Abbott Laboratories (NYSE:ABT) Q2 2023 Earnings Call Transcript

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We got really good feedback on the catheter. So, growth is doing very well. The U.S. is probably a little bit impacted by kind of the capital cycle. If you remember, last year when we launched EnSite X, and it was like a very large bolus of kind of upgrading and capital placements that we are making. We get a lot of good feedback on the system, both from the users and from the administration, especially the fact that it’s an open system. So, that’s done very well. If you look at the consumable part of the U.S. growth, it was up mid-teens. So, that I guess the term used was tear apart the EP growth rate. But again, it’s a great market. We have got a great position and good recovery, and I expect to see this continuing throughout this year.

And sorry, what was your other question?

Joanne Wuensch: The other question had to do with the 75% recovery in nutrition. Is that sort of your best case or is there more to go?

Robert Ford: No, I might kind of made – I kind of made my team and I also kind of said publicly that our target here is to get back to 100% of our market share by the end of the year. A big driver of that is the manufacturing and the manufacturing kind of ramp up and we started the manufacturing – reopened the manufacturing process in July for specialty of last year in August and September for non-specialty. So, that manufacturing has provided us the supply we need to fulfill the demand. We have got a very strong brand in SIMILAC and you are seeing that. So – and as I have said, I think maybe the Josh’s question at the beginning. If you look at the different segments, first of all, if you start with WIC and non-WIC, in the WIC segment, we are back to leadership position or back to our position we had before the recall and that was because we focus a lot on that Q3, Q4 time in that segment.

So, I guess long-winded to say, yes, I mean we are still on target for that to be able to get to the end of the year with our pre-recall market share. So – and like I have said, if you pull – if you break out some of the different formulas because there is a lot of different use sets and different types of formulas. And some of them we have already back to where we were before recall. So, the team is working really hard at this, and I am not changing that target.

Joanne Wuensch: Excellent. Thank you.

Operator: Thank you. Our next question comes from Marie Thibault from BTIG. Your line is open.

Marie Thibault: Hi. Good morning and thanks for taking the questions. I wanted to ask a fairly high-level one here on the diagnostics business now that COVID testing is sort of behind us. Core Lab was really strong this quarter. I just want to kind of get an update on the areas of investment and growth in diagnostics testing today. The Alinity rollout, how that’s progressing and whatever else in terms of tests or trends we should be paying attention to now in diagnostics?

Robert Ford: Sure. I think we had a really, really good recovery here as the health systems are opening up. You are seeing that routine testing come back. And like I have said, it was pretty broad-based U.S., Europe, Asia, Asia without China. I mean it was pretty broad-based, Latin America. So, that’s working well. I have said the Alinity it’s a multiyear kind of cycle. If you look at these contracts they are 7 years to 10 years. So, every year you got 15% that’s coming up for renewal. I have also said we are trying to strike the balance between top line growth and gross margin and gross margin expansion. And I think this is the range that we feel is the right range. We can probably accelerate that more with more placements of instruments and more capital, but you have some friction on your gross margin as you do that.

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