Established Pharmaceuticals Broad and Growing Portfolio of Branded Generics Forward-Looking Statement Some statements in this presentation may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forwardlooking 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 Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2013, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law. Title Page 2 © 2012 Abbott Laboratories Investor Roadshow 2 © 2014 Abbott Laboratories Established Pharmaceuticals Business Overview Bringing high-quality, trusted branded generics that have been successfully treating patients for many years to both the developed and developing world with a focus on the world’s fastest growing economies. Title Page 3 © 2012 Abbott Laboratories Investor Roadshow 3 © 2014 Abbott Laboratories Established Pharmaceuticals Combination of Organic and Acquired Assets Legacy Abbott Pharma Assets Piramal Healthcare Solutions Established Pharmaceuticals • Created vertical organization in 2010 • Broad portfolio of branded generics • Significant emerging market presence • Strong positions in India and Russia • Operate entirely outside the U.S. Solvay Pharmaceuticals Title Page 4 © 2012 Abbott Laboratories Investor Roadshow Smaller, Local Asset Deals 4 © 2014 Abbott Laboratories Established Pharmaceuticals Branded Generics Differentiation Relative Pricing R&D Patented High High Significant investment, complex and higher-risk Branded Generics Modest, brand equity and reputation matters Lower, attractive margins “Development”, rapid and incremental, lower risk Pure Generics None/Low Low Low Title Page 5 © 2012 Abbott Laboratories Investor Roadshow 5 © 2014 Abbott Laboratories Established Pharmaceuticals Global Footprint 70+ 15 Worldwide Offices Manufacturing Plants, Extensive 3rd Party Network Operate Entirely OUS Headquarters Basel, Switzerland 6 130+ Pharmaceutical Development Sites Title Page 6 Countries © 2012 Abbott Laboratories Investor Roadshow 6 © 2014 Abbott Laboratories Established Pharmaceuticals Business Mix Significant Emerging Market presence; becomes larger over time Today 2016 Emerging Developed 75% 60% 40% Title Page 7 25% © 2012 Abbott Laboratories Investor Roadshow 7 © 2014 Abbott Laboratories Established Pharmaceuticals Multi-Channel Approach, Tailored to Local Market Influence of Key Stakeholders* Emerging Markets Developed Markets ++ +++ + ++ ++ ++ +++ + Physician Pharmacy Payor Patient * Directional trend differs market by market Title Page 8 © 2012 Abbott Laboratories Investor Roadshow 8 © 2014 Abbott Laboratories Established Pharmaceuticals Long-Term Strategic Growth Objectives Capture Emerging Market Growth Title Page 9 © 2012 Abbott Laboratories Investor Roadshow Manage Developed Markets 9 © 2014 Abbott Laboratories Optimize Operating Margin Established Pharmaceuticals Emerging Market Trends and Market Dynamics Demographic trends and market dynamics support strong growth opportunities in Emerging Markets • Rising middle-class incomes • Modernization of healthcare systems • Improving access to care • Higher out-of-pocket spend; less dependent on 3rd party payors • Discerning consumers seeking trusted, high-quality brands Title Page 10 © 2012 Abbott Laboratories Investor Roadshow 10 © 2014 Abbott Laboratories Established Pharmaceuticals Emerging Markets Pharmerging countries are expected to nearly double their pharmaceutical spending and drive ~70% of global growth 800 ($ Billion) 600 2012 400 2017 200 0 Developed Pharmerging Source: IMS Institute for Healthcare Informatics, The Global Use of Medicines: Outlook through 2017. Title Page 11 © 2012 Abbott Laboratories Investor Roadshow 11 © 2014 Abbott Laboratories Rest of World Established Pharmaceuticals Emerging Markets Branded Generics/Generics will account for ~73% of the increase in Pharmaceutical spending 800 ($ Billion) 600 2012 400 2017 200 0 Proprietary BGx/Gx Other (e.g., OTC) Source: IMS Institute for Healthcare Informatics, The Global Use of Medicines: Outlook through 2017. Title Page 12 © 2012 Abbott Laboratories Investor Roadshow 12 © 2014 Abbott Laboratories Established Pharmaceuticals Driving Growth in Emerging Markets • Build winning portfolios in core therapeutic areas (TA’s) − Register current brands across geographies − Develop, acquire or in-license as needed to strengthen TA portfolio’s − New indications and data for existing brands − New formulations, packaging, and methods-of-administration • Strengthen commercial capabilities − Pharmacist, pharmacy point-of-sale − Patient and consumer marketing • Build strong Abbott “corporate brand” Title Page 13 © 2012 Abbott Laboratories Investor Roadshow 13 © 2014 Abbott Laboratories Established Pharmaceuticals India Market Characteristics • ~90% branded generics • Significant out-of-pocket pay • Growing prevalence of diabetes and CV disease • Anti-infectives important in rural areas Abbott Business • Largest business (~15% of total sales) • #1 Pharma company with reach across rural and urban India • ~ 10,000 sales personnel • Manufacturing facilities in Goa and Baddi • Development facility in Mumbai Title Page 14 © 2012 Abbott Laboratories Investor Roadshow 14 © 2014 Abbott Laboratories Established Pharmaceuticals Russia Market Characteristics • 4th biggest consumer market by 20201) • Significant out-of-pocket pay • Pharmacists have a great deal of influence Abbott Business • ~40 years of presence in Russia; strong local talent and management • Breadth of portfolio expanded with acquisition of Solvay in 2010 • Top 10 Pharma company • Strong gastroenterology franchise • Strong local partnerships in manufacturing and R&D 1)Source: Title Page 15 Ernst & Young, 2013 © 2012 Abbott Laboratories Investor Roadshow 15 © 2014 Abbott Laboratories Established Pharmaceuticals Long-Term Strategic Growth Objectives Capture Emerging Market Growth Title Page 16 © 2012 Abbott Laboratories Investor Roadshow Manage Developed Markets 16 © 2014 Abbott Laboratories Optimize Operating Margin Established Pharmaceuticals Managing Developed Markets Maintain sustainable and profitable businesses • Carefully selected portfolios • Optimized investment levels and SG&A structure • Enhanced focus on market access, pricing and reimbursement • Maintain profitability and cash flow Title Page 17 © 2012 Abbott Laboratories Investor Roadshow 17 © 2014 Abbott Laboratories Established Pharmaceuticals Long-Term Strategic Growth Objectives Capture Emerging Market Growth Title Page 18 © 2012 Abbott Laboratories Investor Roadshow Manage Developed Markets 18 © 2014 Abbott Laboratories Optimize Operating Margin Established Pharmaceuticals Operating Margin Profile • Strong margin profile; mid 20’s • Implementing operational efficiencies to offset pricing pressures, primarily in developed markets • Continue to optimize global sourcing, manufacturing network, and supply chain Title Page 19 © 2012 Abbott Laboratories Investor Roadshow 19 © 2014 Abbott Laboratories Established Pharmaceuticals Delivering on Our Key Growth Drivers Balanced Portfolio No one brand >10% of total sales Page 20 Innovation #1 in India New formulations 60% of sales today Maintain strong margin profile New indications and data 75% of sales by 2016 Continue to optimize global sourcing, manufacturing network, and supply chain Top 10 in Russia Largest market ~15% of total sales Title Leadership Emerging Markets Quality and Supply Chain © 2012 Abbott Laboratories Investor Roadshow Packaging innovation 20 © 2014 Abbott Laboratories Margin Expansion
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