Abbott Reviews 2006 Accomplishments At Annual Shareholders’ Meeting
Abbott CEO Highlights Strong 2006 Performance That Included Total Shareholder Return of 27 Percent
At the annual meeting of Abbott shareholders today, Chairman and Chief Executive Officer Miles D. White reviewed strategic actions the company has taken in the past year to broaden its diverse portfolio of innovation-driven businesses.
“2006 was a watershed year,” said Mr. White. “Our goal has been to remake Abbott as a company that is built for higher growth. Our strategy has focused on constructing a portfolio of innovation-driven businesses that either are leaders in their respective markets, or have the potential to achieve leadership. Today, Abbott is that company – one that is uniquely well positioned to compete and succeed in the global health care marketplace.”
Four major initiatives in the past year exemplify Abbott’s strategy:
* The acquisition of Guidant’s vascular and endovascular businesses, which catapulted Abbott’s vascular business to an industry leader;
* The acquisition of Kos Pharmaceuticals, which strengthened Abbott’s position in the $20 billion lipid management market by expanding the company’s cholesterol franchise with medications Niaspan® and Advicor®;
* Continued development of Abbott’s nutrition business outside the United States to increase the company’s investment in rapidly emerging markets; and
* The announced divestiture of Abbott’s core laboratory diagnostics business to General Electric.
“Our company is stronger today than it has been for more than a decade,” said Mr. White. “Overall sales in 2006 increased 13 percent to reach $22.5 billion, an all-time high, and our underlying business registered its sixth consecutive year of double-digit growth.”
Outstanding Stock Performance
Mr. White said Abbott’s stock – which increased 24 percent last year – outperformed both the S&P 500 Index and Dow Jones Industrial Average in 2006. Abbott’s stock performance also led its medical technology peers and finished second highest among pharmaceutical peer companies.
“Combining stock price growth and dividends, we delivered a total return to shareholders of 27 percent in 2006,” said Mr. White. “Additionally, since the beginning of the decade, we have outperformed the S&P Health Care Index and the S&P Pharmaceutical Index in total return.”
Broad and Balanced Businesses
Mr. White also reviewed Abbott’s diverse medical, pharmaceutical and nutritional products businesses, highlighting key growth drivers such as its growing vascular business and flagship product, HUMIRA® (adalimumab).
Abbott launched its XIENCE™ V drug-eluting stent system in Europe and Asia, a product that resulted from Abbott’s acquisition of Guidant’s vascular business, and built leadership positions across three distinct businesses – coronary, endovascular and vessel closure.
Additionally, in 2006 HUMIRA became Abbott’s first $2 billion product. Already approved to treat rheumatoid arthritis and psoriatic arthritis, it was approved in 2006 to treat ankylosing spondylitis, or arthritis of the spine, and received approval this year to treat Crohn’s disease.
During the meeting, shareholders rejected proposals calling for a non-binding vote on executive compensation and separation of the roles of chairman and chief executive officer. In addition, the shareholders ratified the selection of Deloitte & Touche LLP as auditors of the corporation for 2007.
Abbott’s 11 incumbent directors were elected to the board of directors during the annual meeting. They are listed below:
* Roxanne S. Austin, former president and chief operating officer, DIRECTV, Inc.;
* William M. Daley, chairman of the Midwest, JPMorgan Chase & Co.;
* W. James Farrell, former chairman and chief executive officer, Illinois Tool Works, Inc.;
* H. Laurance Fuller, retired co-chairman of the board, BP Amoco, p.l.c.;
* Richard A. Gonzalez, president and chief operating officer, Abbott;
* The Rt. Hon. Lord Owen CH, chairman of Europe Steel, p.l.c.;
* Boone Powell, Jr., retired chairman, Baylor Health Care System;
* W. Ann Reynolds, Ph.D., former president, The University of Alabama at Birmingham;
* Roy S. Roberts, managing director, Reliant Equity Investors;
* William D. Smithburg, retired chairman, president and chief executive officer, The Quaker Oats Company;
* Miles D. White, chairman of the board and chief executive officer, Abbott.
In addition, shareholders elected two new board members:
* Samuel C. Scott, III, chairman, president and chief executive officer, Corn Products International Inc;
* Glenn F. Tilton, chairman, president and chief executive officer, UAL Corporation and United Air Lines, Inc., a wholly owned subsidiary of UAL Corporation.
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