency room to be checked for suspected concussion each year, we believe this test has the potential to transform the standard of care for concussion testing. I'll wrap up with medical devices, where sales grew 14%.

Phil: Our development efforts in diagnostics focus on developing new systems, and creating new tests that played an important role in making healthcare decisions expand the accessibility of testing and deliver a result as fast as possible.

Phil: In April we received FDA approval for our point of care diagnostic test that can help determine if someone's suffered a mild traumatic brain injury or concussion and just 15 minutes.

Phil: The test is run on our portable I stat eliminated instrument.

Phil: Which allows concussion testing to move beyond the traditional hospital setting and into urgent care centers physician offices and other locations that are closer to the patient.

With nearly five million people in the US going to the emergency room to be checked for suspected concussion each year, we believe this test has the potential to transform the standard of care for concussion testing. I'll wrap up with medical devices, where sales grew 14%. In diabetes care, FreeStyle Libre sales were $1.5 billion in the quarter and grew 23%. As I previously mentioned, Libre has several new growth opportunities that will help continue to fuel the strong sales trajectory we have forecasted.

Phil: With nearly 5 million people in the U S going to the emergency room to be checked for suspected concussion. Each year. We believe this test has the potential to transform the standard of care for concussion testing.

Phil: And I'll wrap up with medical devices, where sales grew 14%.

Operator: In diabetes care, FreeStyle Libre sales were $1.5 billion in the quarter and grew 23%. As I previously mentioned, Libre has several new growth opportunities that will help continue to fuel the strong sales trajectory we have forecasted. One of those growth opportunities relates to the continued expansion of reimbursement coverage for Libre for individuals who use basal insulin therapy to manage their diabetes. Last year, we announced that Libre became the first and only continuous glucose monitoring system to be nationally reimbursed in France to include all people who use basal insulin as part of their diabetes management. During this first quarter, Libre obtained reimbursement from a select number of institutional payers in Germany for basal insulin users who also use oral diabetes medication to manage their condition.

In diabetes care freestyle Libre sales were $1 5 billion in the quarter and grew 23%.

Phil: As I previously mentioned that Libre has several new growth opportunities that will help continue to fuel the strong sales trajectory we have forecasted.

One of those growth opportunities relates to the continued expansion of reimbursement coverage for Libre for individuals who use basal insulin therapy to manage their diabetes. Last year, we announced that Libre became the first and only continuous glucose monitoring system to be nationally reimbursed in France to include all people who use basal insulin as part of their diabetes management. During this first quarter, Libre obtained reimbursement from a select number of institutional payers in Germany for basal insulin users who also use oral diabetes medication to manage their condition.

Phil: One of those growth opportunities relates to the continued expansion of reimbursement coverage for libre for individuals who use basal insulin therapy to manage their diabetes.

Operator: These select public and private payers cover a limited number of the approximately one million basal insulin users in Germany, but this is an encouraging sign of the potential for further coverage expansion not only in Germany but across other European markets. In cardiovascular devices, sales grew 10.5% overall in the quarter, led by double-digit growth in electrophysiology, structural heart, and continued acceleration in our cardiac rhythm management and vascular portfolios. In electrophysiology, sales grew 18%, driven by double-digit growth in all major geographic regions and across all major product categories, including double-digit growth in ablation catheters and cardiac mapping-related products. We continue to make great progress toward bringing our innovative PFA catheter Volt to market. In March, we completed enrollment in our CE mark clinical study, putting us on track to file for international approval before the end of the year.

These select public and private payers cover a limited number of the approximately one million basal insulin users in Germany, but this is an encouraging sign of the potential for further coverage expansion not only in Germany but across other European markets. In cardiovascular devices, sales grew 10.5% overall in the quarter, led by double-digit growth in electrophysiology, structural heart, and continued acceleration in our cardiac rhythm management and vascular portfolios.

Phil: These select public and private payers cover a limited number of the approximately 1 million basal insulin users in Germany.

Phil: But this is an encouraging sign of the potential for further coverage expansion not only in Germany, but across other European markets.

Phil: And cardiovascular devices sales grew 10, 5% overall in the quarter.

Phil: Led by double digit growth in electrophysiology structural heart and continued acceleration in our cardiac rhythm management and vascular portfolios.

In electrophysiology, sales grew 18%, driven by double-digit growth in all major geographic regions and across all major product categories, including double-digit growth in ablation catheters and cardiac mapping-related products. We continue to make great progress toward bringing our innovative PFA catheter Volt to market. In March, we completed enrollment in our CE mark clinical study, putting us on track to file for international approval before the end of the year.

Phil: In electrophysiology sales grew 18% driven by double digit growth in all major geographic regions and across all major product categories, including double digit growth in ablation catheters and cardiac mapping related products.

Phil: We continue to make great progress toward bringing our innovative PFA catheter volt to market.

Phil: In March we completed enrollment in our CE Mark clinical study, putting us on track to file for international approval.

Phil: Before the end of the year.

Operator: We also recently began enrolling patients in our US clinical trial called Volt AF, which will generate the data needed to support an FDA approval filing. In structural heart, growth of 13% was led by strong performance in several high-growth areas, including TAVR, LAA, mitral, and tricuspid repair. Structural heart is an area that we have invested in over the past years in order to create a diversified portfolio that can sustainably deliver double-digit growth. In the past, we relied almost exclusively on MitraClip to drive the growth, but today, the portfolio and growth are more balanced and reflect increasing contributions from newer products like Navitor, Amulet, and TriClip. In April, we received FDA approval for TriClip, a first-of-its-kind heart valve repair device designed for the treatment of tricuspid regurgitation or a leaky tricuspid valve.

We also recently began enrolling patients in our US clinical trial called Volt AF, which will generate the data needed to support an FDA approval filing. In structural heart, growth of 13% was led by strong performance in several high-growth areas, including TAVR, LAA, mitral, and tricuspid repair. Structural heart is an area that we have invested in over the past years in order to create a diversified portfolio that can sustainably deliver double-digit growth.

Phil: We also recently began enrolling patients in our U S clinical trial called volt, AF, which will generate the data needed to support an FDA approval filing.

Phil: In structural heart growth of 13% was led by strong performance in several high growth areas, including <unk>, MAA mitral and tricuspid repair.

Phil: Reflect increasing contributions from newer products like <unk> and lit and try clip.

Phil: In April we received FDA approval for <unk> of.

Phil: A first of its kind heart valve repair device designed for the treatment of tricuspid regurgitation or a leaky tricuspid valve.

Operator: Data from the clinical trial supporting this approval demonstrated that patients who received TriClip experienced a significant improvement in the severity of their symptoms and quality of life. We're excited to now offer this life-changing treatment option to people in the United States that suffer from this condition. In rhythm management, growth of 7.5% was led by Aveir, our recently launched leadless pacemaker. Aveir has rapidly captured market share in the single-chamber pacing segment of the market and is now being used for dual-chamber pacing, which is the largest segment of the pacing market. This revolutionary technology is helping to deliver growth rates in our rhythm management business that significantly exceed the overall growth in this market. And lastly, in neuromodulation, sales grew 17%, driven by Eterna, a rechargeable neurostimulation device for pain management.

Data from the clinical trial supporting this approval demonstrated that patients who received <unk> experienced a significant improvement in the severity of their symptoms and quality of life.

Phil: We're excited to now offer this life changing treatment option for people in the United States that suffer from this condition.

Phil: In rhythm management growth of seven 5% was led by a fair our recently launched leaves us pacemaker.

Aveir has rapidly captured market share in the single-chamber pacing segment of the market and is now being used for dual-chamber pacing, which is the largest segment of the pacing market. This revolutionary technology is helping to deliver growth rates in our rhythm management business that significantly exceed the overall growth in this market. And lastly, in neuromodulation, sales grew 17%, driven by Eterna, a rechargeable neurostimulation device for pain management.

Phil: <unk> has rapidly captured market share in the single Chamber pacing segment of the market and is now being useful dual chamber pacing, which is the largest segment of the pacing market.

Phil: This revolutionary technology is helping to deliver growth rates in our rhythm management business, that's significantly exceed the overall growth in this market.

Phil: And lastly in Neuromodulation sales grew 17% driven by Aeterna rechargeable neurostimulation device for pain management.

Operator: In January, we announced the launch of Liberta, the world's smallest rechargeable deep brain stimulation device, which is used to treat movement disorders such as Parkinson's disease. So in summary, we're off to a very good start to the year, exceeding expectations on both top and bottom lines. As a result, we raised the midpoint of our sales and EPS guidance ranges. We continue to make good progress on our gross margin expansion initiatives, and we're seeing strong returns from the investments we're making across our growth platforms. Our pipeline has continued to be highly productive, delivering several recently new product approvals, and we're very well positioned to continue to deliver strong results for the remainder of the year. I'll turn over the call to Phil. Thanks, Robert.

In January, we announced the launch of Liberta, the world's smallest rechargeable deep brain stimulation device, which is used to treat movement disorders such as Parkinson's disease. So in summary, we're off to a very good start to the year, exceeding expectations on both top and bottom lines. As a result, we raised the midpoint of our sales and EPS guidance ranges.

Phil: And in January we announced the launch of lip Berta the world's smallest rechargeable deep brain stimulation device, which is used to treat movement disorders, such as Parkinsons disease.

We continue to make good progress on our gross margin expansion initiatives, and we're seeing strong returns from the investments we're making across our growth platforms. Our pipeline has continued to be highly productive, delivering several recently new product approvals, and we're very well positioned to continue to deliver strong results for the remainder of the year. I'll turn over the call to Phil. Thanks, Robert.

Phil: Across our growth platforms. Our pipeline has continued to be highly productive delivering several recently new product approvals and we're very well positioned to continue to deliver strong results for the remainder of the year and then I'll turn over the call to Phil.

Phil: Thanks Robert.

Operator: As Mike mentioned earlier, please note that all references to sales growth rates, unless otherwise noted, are on an organic basis. Turning to our Q1 results, sales increased 4.7% on an organic basis, which, as expected, includes the impact of year-over-year decline in COVID testing-related sales. Excluding COVID testing sales, underlying base business organic sales growth was 10.8% in the quarter. Foreign exchange had an unfavorable year-over-year impact of 2.9% on Q1 sales. During the quarter, we saw the US dollar strengthen versus several currencies, which resulted in exchange having a more unfavorable impact on sales compared to exchange rates at the time of our earnings call in January. Regarding other aspects of the P&L, the adjusted gross margin ratio was 55.7% of sales, adjusted R&D was 6.7% of sales, and adjusted SG&A was 29.4% of sales in the first quarter. Lastly, our Q1 adjusted tax rate was 15%.

Phil Boudreau: As Mike mentioned earlier, please note that all references to sales growth rates, unless otherwise noted, are on an organic basis. Turning to our Q1 results, sales increased 4.7% on an organic basis, which, as expected, includes the impact of year-over-year decline in COVID testing-related sales. Excluding COVID testing sales, underlying base business organic sales growth was 10.8% in the quarter. Foreign exchange had an unfavorable year-over-year impact of 2.9% on Q1 sales.

Phil: As Mike mentioned earlier. Please note that all references to sales growth rates unless otherwise noted are on an organic basis.

Phil: Turning to our first quarter results sales increased four 7% on an organic basis, which as expected includes the impact of year over year decline in COVID-19 testing related sales.

Phil: Excluding COVID-19 testing sales underlying base business organic sales growth was 10, 8% in the quarter.

Phil: Foreign exchange had an unfavorable year over year impact of two 9% on first quarter sales.

During the quarter, we saw the US dollar strengthen versus several currencies, which resulted in exchange having a more unfavorable impact on sales compared to exchange rates at the time of our earnings call in January. Regarding other aspects of the P&L, the adjusted gross margin ratio was 55.7% of sales, adjusted R&D was 6.7% of sales, and adjusted SG&A was 29.4% of sales in the first quarter. Lastly, our Q1 adjusted tax rate was 15%. Turning to our outlook for the full year, we now forecast full-year adjusted earnings per share.

Phil: Regarding other aspects of the P&L. The adjusted gross margin ratio was 55, 7% of sales.

Phil: Adjusted R&D was six 7% of sales and adjusted SG&A was 29, 4% of sales in the first quarter.

Phil: Lastly, our first quarter adjusted tax rate was 15%.

Operator: Turning to our outlook for the full year, we now forecast full-year adjusted earnings per share.

Phil: Turning to our outlook for the full year, we now forecast full year adjusted earnings.

Q1 2024 Abbott Laboratories Earnings Call

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