Abbott Laboratories Adjusts Litigation Reserves

Apr 20, 2001, 01:00 ET from Abbott Laboratories

    ABBOTT PARK, Ill., April 20 /PRNewswire Interactive News Release/ --
 Abbott Laboratories today announced an adjustment in litigation reserves to
 reflect recent developments related to the U.S. Department of Justice
 investigation into the marketing and sales practices of TAP Pharmaceutical
 Products Inc. for Lupron(R).  TAP Pharmaceutical Products Inc. is a 50/50
 joint venture between Abbott and Takeda Chemical Industries, Ltd.
     Discussions between TAP and the Department of Justice are ongoing.  The
 government's inquiry has focused solely on marketing and sales practices, and
 does not involve the safety and efficacy of Lupron.
     This one-time adjustment in the litigation reserves will cause an
 adjustment to previously announced first quarter results, as reflected in the
 attached table.  While it is not feasible to predict the outcome of this
 proceeding with certainty, no material impact on operations, or additional
 one-time charges are expected.
     This adjustment to litigation reserves does not impact previously provided
 diluted earnings-per-share guidance for ongoing results for the second
 quarter, and for the full-year 2001.
     Abbott Laboratories is a global, diversified health care company devoted
 to the discovery, development, manufacture and marketing of pharmaceuticals,
 nutritionals, and medical products, including devices and diagnostics.  The
 company employs approximately 70,000 people and markets its products in more
 than 130 countries.  In 2000, the company's sales and net earnings were
 $13.7 billion and $2.8 billion, respectively, with diluted earnings per share
 of $1.78.
     Abbott's news releases and other information are available on the
 company's Web site at www.abbott.com.
 
    Private Securities Litigation Reform Act of 1995 - A Caution Concerning
                           Forward-Looking Statements
 
     Some statements in this news release may be forward-looking statements for
 purposes of the Private Securities Litigation Reform Act of 1995.  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 Exhibit 99.1 of our 2000 Form 10-K and in our
 periodic reports on Form 10-Q and Form 8-K, and are incorporated by reference.
 Abbott undertakes no obligation to release publicly any revisions to forward-
 looking statements as the result of subsequent events or developments.
 
 
                      Abbott Laboratories and Subsidiaries
                       Consolidated Statement of Earnings
                       Three Months Ended March 31, 2001
 
                                                 First Quarter
 
                          As Previously Reported    Adjustment    As Adjusted
 
     Net Sales               $3,559,880,000            $--      $3,559,880,000
 
     Cost of products sold    1,643,318,000             --       1,643,318,000
     Research & development     318,280,000             --         318,280,000
 
     Acquired In-process
      R&D a)                  1,015,000,000             --       1,015,000,000
 
     Selling, general
      & administrative          747,013,000             --         747,013,000
     Net interest expense        26,721,000             --          26,721,000
     Net foreign exchange loss    9,070,000             --           9,070,000
      (Income) from
      TAP Pharmaceutical
      Products Inc. joint
      venture                  (150,057,000)    c) 344,000,000     193,943,000
     Other (income)/expense,
       net                       (4,781,000)                --      (4,781,000)
 
     Earnings Before Taxes      (44,684,000)      (344,000,000)   (388,684,000)
     Taxes on earnings
      a) and b)                (140,991,000)       (24,080,000)   (165,071,000)
 
     Net Earnings               $96,307,000      $(319,920,000)  $(223,613,000)
 
     Net Earnings Excluding
      Acquired In-Process
      R&D And Other One-Time
      Charges                  $734,877,000                 --    $734,877,000
 
     Diluted Earnings
      Per Common Share:
      Excluding acquired
       In-process R&D and
       other one-time charges         $0.47                 --           $0.47
 
     Acquired in-process R&D
      and other one-time
      charges d)                      (0.41)                --           (0.41)
 
     Total After One-Time
      Charges As Previously
      Reported                         0.06                 --            0.06
 
     One-Time adjustment to
      Income from TAP joint
      venture                            --              (0.20)      e)  (0.20)
 
     Total After Adjustment to
      income from TAP Joint
      Venture                         $0.06             $(0.20)      e) $(0.14)
 
     Average Number of Diluted
      Common Shares
      Outstanding             1,565,416,000                      1,565,416,000
 
 
 
     (a) In 2001, the in-process research and development charge and related
         tax benefit are estimates.  Final valuation results are expected in
         the second-quarter 2001.
 
     (b) The income tax benefit in 2001 is due primarily to the tax benefit of
         the acquired in-process research and development.
 
     (c) Reflects impact on litigation reserves related to the U.S. Department
         of Justice investigation of the marketing and sales practices of TAP
         Pharmaceutical Products Inc. for Lupron.  While it is not feasible to
         predict the outcome of these proceedings with certainty, management is
         of the opinion that their ultimate disposition should not have a
         material adverse effect on Abbott's financial position, ongoing cash
         flow or the results of ongoing operations.  The one-time impact on
         cash flow upon resolution would occur in a future period.
 
     (d) Includes $0.40 for acquired in-process research and development and
         $0.01 for other one-time charges.
 
     (e) Shares used to calculate the adjustment to income from TAP joint
         venture and total after adjustment to income from TAP joint venture
         were basic shares outstanding of 1,547,072,000, in accordance with
         generally accepted accounting principles.
 
 
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SOURCE Abbott Laboratories
    ABBOTT PARK, Ill., April 20 /PRNewswire Interactive News Release/ --
 Abbott Laboratories today announced an adjustment in litigation reserves to
 reflect recent developments related to the U.S. Department of Justice
 investigation into the marketing and sales practices of TAP Pharmaceutical
 Products Inc. for Lupron(R).  TAP Pharmaceutical Products Inc. is a 50/50
 joint venture between Abbott and Takeda Chemical Industries, Ltd.
     Discussions between TAP and the Department of Justice are ongoing.  The
 government's inquiry has focused solely on marketing and sales practices, and
 does not involve the safety and efficacy of Lupron.
     This one-time adjustment in the litigation reserves will cause an
 adjustment to previously announced first quarter results, as reflected in the
 attached table.  While it is not feasible to predict the outcome of this
 proceeding with certainty, no material impact on operations, or additional
 one-time charges are expected.
     This adjustment to litigation reserves does not impact previously provided
 diluted earnings-per-share guidance for ongoing results for the second
 quarter, and for the full-year 2001.
     Abbott Laboratories is a global, diversified health care company devoted
 to the discovery, development, manufacture and marketing of pharmaceuticals,
 nutritionals, and medical products, including devices and diagnostics.  The
 company employs approximately 70,000 people and markets its products in more
 than 130 countries.  In 2000, the company's sales and net earnings were
 $13.7 billion and $2.8 billion, respectively, with diluted earnings per share
 of $1.78.
     Abbott's news releases and other information are available on the
 company's Web site at www.abbott.com.
 
    Private Securities Litigation Reform Act of 1995 - A Caution Concerning
                           Forward-Looking Statements
 
     Some statements in this news release may be forward-looking statements for
 purposes of the Private Securities Litigation Reform Act of 1995.  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 Exhibit 99.1 of our 2000 Form 10-K and in our
 periodic reports on Form 10-Q and Form 8-K, and are incorporated by reference.
 Abbott undertakes no obligation to release publicly any revisions to forward-
 looking statements as the result of subsequent events or developments.
 
 
                      Abbott Laboratories and Subsidiaries
                       Consolidated Statement of Earnings
                       Three Months Ended March 31, 2001
 
                                                 First Quarter
 
                          As Previously Reported    Adjustment    As Adjusted
 
     Net Sales               $3,559,880,000            $--      $3,559,880,000
 
     Cost of products sold    1,643,318,000             --       1,643,318,000
     Research & development     318,280,000             --         318,280,000
 
     Acquired In-process
      R&D a)                  1,015,000,000             --       1,015,000,000
 
     Selling, general
      & administrative          747,013,000             --         747,013,000
     Net interest expense        26,721,000             --          26,721,000
     Net foreign exchange loss    9,070,000             --           9,070,000
      (Income) from
      TAP Pharmaceutical
      Products Inc. joint
      venture                  (150,057,000)    c) 344,000,000     193,943,000
     Other (income)/expense,
       net                       (4,781,000)                --      (4,781,000)
 
     Earnings Before Taxes      (44,684,000)      (344,000,000)   (388,684,000)
     Taxes on earnings
      a) and b)                (140,991,000)       (24,080,000)   (165,071,000)
 
     Net Earnings               $96,307,000      $(319,920,000)  $(223,613,000)
 
     Net Earnings Excluding
      Acquired In-Process
      R&D And Other One-Time
      Charges                  $734,877,000                 --    $734,877,000
 
     Diluted Earnings
      Per Common Share:
      Excluding acquired
       In-process R&D and
       other one-time charges         $0.47                 --           $0.47
 
     Acquired in-process R&D
      and other one-time
      charges d)                      (0.41)                --           (0.41)
 
     Total After One-Time
      Charges As Previously
      Reported                         0.06                 --            0.06
 
     One-Time adjustment to
      Income from TAP joint
      venture                            --              (0.20)      e)  (0.20)
 
     Total After Adjustment to
      income from TAP Joint
      Venture                         $0.06             $(0.20)      e) $(0.14)
 
     Average Number of Diluted
      Common Shares
      Outstanding             1,565,416,000                      1,565,416,000
 
 
 
     (a) In 2001, the in-process research and development charge and related
         tax benefit are estimates.  Final valuation results are expected in
         the second-quarter 2001.
 
     (b) The income tax benefit in 2001 is due primarily to the tax benefit of
         the acquired in-process research and development.
 
     (c) Reflects impact on litigation reserves related to the U.S. Department
         of Justice investigation of the marketing and sales practices of TAP
         Pharmaceutical Products Inc. for Lupron.  While it is not feasible to
         predict the outcome of these proceedings with certainty, management is
         of the opinion that their ultimate disposition should not have a
         material adverse effect on Abbott's financial position, ongoing cash
         flow or the results of ongoing operations.  The one-time impact on
         cash flow upon resolution would occur in a future period.
 
     (d) Includes $0.40 for acquired in-process research and development and
         $0.01 for other one-time charges.
 
     (e) Shares used to calculate the adjustment to income from TAP joint
         venture and total after adjustment to income from TAP joint venture
         were basic shares outstanding of 1,547,072,000, in accordance with
         generally accepted accounting principles.
 
 
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 SOURCE  Abbott Laboratories