Abbott Laboratories
`2003 Annual Report
`
`a
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`    
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`Ex. 2002-0001
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`

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`Founded in 1888 by Dr. Wallace Calvin Abbott, a Chicago
`physician, Abbott Laboratories is a broad-based health care
`company that discovers, develops, manufactures and markets
`products and services that span the continuum of care —
`from prevention and diagnosis to treatment and cure.
`Abbott’s principal businesses include pharmaceuticals and
`medical products, including devices, diagnostic tests and
`instruments, and nutritionals for children and adults.
`
`Headquartered in north suburban Chicago, Abbott serves
`customers in more than 130 countries, with a staff of
`70,000-plus at more than 135 manufacturing, distribution,
`research and development, and other locations.
`
`2 Letter to Shareholders
`14 Pharmaceutical Products Group
`28 Medical Products Group
`42 Our Commitment to Global Citizenship
`44 Financial Report
`46 Consolidated Financial Statements and Notes
`63 Reports of Independent Public Accountants
`64 Management Report on Financial Statements
`65 Financial Instruments and Risk Management
`66 Financial Review
`74 Summary of Selected Financial Data
`76 Directors and Corporate Officers
`77 Shareholder and Corporate Information
`
`On the cover: Chicago native, Tecela Harris, first experienced symptoms of rheumatoid arthritis at her senior prom, when the pain in
`her joints was unbearable. After 18 years of trying numerous medicines without improvement, Tecela was prescribed Humira. With just
`two injections, she experienced a dramatic improvement and has energy again — working full time, spending time with her husband,
`caring for her newborn son, and taking walks with her father.
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`Ex. 2002-0002
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`

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`    
`
`Sound financial performance.
`Success of our largest-ever global
`product launch. Excellent growth
`in pharmaceuticals. Reshaping
`of our medical products business
`and creation of a new hospital
`products company.
`
`For Abbott, 2003 was a year of
`ongoing progress in helping
`people live longer, healthier lives.
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`Ex. 2002-0003
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`

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`    
`
`To our shareholders:
`
`Our company performed well in
`2003. We delivered strong results
`for the year. We achieved all of our
`major goals. We prepared Abbott for
`higher levels of long-term growth.
`
`In the face of difficult global
`economic conditions, an intensely
`competitive environment and rapid
`market changes that are redefining
`health care, we took steps to
`strengthen our business portfolio.
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`2
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`Ex. 2002-0004
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`

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`    
`
`Miles D. White
`Chairman of the Board and Chief Executive Officer
`
`Our accomplishments include:
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`• A number of targeted acquisitions that support our
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`• The launch of Humira, our breakthrough treatment
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`broad-based health care model and execution of our
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`for rheumatoid arthritis;
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`long-term growth strategy.
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`• The realignment of our Medical Products Group to
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`support improved growth;
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`Our growth strategy is defined by an operational focus
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`• Our decision to create an independent, publicly
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`on innovation and the use of advanced technologies to
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`traded hospital products company;
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`make a clear difference in the lives of patients and a
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`• The determination of substantial conformity with the
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`marketing focus on higher-growth, highly innovative
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`Quality System Regulation in our Lake County, Ill.,
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`products and businesses. In putting this strategy to work,
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`diagnostic manufacturing operations; and
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`we have balanced the resulting investment needs with
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`3
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`Ex. 2002-0005
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`    
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`evolving environmental pressures, your expectations for a
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`ments in virtually every developed country in the world
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`solid return on your investment in Abbott and the need to
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`are rethinking and sometimes reducing the levels at which
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`provide a supportive workplace for our employees, as our
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`they will reimburse health care companies for their prod-
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`results show.
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`Strong financial results
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`ucts. Even in the United States, where signs of economic
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`improvement emerged late in the year, state governments
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`are tightening health care spending. In response, we
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`Driven by double-digit sales growth, with especially
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`are helping key decision makers understand that our
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`strong contributions from our Pharmaceutical Products
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`products represent only a small fraction of total health
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`Group, we met our targets in 2003 for ongoing earnings
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`care costs and that, in fact, they can help reduce these costs.
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`per share. At the same time, we met our commitment
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`to significantly increase investment in our R&D pro-
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`For example, spending on prescription drugs continues to
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`grams, as well as our sales and marketing initiatives.
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`account for only about 10 cents of every health care dollar
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`We increased both at double-digit rates, fueling the
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`spent in the United States, according to the Centers for
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`engine for future growth.
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`Medicare and Medicaid Services. In addition, each dollar
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`spent on new medicines reduces nondrug health care
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`In 2003, sales grew 11.3 percent to reach a record $19.7
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`costs, such as hospital expenditures and physician office
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`billion. Abbott also recorded its 320th consecutive quar-
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`visits, by more than $6, according to a study by a
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`terly dividend paid to shareholders since 1924. The value
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`Columbia University economist. Continued medical inno-
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`of Abbott stock grew 16.5 percent, and the company’s
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`vation is critical to reducing health care costs long term.
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`total market value reached $70 billion, rising by more
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`than $10 billion. Coupled with a steady increase in our
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`This is why we continue to support protection of patents
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`dividend, this price appreciation ensured that Abbott’s
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`and medical liability reform, and more equitable assump-
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`total shareholder return once again exceeded that of the
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`tion of R&D costs among countries outside of the United
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`S&P Health Care Index, the fourth time in the last five
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`States, where price controls often dampen R&D invest-
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`years we have achieved this distinction. For the five years
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`ment incentives. Improvement in each of these areas is
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`ending on Dec. 31, Abbott stock performed in the top
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`critical to continued innovation.
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`quartile of our peer group, reflecting the market’s confi-
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`dence in our long-term growth strategy.
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`Continuing momentum in pharmaceuticals
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`Much of our success in 2003 was driven by the outstanding
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`However, despite these and other significant achieve-
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`performance of our Pharmaceutical Products Group,
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`ments, the health care environment continued to test
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`where our ongoing efforts to transform this business
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`Abbott and our peers throughout the year. Chief among
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`continued to deliver dividends. Humira stands out among
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`these challenges was the global economic slowdown and
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`many examples of our success in this area. Launched in
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`its effect on health care spending. As a result, govern-
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`January and approved for the treatment of rheumatoid
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`4
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`Ex. 2002-0006
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`    
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`arthritis (RA) in 38 countries around the world, its first-
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`structure in 2004 and the acquisition of businesses in
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`year sales of $280 million exceeded our initial expectations.
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`higher-growth markets. This new structure provides for
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`As it gains approval in still more countries and as we
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`independent operation of each of the group’s businesses
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`pursue additional indications for its use, we expect Humira
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`and is designed to drive higher growth by improving
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`peak-year sales to reach more than $1 billion for the
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`focus, productivity and market responsiveness. Building
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`RA indication alone. Sales for additional indications now
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`on our commitment to a broad-based approach to health
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`in development have the potential to reach more than
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`care that is rooted in science, we also made a number of
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`$1 billion in additional annual sales.
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`targeted acquisitions that will help us extend the value of
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`The success of Humira complemented double-digit growth
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`the coronary and endovascular products from Jomed N.V.
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`by virtually all of the major branded pharmaceuticals,
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`expands our line of devices used in the treatment of the
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`including Biaxin, Omnicef, Synthroid, TriCor, Mobic,
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`heart and surrounding arteries, while increasing our
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`Flomax and Kaletra. Improved growth in pharmaceuticals,
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`international presence in this business.
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`advanced medical technology. Among these acquisitions,
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`driven by especially strong Kaletra sales and the launch of
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`Humira, also contributed to our solid international results,
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`In addition, we acquired Integrated Vascular Systems
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`along with improved sales in nutritionals.
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`Inc., bringing us a next-generation vessel closure device
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`that is easier for physicians to use and allows patients to
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`To further strengthen this business and sustain this suc-
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`leave the hospital earlier. Targeting another market seg-
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`cess, we invested $1.1 billion of our more than $1.7 billion
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`ment with significant growth opportunities, we acquired
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`total R&D budget for 2003 in pharmaceutical R&D,
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`Spinal Concepts Inc., which makes and sells plates,
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`representing an increase of more than 10 percent. We are
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`screws and rods that are used in spinal surgery. Toward
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`also creating the Global Pharmaceutical Operations
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`the same end, in our Ross Products Division, we added
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`organization, bringing together manufacturing and sup-
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`ZonePerfect Nutrition Co., a leading marketer of
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`port functions from a number of areas to better support
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`the world-class, integrated global pharmaceuticals business
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`we are building. Affirming the value of this work, we
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`delivered seven drug candidates from discovery to devel-
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`opment this past year and have doubled the number of
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`quality drug candidates generated by our discovery opera-
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`tions compared to just a few years ago.
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`Improving momentum in medical products
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`Progress in accelerating growth in our Medical Products
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`Group was marked by the introduction of a new reporting
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`et sales orld ide
`(dollars in billions)
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`.
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`.
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`.
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`  
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`5
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`Ex. 2002-0007
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`    
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`nutrition bars and other products for active people,
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`will now be able to work exclusively on maximizing
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`positioning the company in the rapidly growing “healthy
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`unique opportunities in their markets. We believe that
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`living” nutritionals segment.
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`this will ultimately generate stronger growth for both
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`companies. The new company, named Hospira, is
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`Recently, we completed the acquisition of i-STAT Corp.,
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`scheduled to begin operating independently in the first
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`which targets the high-growth, point-of-care diagnostics
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`half of 2004. Chris Begley, who has served as senior vice
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`market, as well as announced an agreement to acquire
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`president of our Hospital Products Division, will lead
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`TheraSense Inc., a leader in blood glucose monitoring
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`Hospira as its CEO. We wish Chris and the 14,000
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`devices, complementing our MediSense blood glucose
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`employees from across Abbott who will work for the
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`monitoring business.
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`new company all the best in this exciting new venture.
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`Further supporting our focus on higher-growth products
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`Strengthening the enterprise
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`and businesses, we announced plans to spin off most of
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`While we made many improvements in our two operating
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`our core global hospital products business. This move will
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`groups this past year, we also strengthened the whole of
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`enable us to devote more energy to advanced-technology
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`Abbott. For example, in the process of improving our quali-
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`medical products and new pharmaceuticals. At the same
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`ty systems at our Lake County, Ill., diagnostic facilities, we
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`time, it will position the new company as the only one of
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`completed reviews of all of our operations to ensure the
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`its size focused solely on the hospital customer, with the
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`highest levels of manufacturing compliance and quality. We
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`freedom to invest and expand according to its own
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`also continued to improve ethics and compliance oversight
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`growth strategy.
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`and training across Abbott. In addition, we resolved allega-
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`tions regarding sales and marketing practices in our enteral
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`As a result, you and other Abbott shareholders will have
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`nutritionals business that were part of a larger investigation
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`equity investments in two separate, strong companies that
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`into industrywide practices that date back to the 1980s.
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`ash di idends
`declared per share
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`esearch and de elopment
`(dollars in billions)
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`6
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`Ex. 2002-0008
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`

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`    
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`As part of our ongoing work to shape a more supportive
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`Also announcing his retirement this year was Gary L. Flynn,
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`workplace, we added new mentoring networks for minor-
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`former senior vice president of our Ross Products
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`ity employees, building on our successful diversity and
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`Division. Gary’s 33-year Abbott career was marked by
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`inclusion initiatives.
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`outstanding contributions in each of his many roles with
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`the company. We wish him the very best in the years
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`Looking beyond our own operations, we extended our
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`ahead. At the same time, we welcome Gary E. McCullough,
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`commitment to global citizenship. Among other efforts,
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`who assumes leadership of Ross Products, joining
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`we broke ground in 2003 on a clinic for the treatment
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`Abbott from the Wrigley Co. We also congratulate
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`of HIV/AIDS patients at the largest public hospital in
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`Joseph M. Nemmers, who was named senior vice
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`Tanzania, a country that has been ravaged by the pandemic.
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`president of our Diagnostic Operations, and welcome
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`And while passage of the historic Medicare prescription
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`Richard W. Ashley to the new position of executive
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`drug legislation in the United States promises much need-
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`vice president, Corporate Development.
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`ed relief for seniors and the disabled, we will continue to
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`participate in the industry’s Together Rx product discount
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`Throughout the year, Abbott’s more than 70,000 employ-
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`program until provisions of the law are in full effect.
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`ees around the world responded to the challenges of
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`Together Rx provides qualifying Medicare enrollees with
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`the environment and the marketplace in a manner that
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`discounts on more than 170 branded and generic drugs,
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`would make their predecessors proud. They assimilated
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`including 14 Abbott drugs. Our participation in this
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`the many changes that occured throughout the year, while
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`program has helped participants save $266 million. We
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`maintaining a singular focus on our primary customer,
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`also will continue the Abbott Patient Assistance Program,
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`the patient.
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`which in 2003 had provided approximately $70 million
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`in free medicines to individuals in financial need.
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`Together, we have adapted to today’s new health care envi-
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`Abbott people
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`ronment and will continue to make adjustments as needed
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`to execute our strategy for delivering steady and reliable
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`People are the foundation of Abbott’s strength and
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`growth over the long term. In the process, we continue
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`success, and David A. Jones stands out among those who
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`to evolve into a more focused, broad-based health care
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`have contributed at the highest levels to our company.
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`company. We are stronger than we have ever been in our
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`David, co-founder and chairman of Humana Inc., retired
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`116-year history, and we are better positioned than ever to
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`this past year from our board of directors after more
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`serve our patients, our customers and all of our stakeholders.
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`than 20 years of outstanding service. However, he will be
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`taking on a new position as chairman of the board of
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`Hospira. We thank David for his many years of dedication
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`and counsel and congratulate him on his new role.
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`      .     
`Chairman of the Board and Chief Executive Officer
`February 27, 2004
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`7
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`Ex. 2002-0009
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`

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`    
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`The spin-off of Abbott’s core hospital
`products business creates an industry leader
`with a promising future.
`
`Hospira: A new company with
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`A running start
`In August 2003, Abbott announced its plan
`to spin off its core hospital products busi-
`ness by establishing a new company that
`will be one of the leading manufacturers
`of hospital products worldwide. Named
`Hospira, the new company will focus
`on maximizing its leading positions in
`medication delivery systems and critical
`care products, specialty pharmaceuticals,
`and contract manufacturing services.
`Headquartered in Lake Forest, Ill., Hospira
`will have approximately 14,000 employees
`and an extensive network of manufacturing
`plants and distribution centers worldwide.
`Abbott expects to complete the spin-off of
`Hospira in the first half of 2004. The spin-
`off is subject to final approval by Abbott’s
`board of directors.
`
`A strong foundation
`Hospira will launch with approximately
`$2.4 billion in sales and a nearly 70-year
`legacy of experience in the hospital indus-
`try. It will continue to serve its customers
`with a leading portfolio of hospital prod-
`ucts, broad and unique manufacturing
`capabilities, and new technology solutions
`to improve medication delivery and safety
`management. In 2003, this position was
`reinforced with the implementation of one
`of the most comprehensive bar-coding
`efforts in the industry; the elimination
`of needles from its line of infusion therapy
`products; and the introduction of Abbott
`MedNet drug library software, which
`will set a new standard for medication
`management in hospitals.
`
`Hospira’s solid financial profile, combined
`with its expertise in the hospital setting,
`will provide it with the foundation from
`which to pursue new avenues of growth.
`
`New opportunities for growth
`As an independent entity, Hospira will
`have the strategic, financial and operational
`flexibility to seize new opportunities to
`expand its business. For example, with only
`15 percent of current revenues coming
`from outside the United States, global
`expansion represents a significant growth
`opportunity. Additionally, favorable
`demographics due to the aging baby
`boomer generation will drive demand in
`the hospital market and support a stronger
`presence across Hospira’s core businesses.
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`8
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`Ex. 2002-0010
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`

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`    
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`70 years of experience.
`
`Christopher B. Begley, named CEO, Hospira
`and David A. Jones, named
`Chairman of the Board, Hospira
`
`“
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`Hospira will bring proven
`leadership to the hospital
`products business. As an
`independent company, we will
`focus on our customers, grow
`our business and deliver value
`to our shareholders.”
`
`— Christopher B. Begley,
`President, Hospital Products Division;
`named CEO of Hospira
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`9
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`Ex. 2002-0011
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`

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`Evolving
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`10
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`Ex. 2002-0012
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`

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`    
`
`Abbott looks very different than it did even five years ago.
`Our deliberate, strategic reshaping continued in 2003.
`Changes — including the planned spin-off of much of our
`core global hospital products business, a new organizational
`structure in 2004 in our Medical Products Group, and the
`addition of new businesses — further refined and strength-
`ened our successful broad-based health care model.
`
`These changes create opportunities for our company
`to succeed in a rapidly changing and intensely competitive
`health care environment. In both our global pharmaceuticals
`and medical products businesses, we’re transforming Abbott
`through higher-growth, highly innovative opportunities.
`
`Our goal is to find the right balance between size and agility,
`delivering stable and reliable growth to our shareholders.
`
`With each year, Abbott evolves into a stronger health care
`competitor — focused on delivering the best health care
`solutions to those we serve.
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`11
`
`Ex. 2002-0013
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`

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`    
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`A growing, broad- base
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`Pharmaceutical Products Group
`Outstanding science, strong global brands
`
`Marketed products portfolio:
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`AIDS/Antivirals
`Anesthesia
`Anti-infectives
`Cardiology
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`Gastrointestinal
`Immunology
`Metabolic Disease
`Neuroscience and Pain Management
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`Pediatric and Specialty Pharmaceuticals
`Renal Disease
`Urology and Reproductive Health
`
`Major Abbott Milestones
`
`June 2000
`Launched
`Precision Xtra
`blood glucose
`monitor
`
`Sept. 2000
`Received FDA
`approval for
`Kaletra for the
`treatment of
`HIV/AIDS
`
`March 2001
`Acquired
`BASF’s
`pharmaceutical
`business,
`including
`the global
`operations
`of Knoll
`
`Oct. 2001
`Launched
`TriCor tablets,
`an improved
`formulation of
`TriCor with a
`new indication
`
`Dec. 2001
`Acquired Vysis
`Inc., a leading
`genomic
`disease
`management
`company
`
`May 2002
`Acquired
`Biocompatibles
`International
`plc’s stent
`business
`
`June 2002
`Formed an
`alliance with
`Celera
`Diagnostics to
`develop and
`market molec-
`ular diagnostic
`products
`
`July 2002
`Received
`FDA approval
`for Synthroid,
`trusted for
`more than
`40 years to
`control thyroid
`disease
`
`12
`
`Ex. 2002-0014
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`

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`    
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`- based portfolio
`
`Medical Products Group
`Building higher-growth, highly innovative businesses
`
`Operating businesses:
`
`Abbott Diagnostics
`i-STAT Point-of-Care
`MediSense Blood Glucose Monitoring
`
`Abbott Molecular Diagnostics
`Ross Products
`Spinal Concepts
`
`Abbott Vascular Devices
`Animal Health
`
`Dec. 2002
`Received FDA
`approval to
`market Humira
`for the
`treatment of
`rheumatoid
`arthritis
`
`June 2003
`Acquired
`Spinal
`Concepts Inc.,
`maker of
`spinal fixation
`products
`
`Aug. 2003
`Broadened
`nutritionals
`business
`through the
`acquisition of
`ZonePerfect
`Nutrition Co.
`
`June 2003
`Expanded
`Abbott
`Vascular
`Devices’ global
`presence
`through the
`acquisition
`of Jomed N.V.’s
`coronary and
`endovascular
`product lines
`
`Sept. 2003
`Received
`approval in
`the European
`Union to mar-
`ket Humira for
`the treatment
`of rheumatoid
`arthritis
`
`Aug. 2003
`Announced
`plans to
`spin off core
`global hospital
`products
`business into
`new separate
`public
`company, to
`be named
`Hospira
`
`Dec. 2003
`Announced
`acquisition
`of i-STAT Corp.,
`a leading
`manufacturer
`of point-of-care
`diagnostic
`systems for
`blood analysis;
`completed in
`Jan. 2004
`
`Jan. 2004
`Announced
`plans to acquire
`TheraSense Inc.,
`broadening
`current blood
`glucose moni-
`toring product
`line
`
`13
`
`Ex. 2002-0015
`
`

`
`    
`
`Pharmaceutical Products Group
`Abbott’s global pharmaceuticals
`business delivered another year of
`outstanding performance in 2003,
`while continuing to invest in the
`discovery and development of new
`therapies for chronic diseases.
`
`Global
`Momentum
`
`Jeffrey M. Leiden, M.D., Ph.D.
`President and Chief Operating Officer,
`Pharmaceutical Products Group,
`Chief Scientific Officer
`
`14
`
`Ex. 2002-0016
`
`

`
`Humira:
`Abbott’s largest-ever global
`product launch
`
`Humira reduces the often painful and disabling symptoms of
`rheumatoid arthritis (RA) by slowing down the inflammation
`process and inhibiting joint deterioration. After Humira was
`FDA approved on Dec. 31, 2002, it quickly became an
`important treatment option for the more than 5 million
`patients with RA worldwide:
`• May 2003: Strong market acceptance and
`prescription trends prompted Abbott to raise
`Humira worldwide sales expectations to
`more than $250 million for 2003.
`• September 2003: Abbott received approval for
`Humira in Europe. By year end, Humira was
`approved in 38 countries.
`• December 2003: Humira surpassed 2003
`worldwide sales expectations at $280 million.
`• January 2004: Abbott raises its 2004 worldwide sales forecast
`to more than $700 million, and continues to expect
`peak-year sales of more than $1 billion for the RA
`indication alone.
`
`Humira is administered subcutaneously once every other
`week and is available in a ready-to-use, pre-filled syringe that
`was specially designed for use by people whose hands may be
`affected by RA, making it easier for them to self-administer
`their medication at home.
`
`The Humira “Pipeline”
`A significant clinical trial program is under way examining
`the potential of Humira in many autoimmune diseases.
`These indications have the potential to add more than
`$1 billion in additional annual sales:
`• Psoriasis
`• Psoriatic arthritis
`• Ankylosing spondylitis
`• Juvenile RA
`• Crohn’s disease
`
`    
`
`15
`
`Ex. 2002-0017
`
`

`
`    
`
`With the creation of Hospira, the
`branded hospital pharmaceuticals that
`were part of the hospital products
`business have been integrated into the
`Pharmaceutical Products Group as of
`Jan. 1, 2004. These include the anesthe-
`sia agent, Ultane, and the vitamin D
`therapy, Zemplar.
`
`Kaletra increased its position as
`the world’s number-one protease
`inhibitor for treating HIV/AIDS
`due to its excellent efficacy and
`long-term viral suppression.
`
`16
`
`Ex. 2002-0018
`
`

`
`    
`
`Synthroid is the number-one-
`prescribed treatment for
`hypothyroidism and the second-
`most-prescribed medication in
`the United States. Flomax is the
`market-leading drug for benign
`prostatic hyperplasia (BPH).
`
`17
`
`TriCor is the market-leading
`fenofibrate for reducing choles-
`terol and high triglycerides,
`and Tarka and Mavik are two
`promising medications for
`reducing high blood pressure.
`
`Ex. 2002-0019
`
`

`
`    
`
`Depakote ER, the
`once-a-day version
`of Depakote, is used
`to treat epilepsy and
`prevent migraine
`headaches. Depakote
`also treats bipolar
`disorder.
`
`Biaxin XL and Omnicef are part of
`Abbott’s more than $1 billion world-
`wide anti-infective franchise. Omnicef
`is offered in a strawberry cream flavor
`that children prefer.
`
`18
`
`Omnicef — Three-year-old Sammy Hunt suffered from occasional ear infections. Omnicef,
`a better-tasting, oral suspension antibiotic, effectively treated Sammy’s ear infections and has
`become the fastest-growing branded oral antibiotic in the United States.
`
`Ex. 2002-0020
`
`

`
`Global Pharmaceuticals
`2003 Year in Review
`
`19
`
`Ex. 2002-0021
`
`

`
`20
`
`Ex. 2002-0022
`
`Ex. 2002-0022
`
`

`
`    
`
`Humira — Tabbasum Rauf of Ireland had joints
`
`so swollen from rheumatoid arthritis that she
`
`could hardly get out of bed. Approved in Europe
`
`in September, Humira allowed Tabbasum to regain
`
`her mobility and strength — returning her to a
`
`more normal life.
`
`Evolving into a more globally integrated
`pharmaceuticals business
`Abbott’s Pharmaceutical Products Group is consolidating
`functions worldwide to take advantage of its resources and
`size to achieve greater productivity and efficiency.
`
`The Pharmaceutical Products Group is becoming a globally
`integrated organization, benefiting patients, employees and
`shareholders. We’ve integrated functions that were separate,
`such as pharmaceutical research and development, and are
`continuing to integrate other functions, such as manufacturing
`operations, into a single global structure with common goals
`and priorities. Today, Abbott’s pharmaceuticals business has
`an industry-competitive pipeline and a highly disciplined
`decision-making process that’s focused on five therapeutic
`areas of discovery. Abbott is also a leader in advanced
`technologies with industry-leading drug discovery groups
`in biologics and small molecules.
`
`We’re continuing to recruit and retain top pharmaceutical
`talent at all levels. At the same time, we’re investing in our
`talented marketing and sales organizations to enhance
`Abbott’s commercial execution worldwide.
`
`As a result, our U.S. pharmaceuticals business achieved
`greater than 20 percent sales growth in 2003, driven by more
`than 10 global brands, each with peak-year sales potential of
`greater than $500 million.
`
`Humira: A great start in the United States;
`significant global potential
`Approved by the FDA in December 2002, Humira is Abbott’s
`breakthrough treatment for use in patients with rheumatoid
`arthritis (RA). The first fully human monoclonal antibody
`approved for RA, Humira mimics an antibody that blocks a
`protein called tumor necrosis factor (TNF). TNF contributes
`to the joint inflammation and bone erosion found in RA
`
`patients. By blocking TNF, Humira inhibits the progression
`of structural damage and offers symptom relief so that
`patients can return to living more normal lives.
`
`The 2003 U.S. launch of Humira was well-executed, captur-
`ing approximately 20 percent of new prescriptions by year
`end within the self-injectable segment. Humira received final
`marketing authorization from regulatory authorities in
`the European Union in the third quarter of 2003 and was
`immediately launched in the United Kingdom and Germany.
`In 2004, one of the company’s top priorities is the full
`international roll-out of Humira, which is now approved
`for sale in 38 countries.
`
`RA is an autoimmune disease that afflicts more than
`5 million adults worldwide. At the end of 2003, more than
`50,000 people benefited from Humira around the world.
`In addition, Humira is the most convenient anti-TNF
`therapy with less frequent (every-other-week) dosing and
`the added advantage of at-home self-injection from a
`ready-to-use, pre-filled syringe. Our Medicare Assistance
`Program has provided this life-changing therapy at no
`cost to thousands of Medicare-eligible seniors without
`prescription drug coverage.
`
`Europe is an emerging market for anti-TNFs such as Humira.
`With a lower anti-TNF market penetration than the United
`States and the acceptance of these treatments among physi-
`cians on the rise, the potential exists for rapid market growth.
`In fact, early drug access programs in Europe have enrolled
`more than 10,000 Humira patients as of year-end 2003.
`
`For the full-year 2003, Humira exceeded sales expectations,
`finishing the year with $280 million in worldwide sales, sig-
`nificantly ahead of our initial projection of $200 million.
`We continue to forecast strong worldwide sales growth in
`2004 to more than $700 million. In its peak year, Humira
`
`21
`
`Ex. 2002-0023
`
`

`
`    
`
`Kaletra — Claudia Graciela of Buenos Aires, Argentina,
`
`was diagnosed with HIV more than a decade ago. After
`
`taking numerous medications, and eventually worsening
`
`and relapsing, her doctor prescribed Kaletra. “Since
`
`then my health has consistently improved. I feel good,
`
`and have my life back.”
`
`sales are projected to reach more than $1 billion for the RA
`indication alone, and additional indications currently in
`development have the potential to add more than
`$1 billion in additional annual sales.
`
`A pipeline within a product
`Humira clinical trials progressed through 2003 for early RA,
`juvenile RA, psoriatic arthritis, Crohn’s disease, psoriasis and
`ankylosing spondylitis. In fact, we recently presented positive
`results of our Phase II psoriasis trials at the largest dermatol-
`ogy medical meeting in the United States.
`
`These additional indications for Humira represent a pipeline
`within a product — ideal because follow-on trials for an
`approved drug generally represent much lower risk than new
`molecular entities. The potential is significant; each additional
`indication represents a several-hundred-million-dollar
`market opportunity, while serving important patient needs.
`
`Abbott’s pharma pipeline: A study in dynamic potential
`Besides the additional indications for Humira, there are a
`number of compounds in Abbott’s pharmaceutical pipeline
`with great promise, particularly in oncology.
`
`One of our late-stage drugs, atrasentan, is an oral medication
`developed to treat prostate cancer, which afflicts one in six
`men. The current treatment options are surgery, radiation or
`hormone therapy, all of which have limited efficacy and may
`have considerable side effects. Treatments for this common
`and potentially terminal disease have not advanced signifi-
`cantly in more than six decades.
`
`Atrasentan belongs to a class of drugs designed to block the
`activity of endothelin, a protein produced in the body that
`stimulates growth and spread of cancer cells. Atrasentan’s
`clinical development program includes a Phase III study in
`men with hormone refractory disease, where the cancer has
`
`not yet spread to the bone, as well as Phase II studies in
`earlier stages of the disease and in combination with other
`agents. We also are continuing to explore atrasentan’s
`potential in other cancers, including renal cell carcinoma,
`ovarian, stomach, brain and nonsmall cell lung cancers.
`
`In addition to atrasentan, our oncology pipeline includes a
`number of promising compounds in earlier stages. ABT-510,
`an angiogenesis inhibitor, is in Phase II trials to determine
`its efficacy in cancers of the lung and kidney, as well as
`sarcoma and lymphoma. Angiogenesis inhibitors interfere
`with the formation of blood vessels that feed tumor growth,
`essentially starving the tumor of the nutrients required to
`grow and metastasize.
`
`Our oncology pipeline contains cytostatic agents, such as
`ABT-510 and atrasentan, where the drug targets only the
`cancer cells. It also contains more traditional cytotoxic
`agents, where the drug is less discriminating about the cells it
`attacks. ABT-751 is the leading candidate in the cytotoxic cat-
`egory. It belongs to a class of drugs called antimitotic tubulin
`antagoni