WEBVTT 00:00:00.000 --> 00:00:02.660 So here's a question for you. How does a company 00:00:02.660 --> 00:00:07.099 that got its start simply by putting medicine 00:00:07.099 --> 00:00:10.539 into these tiny consistent pills back in 1880s 00:00:10.539 --> 00:00:14.240 Chicago, how does that company evolve into a, 00:00:14.279 --> 00:00:18.000 well... 40 plus billion dollar global behemoth 00:00:18.000 --> 00:00:20.780 that touches literally everything you can imagine. 00:00:20.960 --> 00:00:22.780 It's an amazing story. I mean, we're talking 00:00:22.780 --> 00:00:25.739 about the entire spectrum here from really basic 00:00:25.739 --> 00:00:28.120 consumer stuff like baby formula and protein 00:00:28.120 --> 00:00:32.020 shakes all the way up to incredibly complex heart 00:00:32.020 --> 00:00:34.939 implants, deep brain stimulation systems. And 00:00:34.939 --> 00:00:37.280 even those little credit card size COVID tests 00:00:37.280 --> 00:00:39.039 that we all had sitting on our kitchen counters 00:00:39.039 --> 00:00:41.079 just a couple of years ago. Exactly. It really 00:00:41.079 --> 00:00:44.039 is just a spectacular exercise in corporate lung. 00:00:44.170 --> 00:00:47.929 longevity, in survival, and this kind of relentless 00:00:47.929 --> 00:00:50.229 strategic diversification. And I think that's 00:00:50.229 --> 00:00:52.570 the key word, diversification. It is. Abbott 00:00:52.570 --> 00:00:54.130 Laboratories is one of those companies that kind 00:00:54.130 --> 00:00:56.189 of flies just under the radar for most people. 00:00:56.250 --> 00:00:57.969 Their name is everywhere. You probably have one 00:00:57.969 --> 00:00:59.630 of their products in your house right now, but 00:00:59.630 --> 00:01:02.570 you rarely grasp the full scope of what they 00:01:02.570 --> 00:01:04.489 actually do. Right. People might know them for 00:01:04.489 --> 00:01:07.670 one thing, like Similac or Ensure, maybe. Precisely. 00:01:07.750 --> 00:01:10.989 They associate them with a single brand and completely 00:01:10.989 --> 00:01:13.469 miss the fact that fundamentally they... are 00:01:13.469 --> 00:01:15.810 a medical technology giant. Well, that complexity 00:01:15.810 --> 00:01:18.069 is exactly what we are going to try and cut through 00:01:18.069 --> 00:01:21.209 today. Our mission in this deep dive is to take 00:01:21.209 --> 00:01:23.629 all this extensive corporate and financial source 00:01:23.629 --> 00:01:28.010 material and distill the core insights. We're 00:01:28.010 --> 00:01:30.209 going to detail the history, the current structure. 00:01:30.859 --> 00:01:33.480 and the really significant impact of Abbott Laboratories. 00:01:33.560 --> 00:01:35.700 And the goal, really, for you, the listener, 00:01:35.879 --> 00:01:38.280 is to walk away with a quick grasp of the sheer 00:01:38.280 --> 00:01:41.439 and often surprising scale of this multinational. 00:01:41.640 --> 00:01:42.760 And when we talk about scale, let's put some 00:01:42.760 --> 00:01:44.859 numbers on it. We have to. Based on the 2024 00:01:44.859 --> 00:01:46.719 financial data we looked at, we were talking 00:01:46.719 --> 00:01:48.659 about a company that brought in a staggering 00:01:48.659 --> 00:01:53.579 $41 .9 billion in revenue. $41 .9 billion. Yeah. 00:01:53.900 --> 00:01:56.040 And just for context, that is roughly the GDP 00:01:56.040 --> 00:01:58.400 of a medium -sized nation. They employ about 00:01:58.400 --> 00:02:01.340 114 ,000 people and operate actively in over 00:02:01.340 --> 00:02:04.680 160 countries. It is a true global powerhouse. 00:02:04.859 --> 00:02:08.379 That is just immense. And it immediately makes 00:02:08.379 --> 00:02:10.520 you wonder. How do you even manage that? How 00:02:10.520 --> 00:02:13.680 do you manage $40 -plus billion across such a 00:02:13.680 --> 00:02:16.460 diverse portfolio? Well, what we found so fascinating 00:02:16.460 --> 00:02:19.139 is how clearly they've organized the modern company. 00:02:19.219 --> 00:02:22.039 It's built on four core pillars, and that gives 00:02:22.039 --> 00:02:24.259 us a fantastic roadmap for understanding their 00:02:24.259 --> 00:02:26.360 whole business model. Okay, so what are these 00:02:26.360 --> 00:02:28.419 four pillars? They define the modern Abbott. 00:02:28.620 --> 00:02:31.699 You have nutrition, diagnostics, medical devices, 00:02:31.860 --> 00:02:34.319 and then established pharmaceuticals. And if 00:02:34.319 --> 00:02:37.259 you look at that 2024 revenue breakdown, it gives 00:02:37.259 --> 00:02:39.340 you a crucial insight into where the company 00:02:39.340 --> 00:02:43.099 is really focusing its capital and its future 00:02:43.099 --> 00:02:45.199 growth. And medical devices is the big one. It 00:02:45.199 --> 00:02:48.419 is the undisputed king. It brings in 45 % of 00:02:48.419 --> 00:02:50.539 the total revenue. So nearly half of all the 00:02:50.539 --> 00:02:52.939 revenue is from essentially hardware for the 00:02:52.939 --> 00:02:56.060 human body. Precisely. Nutrition follows at 22%. 00:02:56.060 --> 00:02:59.000 Diagnostics is right behind that at 20%. And 00:02:59.000 --> 00:03:01.259 then finally, established pharmaceuticals makes 00:03:01.259 --> 00:03:05.000 up the remaining 13%. That 45 % figure for medical 00:03:05.000 --> 00:03:07.360 devices, that feels like the defining statistic 00:03:07.360 --> 00:03:10.120 for modern Abbott. I think it is. Okay, so let's 00:03:10.120 --> 00:03:12.340 unpack this whole journey. Let's start from that 00:03:12.340 --> 00:03:15.340 really simple, original invention back in Chicago. 00:03:15.880 --> 00:03:18.479 Where did this all begin? Well, it begins with 00:03:18.479 --> 00:03:22.580 a dedicated medical practitioner. The genesis 00:03:22.580 --> 00:03:25.580 story of Abbott Laboratories starts with Dr. 00:03:25.819 --> 00:03:28.319 Wallace C. Abbott. Now, he wasn't just a physician. 00:03:28.419 --> 00:03:31.539 He was also a drugstore owner, and he saw a fundamental 00:03:31.539 --> 00:03:33.979 flaw in the way medicine was being delivered 00:03:33.979 --> 00:03:36.900 in the late 19th century. This was back in 1888, 00:03:37.099 --> 00:03:39.699 right? 1888. He founded the Abbott Alkaloidal 00:03:39.699 --> 00:03:41.840 Company right there in Ravenswood, Chicago. So 00:03:41.840 --> 00:03:44.650 wait. His big innovation wasn't some complex 00:03:44.650 --> 00:03:48.360 new machine or a new chemical compound. It was 00:03:48.360 --> 00:03:51.099 just making the dose consistent. That's it. That 00:03:51.099 --> 00:03:53.379 feels like such a fundamental concept today that 00:03:53.379 --> 00:03:56.039 we just take for granted. But back in the 1880s, 00:03:56.039 --> 00:03:58.360 that was revolutionary. It was absolutely revolutionary. 00:03:58.360 --> 00:04:00.139 You have to think about what medicine looked 00:04:00.139 --> 00:04:03.039 like back then. Dr. Abbott saw that the liquid 00:04:03.039 --> 00:04:05.460 preparations of the era, you know, the tinctures 00:04:05.460 --> 00:04:09.240 and tonics, they were highly inconsistent. And 00:04:09.240 --> 00:04:11.900 they deteriorated really rapidly over time. So 00:04:11.900 --> 00:04:13.060 you never really knew what you were getting. 00:04:13.419 --> 00:04:16.899 Never. Imagine trying to dose out a really critical, 00:04:17.060 --> 00:04:20.339 powerful drug like morphine from a solution that 00:04:20.339 --> 00:04:23.220 might be, say, 10 % effective one day and 50 00:04:23.220 --> 00:04:27.160 % effective the next. Dosing was erratic. Efficacy 00:04:27.160 --> 00:04:30.620 was unreliable. It made patient recovery a real 00:04:30.620 --> 00:04:32.860 guessing game. Okay, so here's where it gets 00:04:32.860 --> 00:04:35.660 really interesting. He tackled this by isolating 00:04:35.660 --> 00:04:38.939 the active parts of medicinal plants, the alkaloids, 00:04:39.019 --> 00:04:42.759 things like quinine, codeine. even strychnine 00:04:42.759 --> 00:04:44.860 and morphine right and he formulated them into 00:04:44.860 --> 00:04:47.879 what he called dosimetric granules and that consistency 00:04:47.879 --> 00:04:50.379 was the secret sauce that was everything these 00:04:50.379 --> 00:04:53.060 tiny granules were manufactured in a standardized 00:04:53.060 --> 00:04:55.480 way which ensured that every single patient received 00:04:55.480 --> 00:04:58.629 a highly consistent and effective dosage Every 00:04:58.629 --> 00:05:00.750 single time. It was a simple idea, but just a 00:05:00.750 --> 00:05:02.910 vital advance in pharmaceutical precision and 00:05:02.910 --> 00:05:05.149 stability. It really was. It moved medicine away 00:05:05.149 --> 00:05:08.029 from the guesswork of old potions and tinctures 00:05:08.029 --> 00:05:10.810 and toward the industrial standardized dosing 00:05:10.810 --> 00:05:13.589 that we all expect today. That foundational focus 00:05:13.589 --> 00:05:15.709 on precision is what carried the company forward 00:05:15.709 --> 00:05:19.360 for decades. But the company we know today. This 00:05:19.360 --> 00:05:22.600 medical device and diagnostics powerhouse that 00:05:22.600 --> 00:05:25.560 didn't really solidify until they performed what 00:05:25.560 --> 00:05:27.420 you could almost call a massive act of corporate 00:05:27.420 --> 00:05:30.339 surgery in the 2010s. That's exactly right. The 00:05:30.339 --> 00:05:32.899 next truly pivotal phase, the one that reshaped 00:05:32.899 --> 00:05:36.019 the entire identity of Abbott Laboratories, happened 00:05:36.019 --> 00:05:39.819 between 2004 and 2013. You can see the strategic 00:05:39.819 --> 00:05:42.720 shift happening early on as they started sort 00:05:42.720 --> 00:05:45.889 of. pruning these mature divisions that didn't 00:05:45.889 --> 00:05:48.430 quite fit the high growth, high tech trajectory 00:05:48.430 --> 00:05:50.769 they were aiming for. Like in 2004, for example, 00:05:50.930 --> 00:05:52.970 they spun off Hospira, which was their entire 00:05:52.970 --> 00:05:55.370 hospital products division. And that division 00:05:55.370 --> 00:05:58.370 focused on specialty injectable pharmaceuticals 00:05:58.370 --> 00:06:01.879 and medication management. A huge business. So 00:06:01.879 --> 00:06:04.180 that pruning was strategic. Very strategic. And 00:06:04.180 --> 00:06:05.899 it's interesting, Hospira was later acquired 00:06:05.899 --> 00:06:09.079 by Pfizer in 2015, which just confirms that Abbott 00:06:09.079 --> 00:06:11.860 was willing to shed these large, profitable but 00:06:11.860 --> 00:06:13.980 less specialized parts of the business to focus 00:06:13.980 --> 00:06:16.279 its capital elsewhere. But the real defining 00:06:16.279 --> 00:06:18.579 moment, what you call the Great Divide, that 00:06:18.579 --> 00:06:21.079 happened on January 1st, 2013. Yes, with the 00:06:21.079 --> 00:06:23.740 corporate spinoff that created AbbVie. And this 00:06:23.740 --> 00:06:26.720 was monumental. This wasn't just a renaming. 00:06:26.740 --> 00:06:29.160 It was a deep structural cleaving of the company 00:06:29.160 --> 00:06:32.100 into two separate entities. So why did they choose 00:06:32.100 --> 00:06:34.439 to separate the pharmaceutical division, which 00:06:34.439 --> 00:06:37.680 was, frankly, producing enormous cash flow from 00:06:37.680 --> 00:06:39.420 the rest of the business? Well, the motivation 00:06:39.420 --> 00:06:42.399 was really twofold. De -risking and focusing. 00:06:43.040 --> 00:06:46.420 AbbVie took control of the research -based, patent 00:06:46.420 --> 00:06:49.040 -driven pharmaceutical business. This included 00:06:49.040 --> 00:06:51.480 the commercial rights to blockbuster drugs like 00:06:51.480 --> 00:06:54.939 the anti -inflammatory Humira and the antiepileptic 00:06:54.939 --> 00:06:58.079 Depakote. Okay, so huge revenue generators, but 00:06:58.079 --> 00:07:00.920 what was the risk? Well, while those drugs generated 00:07:00.920 --> 00:07:02.699 incredible revenue, they were also inherently 00:07:02.699 --> 00:07:04.759 tied up in what's called a heavy patent cliff, 00:07:04.980 --> 00:07:07.360 meaning their patent protection was set to expire 00:07:07.360 --> 00:07:09.899 soon. And they were also linked to massive litigation 00:07:09.899 --> 00:07:12.379 risks, which we'll definitely discuss later. 00:07:12.519 --> 00:07:15.620 Okay. So the key insight here is that Abbott 00:07:15.620 --> 00:07:17.579 Laboratories was essentially shedding the most 00:07:17.579 --> 00:07:20.939 volatile, high -risk part of its business. They 00:07:20.939 --> 00:07:23.100 were offloading the risk of patents expiring 00:07:23.100 --> 00:07:25.339 and the potential for these multibillion -dollar 00:07:25.339 --> 00:07:27.720 lawsuits attached to some older pharmaceutical 00:07:27.720 --> 00:07:31.079 practices. Precisely. Abbott Laboratories kept 00:07:31.079 --> 00:07:33.639 the global medical devices, the diagnostic tools, 00:07:33.899 --> 00:07:36.439 the highly stable nutritional products, your 00:07:36.439 --> 00:07:39.980 Similac and Ensure, and the branded generic drug 00:07:39.980 --> 00:07:42.639 portfolios that are marketed exclusively overseas. 00:07:43.139 --> 00:07:45.399 So it was a massive reorganization. Immense. 00:07:45.399 --> 00:07:47.699 It required them to cut hundreds of staff members 00:07:47.699 --> 00:07:49.959 in preparation, but it set the stage for the 00:07:49.959 --> 00:07:53.120 highly diversified, cash flow stable, tech -focused 00:07:53.120 --> 00:07:55.800 company we see today defined more by hardware 00:07:55.800 --> 00:07:58.579 and diagnostics than by drug patents. So if that 00:07:58.579 --> 00:08:00.980 split defined the modern Abbott, let's dive into 00:08:00.980 --> 00:08:03.279 those four core divisions that survived that. 00:08:03.680 --> 00:08:06.459 great corporate surgery and now account for that 00:08:06.459 --> 00:08:09.259 $41 .9 billion in annual revenue. Let's do it. 00:08:09.339 --> 00:08:11.500 And just as a quick reminder, medical devices 00:08:11.500 --> 00:08:14.500 is the biggest slice of the pie at 45 % of 2024 00:08:14.500 --> 00:08:17.459 revenue. Absolutely. The model is now set. 45 00:08:17.459 --> 00:08:20.519 % medical devices, 22 % nutritional products, 00:08:20.819 --> 00:08:24.579 20 % diagnostic products, and 13 % established 00:08:24.579 --> 00:08:27.519 pharmaceuticals. So let's start with Pillar A 00:08:27.519 --> 00:08:29.879 Nutrition. This is the division most people recognize, 00:08:30.000 --> 00:08:31.899 yet it's also one that has brought the company 00:08:31.899 --> 00:08:33.779 some really intense public scrutiny recently. 00:08:33.919 --> 00:08:36.659 Right. The nutrition division is home to some 00:08:36.659 --> 00:08:38.860 of the most recognizable brands in the world, 00:08:38.940 --> 00:08:41.960 playing a critical role in everything from feeding 00:08:41.960 --> 00:08:44.559 infants to providing supplemental nutrition for 00:08:44.559 --> 00:08:46.919 the elderly. And a key strategic moment here 00:08:46.919 --> 00:08:50.559 was the 1964 merger with Ross Laboratories. This 00:08:50.559 --> 00:08:52.639 didn't just add a few products. It immediately 00:08:52.639 --> 00:08:55.960 brought the iconic baby formula Similac under 00:08:55.960 --> 00:08:59.240 the Abbott umbrella. So Similac wasn't An original 00:08:59.240 --> 00:09:01.840 Abbott product. No, that acquisition secured 00:09:01.840 --> 00:09:04.620 their position in the highly regulated and immensely 00:09:04.620 --> 00:09:07.379 profitable infant nutrition market. It's really 00:09:07.379 --> 00:09:10.440 foundational to consumer trust. And Similac is 00:09:10.440 --> 00:09:13.120 just one entry in a surprisingly broad pediatric 00:09:13.120 --> 00:09:15.899 portfolio. They offer variations like Similac 00:09:15.899 --> 00:09:18.799 Neosure, Essentia, Tumacare. Often designed for 00:09:18.799 --> 00:09:20.919 specific infant needs like premature babies. 00:09:21.200 --> 00:09:23.700 Then, of course, you have Pedialyte for rehydration, 00:09:23.799 --> 00:09:25.759 which is a staple in households for children 00:09:25.759 --> 00:09:27.899 and, you know, increasingly for adults dealing. 00:09:27.980 --> 00:09:30.879 with illness or post -exercise recovery. And 00:09:30.879 --> 00:09:32.840 PediaSure for supplemental children's nutrition. 00:09:33.320 --> 00:09:35.799 Right. But the nutritional story doesn't end 00:09:35.799 --> 00:09:38.120 with kids. The adult and special needs category 00:09:38.120 --> 00:09:40.840 is enormous, and it's driven by demographic trends 00:09:40.840 --> 00:09:43.360 in developed markets. This is where you find 00:09:43.360 --> 00:09:46.240 the powerhouse brands like Ensure. A huge market 00:09:46.240 --> 00:09:48.580 leader. The market leader in providing complete 00:09:48.580 --> 00:09:51.419 balanced nutrition, including high protein versions 00:09:51.419 --> 00:09:54.720 like Ensure Gold. They successfully tapped into 00:09:54.720 --> 00:09:58.000 this vast market of aging populations and hospitalized 00:09:58.000 --> 00:10:00.519 patients. And they also cater to highly specialized 00:10:00.519 --> 00:10:02.960 dietary needs, too, particularly for. growing 00:10:02.960 --> 00:10:06.059 global diabetes population. Exactly. They have 00:10:06.059 --> 00:10:08.399 Glucerna, which is a brand marketed specifically 00:10:08.399 --> 00:10:10.740 for managing blood sugar levels in people with 00:10:10.740 --> 00:10:13.539 diabetes. And what's fascinating is the regional 00:10:13.539 --> 00:10:16.340 variation in branding. For example, in India, 00:10:16.460 --> 00:10:19.539 Glucerna is often branded as Ensure Diabetes 00:10:19.539 --> 00:10:21.759 Care. Why do they do that? It just shows how 00:10:21.759 --> 00:10:23.620 Abbott tailors its marketing and distribution 00:10:23.620 --> 00:10:27.340 strategy to local brand familiarity. The Ensure 00:10:27.340 --> 00:10:29.940 name is just more trusted in that market. And 00:10:29.940 --> 00:10:32.059 of course, they maintain a presence in convenience 00:10:32.059 --> 00:10:34.139 nutrition with products like Zone Perfect Bar. 00:10:34.320 --> 00:10:36.539 So it's their most publicly visible division, 00:10:36.720 --> 00:10:39.740 but often the most important work, particularly 00:10:39.740 --> 00:10:41.940 financially and technologically, is happening 00:10:41.940 --> 00:10:44.480 in the next two pillars. Let's move to Pillar 00:10:44.480 --> 00:10:47.580 B, Diagnostics. Yes. This is the division that 00:10:47.580 --> 00:10:49.940 truly showcases Abbott's ability to innovate 00:10:49.940 --> 00:10:52.879 rapidly and deploy technology on a massive scale. 00:10:53.240 --> 00:10:55.580 Diagnostics is all about understanding what is 00:10:55.580 --> 00:10:57.960 happening inside the human body, and it covers 00:10:57.960 --> 00:11:01.139 everything from routine blood work to complex 00:11:01.139 --> 00:11:04.000 disease surveillance. The division is highly 00:11:04.000 --> 00:11:06.700 diversified, so it covers core lab testing, molecular 00:11:06.700 --> 00:11:09.279 testing, rapid diagnostics, and point -of -care 00:11:09.279 --> 00:11:11.700 instruments. And that diversification allows 00:11:11.700 --> 00:11:14.759 them to serve massive hospital systems and individual 00:11:14.759 --> 00:11:17.879 consumers at the same time. Exactly. When you 00:11:17.879 --> 00:11:20.120 talk about rapid decentralized testing, the first 00:11:20.120 --> 00:11:23.159 product that comes to mind is iSTAT. What exactly 00:11:23.159 --> 00:11:25.700 is that and why is point of care testing so crucial? 00:11:26.019 --> 00:11:28.840 ISTAT is essentially a portable handheld lab 00:11:28.840 --> 00:11:31.200 analyzer. So instead of sending a blood sample 00:11:31.200 --> 00:11:33.360 off to a central lab where results might take 00:11:33.360 --> 00:11:35.919 hours, ISTAT allows medical professionals to 00:11:35.919 --> 00:11:38.080 get critical diagnostic information right at 00:11:38.080 --> 00:11:39.899 the patient's bedside in just a few minutes. 00:11:40.139 --> 00:11:43.039 And that speed is vital in an emergency room 00:11:43.039 --> 00:11:46.769 or a critical care setting. Everything. And our 00:11:46.769 --> 00:11:49.370 sources even note its utility in veterinary medicine, 00:11:49.509 --> 00:11:51.909 which just highlights its reliability and widespread 00:11:51.909 --> 00:11:54.769 application outside of traditional human healthcare. 00:11:55.009 --> 00:11:56.269 And then you have the other end of the spectrum. 00:11:56.889 --> 00:11:59.309 The massive, high -throughput lab platforms. 00:11:59.549 --> 00:12:02.570 Correct. For the massive volume required by hospitals 00:12:02.570 --> 00:12:04.730 and public health agencies, they have platforms 00:12:04.730 --> 00:12:07.990 like Alinity and Architect. These machines are 00:12:07.990 --> 00:12:10.529 just workhorse systems designed for high -throughput 00:12:10.529 --> 00:12:12.889 testing. They're capable of running thousands 00:12:12.889 --> 00:12:15.009 of samples quickly and accurately for everything 00:12:15.009 --> 00:12:17.590 from infectious disease screening to blood chemistry. 00:12:17.970 --> 00:12:20.409 And finally, the ultimate example of miniaturization 00:12:20.409 --> 00:12:24.929 and decentralization. The rapid tests. That's 00:12:24.929 --> 00:12:28.629 IDNOW, a small toaster -sized molecular platform 00:12:28.629 --> 00:12:31.750 that gives rapid PCR -like results. And of course, 00:12:31.750 --> 00:12:34.750 the globally famous Binaxino rapid antigen test. 00:12:35.070 --> 00:12:37.610 The Diagnostics Division has proven its capacity 00:12:37.610 --> 00:12:40.210 to innovate, to miniaturize, and crucially to 00:12:40.210 --> 00:12:42.450 scale, which became the single most important 00:12:42.450 --> 00:12:45.110 factor during the COVID -19 pandemic, a topic 00:12:45.110 --> 00:12:47.220 we will definitely get into later. OK, now we 00:12:47.220 --> 00:12:50.059 get to Pillar C medical devices. We said this 00:12:50.059 --> 00:12:52.759 is the largest revenue driver, accounting for 00:12:52.759 --> 00:12:55.820 45 percent of the company's total sales. This 00:12:55.820 --> 00:12:58.940 is where the complex, high margin, lifesaving 00:12:58.940 --> 00:13:01.779 hardware lives. And it requires immense R &D 00:13:01.779 --> 00:13:05.129 and really specialized manufacturing. This segment 00:13:05.129 --> 00:13:07.769 is Abbott's primary focus and is deeply involved 00:13:07.769 --> 00:13:10.210 in managing two of the most significant health 00:13:10.210 --> 00:13:13.450 challenges globally, cardiovascular disease and 00:13:13.450 --> 00:13:16.110 chronic pain. The scope is enormous. It is. It 00:13:16.110 --> 00:13:18.169 includes rhythm management, electrophysiology, 00:13:18.509 --> 00:13:21.509 heart failure solutions, structural heart repair, 00:13:21.710 --> 00:13:24.830 and neuromodulation. They are literally putting 00:13:24.830 --> 00:13:27.370 sophisticated hardware inside people to manage 00:13:27.370 --> 00:13:29.690 critical health issues. Let's break down some 00:13:29.690 --> 00:13:31.929 of these specific cardiovascular devices because 00:13:31.929 --> 00:13:35.120 the names alone, nitroclip, HeartMate. They sound 00:13:35.120 --> 00:13:36.860 like something out of science fiction. Can you 00:13:36.860 --> 00:13:38.620 give us an analogy for what some of these devices 00:13:38.620 --> 00:13:40.899 actually do? Sure. Let's start with the structural 00:13:40.899 --> 00:13:43.039 heart segment. The MitraClip, for example, is 00:13:43.039 --> 00:13:45.759 for mitral valve repair. The mitral valve controls 00:13:45.759 --> 00:13:48.100 blood flow between the two left chambers of the 00:13:48.100 --> 00:13:50.779 heart. If it leaks, which is called regurgitation, 00:13:50.980 --> 00:13:53.070 it can lead to heart failure. And that used to 00:13:53.070 --> 00:13:55.649 mean open heart surgery. Highly invasive open 00:13:55.649 --> 00:13:58.529 heart surgery. The MitraClip is a small device 00:13:58.529 --> 00:14:01.769 delivered minimally invasively via a catheter, 00:14:01.850 --> 00:14:04.250 which essentially clips the valve leaflets together 00:14:04.250 --> 00:14:07.289 to reduce the leakage. The innovation is moving 00:14:07.289 --> 00:14:10.190 from a six -hour surgery to a much less traumatic 00:14:10.190 --> 00:14:12.990 procedure with a much faster recovery. That's 00:14:12.990 --> 00:14:15.389 a huge quality of life improvement. What about 00:14:15.389 --> 00:14:18.059 other devices? Well, you also have the Amplatzer 00:14:18.059 --> 00:14:21.700 Piccolo Occluder, which is a tiny wire mesh device 00:14:21.700 --> 00:14:24.019 used to close holes in the hearts of newborns 00:14:24.019 --> 00:14:26.379 and infants, especially for a condition called 00:14:26.379 --> 00:14:29.799 patent ductus arteriosus. And for severe heart 00:14:29.799 --> 00:14:32.379 failure, they produce the HeartMate system, which 00:14:32.379 --> 00:14:34.639 often refers to their left ventricular assist 00:14:34.639 --> 00:14:38.759 devices, or LVADs. An LVAD is a mechanical pump 00:14:38.759 --> 00:14:41.019 implanted in the chest that helps the weak left 00:14:41.019 --> 00:14:43.039 ventricle pump blood throughout the body. So 00:14:43.039 --> 00:14:45.139 for some patients, it's a bridge to a heart transplant. 00:14:45.799 --> 00:14:48.600 others is a permanent solution. Exactly. Destination 00:14:48.600 --> 00:14:51.179 therapy. So they're making tiny repair tools 00:14:51.179 --> 00:14:53.840 for babies and powerful mechanical pumps for 00:14:53.840 --> 00:14:56.799 adults. It covers an enormous spectrum. It really 00:14:56.799 --> 00:14:59.820 does. And we can't forget basic vascular access, 00:15:00.120 --> 00:15:03.179 like the Sien's drug -eluting stent, which helps 00:15:03.179 --> 00:15:05.779 keep coronary arteries open after a blockage, 00:15:05.820 --> 00:15:09.279 and the CardioMems system, which is a miniaturized 00:15:09.279 --> 00:15:11.799 sensor implanted in the pulmonary artery that 00:15:11.799 --> 00:15:14.720 allows doctors to remotely monitor pressure changes 00:15:14.720 --> 00:15:17.539 in heart failure patients. So that lets physicians 00:15:17.539 --> 00:15:20.059 intervene before a patient is hospitalized. It's 00:15:20.059 --> 00:15:22.539 turning reactive care into proactive management. 00:15:22.740 --> 00:15:25.240 That's the goal. And innovation continues rapidly 00:15:25.240 --> 00:15:28.169 in their rhythm management portfolio. We saw 00:15:28.169 --> 00:15:32.610 the July 2023 FDA approval for the AveraDR leadless 00:15:32.610 --> 00:15:35.529 pacemaker system. Why is leadless such a big 00:15:35.529 --> 00:15:38.509 deal for pacemakers? It's a huge deal. Traditional 00:15:38.509 --> 00:15:41.190 pacemakers rely on these thin wires or leads 00:15:41.190 --> 00:15:43.370 that run from the device, which is implanted 00:15:43.370 --> 00:15:45.830 under the collarbone down to the heart. And these 00:15:45.830 --> 00:15:47.710 leads can fracture, they can become infected, 00:15:47.769 --> 00:15:50.070 or cause blockages over time. Which would require 00:15:50.070 --> 00:15:52.990 another surgery to fix. A complex and high -risk 00:15:52.990 --> 00:15:56.070 surgical removal, often. The AveraDR is about 00:15:56.070 --> 00:15:58.330 the size of a vitamin. implanted directly into 00:15:58.330 --> 00:16:00.990 the heart, and crucially, it eliminates the need 00:16:00.990 --> 00:16:03.769 for those leads entirely. This significantly 00:16:03.769 --> 00:16:06.529 reduces complications and simplifies the procedure. 00:16:06.789 --> 00:16:09.570 It is truly the next generation of cardiac rhythm 00:16:09.570 --> 00:16:11.850 management. Okay, let's turn to the other major 00:16:11.850 --> 00:16:15.289 subsegment in devices, neuromodulation. This 00:16:15.289 --> 00:16:17.690 focuses on using electrical stimulation to manage 00:16:17.690 --> 00:16:20.450 neurological issues and chronic pain. Right. 00:16:20.570 --> 00:16:22.970 This division develops these sophisticated systems 00:16:22.970 --> 00:16:25.289 to manage chronic pain and neurological disorders. 00:16:25.690 --> 00:16:28.429 They produce devices like the Infinity Deep Brain 00:16:28.429 --> 00:16:31.429 Stimulation System, which is used to treat movement 00:16:31.429 --> 00:16:34.429 disorders like Parkinson's and spinal cord stimulators 00:16:34.429 --> 00:16:37.250 for chronic back and limb pain, like the Proclaim 00:16:37.250 --> 00:16:40.470 XR Recharge Free Spinal Cord Stimulator. The 00:16:40.470 --> 00:16:42.309 technical names for the technologies they use 00:16:42.309 --> 00:16:44.850 are pretty dense. Burst DR technology, Flex Burst 00:16:44.850 --> 00:16:47.149 360 technology. What is the listener supposed 00:16:47.149 --> 00:16:49.009 to understand about the innovation behind those 00:16:49.009 --> 00:16:51.340 names? Well, the insight is that this is not 00:16:51.340 --> 00:16:54.399 just a steady electrical current. BurstDR technology, 00:16:54.799 --> 00:16:57.419 for example, delivers pulses that mimic the body's 00:16:57.419 --> 00:17:00.340 natural nerve -firing patterns, which studies 00:17:00.340 --> 00:17:02.559 suggest is much more effective at disrupting 00:17:02.559 --> 00:17:05.259 pain signals than older, constant stimulation 00:17:05.259 --> 00:17:08.240 methods. And the key consumer benefit for the 00:17:08.240 --> 00:17:11.119 Proclaim XR is right in the name, recharge -free. 00:17:11.470 --> 00:17:14.630 Exactly. Because of their low power design, these 00:17:14.630 --> 00:17:17.410 systems can often last up to 10 years without 00:17:17.410 --> 00:17:20.170 needing to be recharged. And that is a massive 00:17:20.170 --> 00:17:22.309 quality of life improvement for the patient compared 00:17:22.309 --> 00:17:24.690 to having to plug in a charging vest every night. 00:17:24.950 --> 00:17:28.170 Finally, Pillar D, the established pharmaceuticals 00:17:28.170 --> 00:17:30.569 division. It's the smallest component at 13%. 00:17:30.569 --> 00:17:33.930 After spinning off the primary R &D pharma to 00:17:33.930 --> 00:17:36.349 AbbVie, why did AbbVie even keep this smaller 00:17:36.349 --> 00:17:38.799 pharmaceutical arm? Well, this division fulfills 00:17:38.799 --> 00:17:41.819 a very specific, low -risk, high -volume strategic 00:17:41.819 --> 00:17:44.980 role. It focuses specifically on branded generic 00:17:44.980 --> 00:17:47.500 drugs, and crucially, these are sold exclusively 00:17:47.500 --> 00:17:49.480 in developing and emerging markets. So these 00:17:49.480 --> 00:17:51.380 are medicines that have long since gone off patent 00:17:51.380 --> 00:17:54.690 globally. Right. But Abbott manufactures and 00:17:54.690 --> 00:17:57.569 markets them under local trusted brand names 00:17:57.569 --> 00:18:00.589 in countries where access to affordable quality 00:18:00.589 --> 00:18:03.329 medicine is absolutely paramount. So it provides 00:18:03.329 --> 00:18:05.809 reliable cash flow and a vital international 00:18:05.809 --> 00:18:09.009 foothold without the massive R &D spending and 00:18:09.009 --> 00:18:11.349 patent litigation risks that come with new drug 00:18:11.349 --> 00:18:14.150 development. Exactly. It leverages drugs developed 00:18:14.150 --> 00:18:16.470 and proven years ago, maintaining Abbott's brand 00:18:16.470 --> 00:18:18.829 presence in markets like Latin America, India 00:18:18.829 --> 00:18:21.529 and parts of Asia. It serves a public health 00:18:21.529 --> 00:18:24.180 need while generating stable, predictable revenues. 00:18:24.640 --> 00:18:27.619 It's a very different, lower -risk business model 00:18:27.619 --> 00:18:29.680 than the specialty drug focus that went with 00:18:29.680 --> 00:18:31.720 AbbVie. Okay, so now we understand the structure. 00:18:31.940 --> 00:18:33.920 Let's trace how Abbott got from those little 00:18:33.920 --> 00:18:36.900 Chicago granules in 1888 to becoming this truly 00:18:36.900 --> 00:18:39.700 global force with four massive pillars. It's 00:18:39.700 --> 00:18:42.359 really a century -plus story of strategic and 00:18:42.359 --> 00:18:44.519 often aggressive acquisition that constantly 00:18:44.519 --> 00:18:46.950 redefined the company. The road to becoming a 00:18:46.950 --> 00:18:50.529 $40 billion multinational was paved with calculated 00:18:50.529 --> 00:18:53.430 risk and strategic mergers. And they started 00:18:53.430 --> 00:18:56.349 taking international steps very early, establishing 00:18:56.349 --> 00:18:58.589 their first international affiliate in London 00:18:58.589 --> 00:19:01.849 in 1907 and later expanding to Montreal, Canada. 00:19:02.670 --> 00:19:05.630 This early global vision was critical. And we 00:19:05.630 --> 00:19:07.710 saw them strategically planting flags in developing 00:19:07.710 --> 00:19:10.549 markets well before it was common for U .S. companies. 00:19:10.809 --> 00:19:14.250 By 1948, they'd established operations in Pakistan 00:19:14.250 --> 00:19:16.650 as a marketing affiliate. Which now has a workforce 00:19:16.650 --> 00:19:19.549 of over 1 ,500 employees and two manufacturing 00:19:19.549 --> 00:19:22.230 facilities there. That commitment to maintaining 00:19:22.230 --> 00:19:24.970 local manufacturing capacity gives them really 00:19:24.970 --> 00:19:27.829 deep roots in global supply chains. And as we 00:19:27.829 --> 00:19:30.170 noted, the acquisition history is the clearest 00:19:30.170 --> 00:19:33.269 roadmap of their diversification. The key early 00:19:33.269 --> 00:19:35.490 move that defined their consumer presence was 00:19:35.490 --> 00:19:38.769 that merger with Ross Laboratories in 1964. That 00:19:38.769 --> 00:19:41.029 was monumental. It instrumentalized their shift 00:19:41.029 --> 00:19:42.549 into nutrition, bringing in their foundational 00:19:42.549 --> 00:19:44.970 products like Similac, Pedialate, and Ensure. 00:19:45.029 --> 00:19:46.829 That secured their major presence in consumer 00:19:46.829 --> 00:19:49.089 health, which balanced the more volatile pharma 00:19:49.089 --> 00:19:51.549 and emerging device markets. And they continued 00:19:51.549 --> 00:19:54.289 to beef up the pharmaceutical side, the part 00:19:54.289 --> 00:19:56.109 that would eventually become AbbVie before the 00:19:56.109 --> 00:19:59.349 split. That's right. In the early 2000s, they 00:19:59.349 --> 00:20:01.869 acquired Null, the pharmaceutical division of 00:20:01.869 --> 00:20:06.329 BASF, for a substantial $6 .9 billion in 2001. 00:20:06.910 --> 00:20:11.289 Then, in 2010, they acquired Solvay Essay's pharma 00:20:11.289 --> 00:20:14.710 unit. for $6 .2 billion. And there was a specific 00:20:14.710 --> 00:20:17.509 target there. Yes. Note the targeting here. The 00:20:17.509 --> 00:20:19.730 Solvay acquisition was specifically aimed at 00:20:19.730 --> 00:20:22.150 increasing their emerging market presence, directly 00:20:22.150 --> 00:20:24.450 strengthening the very established pharmaceuticals 00:20:24.450 --> 00:20:26.490 division that they kept after the AbbVie split. 00:20:26.690 --> 00:20:29.609 They were building robust market access. So if 00:20:29.609 --> 00:20:32.640 the 1960s secured nutrition, The late 2000s and 00:20:32.640 --> 00:20:35.000 2010s were all about aggressive consolidation 00:20:35.000 --> 00:20:37.799 in medtech and diagnostics, which, as we know, 00:20:37.920 --> 00:20:39.859 are now their two largest, highest growth segments. 00:20:39.980 --> 00:20:42.559 Absolutely. Just look at diabetes care. The acquisition 00:20:42.559 --> 00:20:45.460 of Theracense in 2004 laid the foundational technological 00:20:45.460 --> 00:20:47.779 groundwork for continuous glucose monitoring. 00:20:48.039 --> 00:20:50.740 They merged Theracense with their existing medicines 00:20:50.740 --> 00:20:52.839 division. And that marriage of technology and 00:20:52.839 --> 00:20:54.940 infrastructure ultimately led to the launch of 00:20:54.940 --> 00:20:56.960 the breakthrough Freestyle Libre line. Which 00:20:56.960 --> 00:21:00.579 gained that pivotal FDA approval in 2017. And 00:21:00.579 --> 00:21:03.220 this line shifted diabetes management from painful, 00:21:03.359 --> 00:21:06.400 episodic finger pricks to continuous, ongoing 00:21:06.400 --> 00:21:09.460 monitoring. The cardiology consolidation, though, 00:21:09.480 --> 00:21:11.460 is where the price tags truly became massive. 00:21:11.740 --> 00:21:14.160 It started with acquiring the vascular device 00:21:14.160 --> 00:21:17.640 division of Guidant in 2006. But the real game 00:21:17.640 --> 00:21:21.279 changer came in 2017. The monumental $25 billion 00:21:21.279 --> 00:21:24.960 acquisition of St. Jude Medical. $25 billion. 00:21:25.279 --> 00:21:27.940 It wasn't just a merger. It was a declaration. 00:21:28.559 --> 00:21:32.460 $25 billion instantly vaulted Abbott into a leadership 00:21:32.460 --> 00:21:35.259 position across structural heart, rhythm management, 00:21:35.339 --> 00:21:38.369 and neuromodulation. Jude was a massive player 00:21:38.369 --> 00:21:40.890 in complex, high -margin cardiovascular devices. 00:21:41.269 --> 00:21:43.029 So Abbott didn't just buy a company. They bought 00:21:43.029 --> 00:21:46.710 cop -tier R &D, manufacturing capacity, and a 00:21:46.710 --> 00:21:49.309 massive portfolio of intellectual property. Making 00:21:49.309 --> 00:21:51.950 them an immediate, formidable competitor to companies 00:21:51.950 --> 00:21:53.950 like Medtronic. And when you look at an acquisition 00:21:53.950 --> 00:21:56.049 of that scale, it doesn't just change Abbott. 00:21:56.150 --> 00:21:58.750 It fundamentally changes the entire global medtech 00:21:58.750 --> 00:22:01.269 landscape. They bet their future on devices and 00:22:01.269 --> 00:22:04.049 hardware. And they haven't slowed down. Just 00:22:04.049 --> 00:22:07.069 recently, in 2023, they acquired Cardiovascular 00:22:07.069 --> 00:22:10.410 Systems, Inc., keeping that 45 % medical devices 00:22:10.410 --> 00:22:13.410 segment growing aggressively. And they matched 00:22:13.410 --> 00:22:15.369 that aggressive scaling in diagnostics, too. 00:22:15.490 --> 00:22:18.569 The $5 .8 billion acquisition of Allure in 2017 00:22:18.569 --> 00:22:21.470 was strategically significant, particularly for 00:22:21.470 --> 00:22:23.609 their point -of -care testing capabilities, which 00:22:23.609 --> 00:22:25.589 later became instrumental during the pandemic. 00:22:25.950 --> 00:22:28.650 That Allure deal also included the subsidiary 00:22:28.650 --> 00:22:31.460 Arriva Medical. which was at one point the largest 00:22:31.460 --> 00:22:34.039 mail -order diabetic supplier in the U .S. It 00:22:34.039 --> 00:22:36.279 was, although those facilities later closed in 00:22:36.279 --> 00:22:38.900 late 2017 due to operational challenges and compliance 00:22:38.900 --> 00:22:41.160 issues, which we'll touch on later. But the acquisition 00:22:41.160 --> 00:22:43.839 still brought Abbott critical rapid diagnostics 00:22:43.839 --> 00:22:46.119 technology. And the trajectory shows continued 00:22:46.119 --> 00:22:48.880 aggressive movement into deep diagnostics. Our 00:22:48.880 --> 00:22:51.299 source materials point to a major future acquisition. 00:22:51.740 --> 00:22:55.180 The agreement announced in November 2025 to acquire 00:22:55.180 --> 00:22:58.319 Exact Sciences Core for roughly $21 billion. 00:22:59.359 --> 00:23:02.339 That is a staggering number and a crystal clear 00:23:02.339 --> 00:23:05.039 signal. Exact Sciences is known for Coligard, 00:23:05.220 --> 00:23:07.359 its non -invasive cancer screening technology. 00:23:08.039 --> 00:23:11.519 Acquiring them for over $20 billion means Abbott 00:23:11.519 --> 00:23:15.000 sees complex, deep diagnostics beyond just acute 00:23:15.000 --> 00:23:18.099 infections as absolutely central to their future. 00:23:18.319 --> 00:23:20.880 They're integrating their core lab testing capabilities 00:23:20.880 --> 00:23:23.890 with advanced molecular screening. They're clearly 00:23:23.890 --> 00:23:26.529 looking to dominate the next generation of preventative 00:23:26.529 --> 00:23:29.109 and diagnostic medicine. No question. This incredible 00:23:29.109 --> 00:23:31.029 scale and diversification, of course, has not 00:23:31.029 --> 00:23:33.490 come without intense scrutiny. When you operate 00:23:33.490 --> 00:23:36.289 in over 160 countries and your products are literally 00:23:36.289 --> 00:23:39.529 keeping people alive, you inevitably face significant 00:23:39.529 --> 00:23:42.660 regulatory and legal challenges. This next section 00:23:42.660 --> 00:23:45.400 is a necessary look at some of those controversies 00:23:45.400 --> 00:23:47.700 and liabilities. It's crucial context, and we 00:23:47.700 --> 00:23:49.559 have to start with tax strategies, which have 00:23:49.559 --> 00:23:53.019 drawn significant fire globally. Abbott, like 00:23:53.019 --> 00:23:55.720 many large US multinationals, has been referenced 00:23:55.720 --> 00:23:58.319 in numerous reports for utilizing these intricate, 00:23:58.460 --> 00:24:01.240 sophisticated corporate structures designed specifically 00:24:01.240 --> 00:24:04.519 to reduce taxation on non -US profits. And this 00:24:04.519 --> 00:24:07.059 often involves Ireland, which historically offered 00:24:07.059 --> 00:24:09.660 highly favorable tax regimes for companies moving 00:24:09.660 --> 00:24:12.460 intellectual property and profits through the 00:24:12.460 --> 00:24:15.200 country. Specifically, the company allegedly 00:24:15.200 --> 00:24:18.380 utilized tax avoidance schemes like the infamous 00:24:18.380 --> 00:24:22.000 Double Irish Arrangement and the later Single 00:24:22.000 --> 00:24:25.059 Malt Tax Structure. Yeah. And if we unpack that 00:24:25.059 --> 00:24:27.559 complex terminology for the listener, the mechanism 00:24:27.559 --> 00:24:30.359 generally involves licensing intellectual property. 00:24:30.519 --> 00:24:33.180 So patents for medical devices or drug formulas 00:24:33.180 --> 00:24:36.460 to a subsidiary established in a low tax jurisdiction 00:24:36.460 --> 00:24:38.900 like Ireland, which is then resident for tax 00:24:38.900 --> 00:24:41.960 purposes in a zero tax haven like Bermuda. And 00:24:41.960 --> 00:24:43.960 this shifting of intellectual property allows 00:24:43.960 --> 00:24:46.480 the U .S. company to pay substantial royalties 00:24:46.480 --> 00:24:49.579 to the offshore entity. Effectively moving billions 00:24:49.579 --> 00:24:52.930 in profit out of higher tax jurisdictions. And 00:24:52.930 --> 00:24:54.930 the specific details of Abbott's structure are 00:24:54.930 --> 00:24:57.109 really striking. Our sources detail a Bermuda 00:24:57.109 --> 00:24:59.230 resident Irish holding company called Abbott 00:24:59.230 --> 00:25:02.910 Laboratories Vascular Enterprises, or ALVE. This 00:25:02.910 --> 00:25:05.170 entity was structured as an unlimited liability 00:25:05.170 --> 00:25:07.690 company, meaning it historically didn't have 00:25:07.690 --> 00:25:09.809 to file public accounts in Ireland. But some 00:25:09.809 --> 00:25:12.839 documents did emerge. They did. And they showed 00:25:12.839 --> 00:25:16.519 ALVE had pre -tax profits of 2 billion euros 00:25:16.519 --> 00:25:19.640 on 5 .2 billion euros in revenues between 2016 00:25:19.640 --> 00:25:23.619 and 2017. And the crucial controversial sale 00:25:23.619 --> 00:25:27.339 element, it allegedly paid no taxation on those 00:25:27.339 --> 00:25:29.339 profits. And the supporting detail makes the 00:25:29.339 --> 00:25:31.940 function of this structure pretty clear. ALVE, 00:25:31.960 --> 00:25:33.859 the holding company responsible for distributing 00:25:33.859 --> 00:25:35.960 products and licensing technology worldwide, 00:25:36.359 --> 00:25:40.420 reportedly employed no staff in 2017. Zero staff. 00:25:41.000 --> 00:25:43.680 It operates as a pure financial mechanism for 00:25:43.680 --> 00:25:46.140 profit repatriation, and it highlights that thin 00:25:46.140 --> 00:25:48.980 line between aggressive tax planning and perceived 00:25:48.980 --> 00:25:51.619 corporate responsibility. OK, moving away from 00:25:51.619 --> 00:25:53.799 financial practices, the company has a significant 00:25:53.799 --> 00:25:56.380 history of high profile federal fraud and kickback 00:25:56.380 --> 00:25:58.240 settlements stemming from its pharmaceutical 00:25:58.240 --> 00:26:00.940 division before the Abbey split. These cases 00:26:00.940 --> 00:26:02.619 reveal some of the cultural challenges that existed 00:26:02.619 --> 00:26:05.759 within that drug marketing arm. They do. The 00:26:05.759 --> 00:26:08.160 earliest major incident we have details on is 00:26:08.160 --> 00:26:11.819 the Luper -Rellen case. It involved TTAP Pharmaceutical 00:26:11.819 --> 00:26:14.880 Products, which was a 50 -50 joint venture between 00:26:14.880 --> 00:26:17.200 Abbott Laboratories and Takeda Chemical Industries. 00:26:17.519 --> 00:26:21.380 In October 2001, TAP settled criminal and civil 00:26:21.380 --> 00:26:23.200 charges for federal and state Medicare fraud 00:26:23.200 --> 00:26:25.720 and illegal marketing. And that settlement was 00:26:25.720 --> 00:26:29.750 enormous for the time. $875 million in total. 00:26:29.950 --> 00:26:33.329 It was. It included $290 million for violating 00:26:33.329 --> 00:26:35.950 the Prescription Drug Marketing Act and another 00:26:35.950 --> 00:26:39.650 $559 .5 million for overcharging Medicare by 00:26:39.650 --> 00:26:42.170 inflating the price of the drug Lupron. At the 00:26:42.170 --> 00:26:44.529 time, it was a record -high pharmaceutical settlement. 00:26:44.710 --> 00:26:46.670 And it was largely driven by whistleblower lawsuits. 00:26:46.970 --> 00:26:49.390 Yes, filed under the False Claims Act. It sent 00:26:49.390 --> 00:26:51.109 shockwaves through the entire pharmaceutical 00:26:51.109 --> 00:26:53.130 industry, indicating that the U .S. government 00:26:53.130 --> 00:26:55.970 was prepared to prosecute systematic fraud aggressively. 00:26:56.559 --> 00:26:58.579 And legal troubles were not isolated. Just two 00:26:58.579 --> 00:27:01.700 years later, in 2003, came Operation Headwaters. 00:27:01.819 --> 00:27:04.220 Right, where Abbott and two of its units agreed 00:27:04.220 --> 00:27:06.619 to pay a combined civil settlement and criminal 00:27:06.619 --> 00:27:09.299 conviction of $600 million for offering illegal 00:27:09.299 --> 00:27:11.619 kickbacks to physicians to encourage them to 00:27:11.619 --> 00:27:13.400 prescribe the company's product. The fact that 00:27:13.400 --> 00:27:16.039 they were caught offering kickbacks, even to 00:27:16.039 --> 00:27:19.680 FBI undercover agents, speaks volumes. It does. 00:27:19.839 --> 00:27:22.279 It suggests the pervasive, systemic nature of 00:27:22.279 --> 00:27:24.099 the marketing practices they were employing. 00:27:24.119 --> 00:27:26.579 And this culture continued right up until the 00:27:26.579 --> 00:27:30.059 point of the AbbVie split. In 2012, they faced 00:27:30.059 --> 00:27:32.779 another major fine, this time concerning the 00:27:32.779 --> 00:27:35.779 drug Dipakote. The Dipakote case resulted in 00:27:35.779 --> 00:27:41.079 a $500 million fine and a $198 .5 million forfeiture 00:27:41.079 --> 00:27:43.660 for illegal marketing. This was specifically 00:27:43.660 --> 00:27:46.700 for off -label promotion. Meaning they marketed 00:27:46.700 --> 00:27:49.019 the drug for uses that had not been approved 00:27:49.019 --> 00:27:51.799 as safe and effective by the FDA. Why is off 00:27:51.799 --> 00:27:54.559 -label promotion such a severe legal transgression? 00:27:54.819 --> 00:27:57.420 Because the FDA is tasked with ensuring patient 00:27:57.420 --> 00:28:00.339 safety and efficacy. When a company markets a 00:28:00.339 --> 00:28:03.299 drug for an unapproved, use -like marketing depakote 00:28:03.299 --> 00:28:05.759 for elderly dementia patients, which the FDA 00:28:05.759 --> 00:28:08.519 never approved, they are circumventing the fundamental 00:28:08.519 --> 00:28:10.660 safety checks designed to protect the public. 00:28:11.660 --> 00:28:13.720 viewed this as placing corporate profit above 00:28:13.720 --> 00:28:16.119 patient well -being. Hence the half billion dollar 00:28:16.119 --> 00:28:19.099 penalty. More recently, the focus shifted to 00:28:19.099 --> 00:28:22.250 their diagnostics acquisitions post -split. In 00:28:22.250 --> 00:28:25.210 2021, two subsidiaries that were part of that 00:28:25.210 --> 00:28:28.009 2017 Allaire acquisition, Arriva Medical and 00:28:28.009 --> 00:28:31.170 Allaire Inc., paid a $160 million settlement 00:28:31.170 --> 00:28:34.730 to resolve claims that they fraudulently billed 00:28:34.730 --> 00:28:36.730 Medicare for glucose monitors. The Department 00:28:36.730 --> 00:28:39.250 of Justice alleged that Arriva used free glucose 00:28:39.250 --> 00:28:41.750 monitors to essentially induce patients to order 00:28:41.750 --> 00:28:44.490 more consumable supplies, which constituted kickbacks 00:28:44.490 --> 00:28:46.990 on the increased sales. But what's even more 00:28:46.990 --> 00:28:48.609 egregious is that they were accused of charging 00:28:48.609 --> 00:28:50.609 Medicare for devices given to patients who are 00:28:50.609 --> 00:28:53.400 ineligible. or even deceased. Wow. That just 00:28:53.400 --> 00:28:55.920 paints a picture of systemic, profit -driven 00:28:55.920 --> 00:28:58.400 fraud within those subsidiary operations. It 00:28:58.400 --> 00:29:00.279 does, and it underscores the risk of acquiring 00:29:00.279 --> 00:29:03.039 large companies with potentially complex compliance 00:29:03.039 --> 00:29:06.220 issues. Beyond financial impropriety, product 00:29:06.220 --> 00:29:08.140 safety issues have brought the company under 00:29:08.140 --> 00:29:10.619 intense public pressure, particularly concerning 00:29:10.619 --> 00:29:13.460 its nutritional products. The most high -profile 00:29:13.460 --> 00:29:15.880 incident in recent memory was, of course, the 00:29:15.880 --> 00:29:18.759 infant formula crisis. The infant formula recall 00:29:18.759 --> 00:29:21.579 of 2022 was a significant public health crisis. 00:29:22.319 --> 00:29:24.279 Abbott recalled baby formulas from the market 00:29:24.279 --> 00:29:26.279 and had to shut down its Michigan manufacturing 00:29:26.279 --> 00:29:29.420 plant following complaints of illness and death 00:29:29.420 --> 00:29:32.160 in infants caused by serious bacterial infections, 00:29:32.460 --> 00:29:35.519 specifically Chronobacter sakazaki. And the subsequent 00:29:35.519 --> 00:29:38.039 national formula shortage created immense pressure 00:29:38.039 --> 00:29:40.440 on the company and regulators. The public trust 00:29:40.440 --> 00:29:42.839 damage was substantial. It was, even though the 00:29:42.839 --> 00:29:45.619 facility was allowed to reopen in June 2022 after 00:29:45.619 --> 00:29:48.539 meeting FDA requirements. But the legal fallout 00:29:48.539 --> 00:29:51.480 is still ongoing and severe, specifically regarding 00:29:51.630 --> 00:29:53.789 premature infants. This is where we touch upon 00:29:53.789 --> 00:29:56.869 the necrotizing enterocolitis or NEC lawsuit. 00:29:57.230 --> 00:30:00.769 In July 2024, a jury ordered Abbott to pay a 00:30:00.769 --> 00:30:04.710 staggering $495 million jury verdict in the case 00:30:04.710 --> 00:30:07.089 of Margot Gill versus Abbott Laboratories. Right. 00:30:07.130 --> 00:30:09.210 To understand the gravity of that half billion 00:30:09.210 --> 00:30:11.250 dollar number, you need to understand what NEC 00:30:11.250 --> 00:30:14.130 is. Please explain. Necrotizing enterocolitis 00:30:14.130 --> 00:30:17.250 is a devastating, life -threatening gastrointestinal 00:30:17.250 --> 00:30:19.710 disease that primarily affects premature infants, 00:30:20.049 --> 00:30:23.309 where tissue in the intestines dies. The lawsuit 00:30:23.309 --> 00:30:25.849 alleged that Abbott's cow's milk -based infant 00:30:25.849 --> 00:30:28.670 formula, when given to premature babies, significantly 00:30:28.670 --> 00:30:31.490 increased the risk of developing NEC compared 00:30:31.490 --> 00:30:34.730 to human breast milk or donor milk. And the severity 00:30:34.730 --> 00:30:36.890 of the disease and the vulnerability of the patients 00:30:36.890 --> 00:30:39.670 made this case particularly high stakes. Extremely. 00:30:39.670 --> 00:30:47.980 And the verdict itself was divided. And when 00:30:47.980 --> 00:30:50.319 a jury awards punitive damages of that scale, 00:30:50.539 --> 00:30:53.259 it signals strong disapproval of the defendant's 00:30:53.259 --> 00:30:55.880 conduct. It makes you wonder, does the source 00:30:55.880 --> 00:30:58.119 material suggest Abbott has a long -term plan 00:30:58.119 --> 00:31:01.220 to mitigate this specific product liability risk? 00:31:01.400 --> 00:31:03.799 Or is the sheer revenue from their other devices 00:31:03.799 --> 00:31:06.160 simply enough to absorb these kinds of costs? 00:31:06.640 --> 00:31:08.779 That dynamic tension is exactly what defines 00:31:08.779 --> 00:31:11.259 modern Abbott. The revenues from devices and 00:31:11.259 --> 00:31:14.619 diagnostics are immense, but the liability attached 00:31:14.619 --> 00:31:17.799 to infant nutrition is catastrophic. The long 00:31:17.799 --> 00:31:20.059 -term plan involves rigorous recertification 00:31:20.059 --> 00:31:22.240 of their facilities and massive investment in 00:31:22.240 --> 00:31:24.700 quality control. But the public relations and 00:31:24.700 --> 00:31:27.380 legal battles will continue for years. It really 00:31:27.380 --> 00:31:29.519 highlights that no matter how sophisticated your 00:31:29.519 --> 00:31:32.140 high -tech division is, Basic consumer product 00:31:32.140 --> 00:31:34.700 safety remains a core vulnerability. Absolutely. 00:31:34.980 --> 00:31:36.940 And it's not just nutritional products facing 00:31:36.940 --> 00:31:39.119 recalls, though. Their cutting -edge medical 00:31:39.119 --> 00:31:41.960 devices, the source of 45 % of their revenue, 00:31:42.119 --> 00:31:44.759 are also subject to safety concerns. Certainly. 00:31:44.859 --> 00:31:48.559 In July 2023, Abbott had to recall certain Proclaim 00:31:48.559 --> 00:31:51.259 and Infinity IPGs. Those are the implanted pulse 00:31:51.259 --> 00:31:54.140 generators used in deep brain stimulation and 00:31:54.140 --> 00:31:57.220 spinal cord stimulation. The issue was that patients 00:31:57.220 --> 00:32:00.200 were sometimes unable to exit MRI mode. And what 00:32:00.200 --> 00:32:02.279 happened? if the patient can't exit mri mode 00:32:02.279 --> 00:32:05.000 the device is subject to electromagnetic interference 00:32:05.000 --> 00:32:07.720 that can cause permanent damage potentially requiring 00:32:07.720 --> 00:32:10.160 surgery to remove or replace the implanted device 00:32:10.160 --> 00:32:13.200 this is a severe complication how many incidents 00:32:13.200 --> 00:32:16.700 were there our sources confirm 186 reported incidents 00:32:16.700 --> 00:32:19.640 and 73 reported injuries though thankfully no 00:32:19.640 --> 00:32:22.519 deaths it just demonstrates the high risk high 00:32:22.519 --> 00:32:24.740 reward nature of pioneering medical hardware 00:32:25.369 --> 00:32:28.529 These technologies change lives, but even minor 00:32:28.529 --> 00:32:31.210 software or component failures can have major 00:32:31.210 --> 00:32:33.369 life -altering consequences for the patient. 00:32:33.750 --> 00:32:36.930 Okay, let's pivot now from the history of controversies 00:32:36.930 --> 00:32:39.250 to the most powerful demonstration of Abbott's 00:32:39.250 --> 00:32:42.390 current strength. Diagnostics, particularly during 00:32:42.390 --> 00:32:45.609 the height of the global crisis. The COVID -19 00:32:45.609 --> 00:32:48.150 pandemic response showcased their agility and 00:32:48.150 --> 00:32:50.589 their rapid innovation capability. It was without 00:32:50.589 --> 00:32:53.150 a doubt an inflection point for the entire diagnostics 00:32:53.150 --> 00:32:55.809 division. Abbott proved they were not just big, 00:32:55.829 --> 00:32:58.869 but fast. They were incredibly agile in securing 00:32:58.869 --> 00:33:01.930 emergency use authorizations, or EUAs, starting 00:33:01.930 --> 00:33:04.309 with molecular tests very early in the pandemic. 00:33:04.549 --> 00:33:06.670 They rolled out tests for both the IDNow system, 00:33:06.789 --> 00:33:08.730 that small toaster -sized machine that gave highly 00:33:08.730 --> 00:33:10.990 accurate molecular results in as little as 13 00:33:10.990 --> 00:33:13.289 minutes, and their high -throughput lab platforms 00:33:13.289 --> 00:33:16.309 like M2000 and Alinity by March and May of 2020. 00:33:16.839 --> 00:33:18.799 Which meant they were immediately covering both 00:33:18.799 --> 00:33:20.880 centralized hospital testing and decentralized 00:33:20.880 --> 00:33:23.119 urgent care testing. A two -pronged approach. 00:33:23.460 --> 00:33:25.980 Exactly. They also moved quickly into serology, 00:33:26.220 --> 00:33:28.500 the antibody testing necessary for public health 00:33:28.500 --> 00:33:31.900 surveillance. They received EUA for IgG antibody 00:33:31.900 --> 00:33:34.319 tests on the Architect and Alinity eye systems 00:33:34.319 --> 00:33:37.200 in April and May 2020, helping establish who 00:33:37.200 --> 00:33:39.619 had previously been exposed to the virus. Their 00:33:39.619 --> 00:33:42.740 strategy was comprehensive, test for active infection 00:33:42.740 --> 00:33:45.779 and test for past exposure. But the true game 00:33:45.779 --> 00:33:48.059 changer. The product that made them a household 00:33:48.059 --> 00:33:50.920 name in the diagnostics space globally was the 00:33:50.920 --> 00:33:55.319 BinaxNiveW Rapid Antigen Test. This product crystallized 00:33:55.319 --> 00:33:57.299 the concept of decentralized health monitoring. 00:33:57.640 --> 00:34:01.000 Absolutely. Approved in August 2020, it was groundbreaking 00:34:01.000 --> 00:34:03.700 because it was credit card sized, delivered results 00:34:03.700 --> 00:34:06.359 in 15 minutes, and critically cost only about 00:34:06.359 --> 00:34:09.739 $5. It was cheap, fast, and portable. It was 00:34:09.739 --> 00:34:11.960 also compatible with the Navica mobile app to 00:34:11.960 --> 00:34:14.659 track results, providing a crucial, if short 00:34:14.659 --> 00:34:16.860 -lived, digital infrastructure. The scale of 00:34:16.860 --> 00:34:19.300 deployment was truly unprecedented, especially 00:34:19.300 --> 00:34:21.980 after the immense effort required to scale up. 00:34:22.320 --> 00:34:24.280 Forbes reported that the firm delivered over 00:34:24.280 --> 00:34:28.780 400 million COVID -19 tests in total. With 300 00:34:28.780 --> 00:34:30.860 million of those being shipped in the fourth 00:34:30.860 --> 00:34:33.880 quarter of 2020 alone. Just incredible. That 00:34:33.880 --> 00:34:35.760 showed they could not only innovate rapidly, 00:34:35.860 --> 00:34:39.320 but scale production to meet immense global emergency 00:34:39.320 --> 00:34:42.719 demand. And this capacity to scale diagnostics, 00:34:42.719 --> 00:34:44.900 even while simultaneously struggling with major 00:34:44.900 --> 00:34:47.000 quality control issues in their nutrition segment, 00:34:47.179 --> 00:34:50.050 shows the dichotomy of the modern Abbott. They 00:34:50.050 --> 00:34:52.809 are pioneers in one area and dangerously exposed 00:34:52.809 --> 00:34:55.269 in another. Looking ahead, Abbott is clearly 00:34:55.269 --> 00:34:57.650 leveraging that success and infrastructure in 00:34:57.650 --> 00:35:00.489 diagnostics and sensor technology into the consumer 00:35:00.489 --> 00:35:03.389 space. While their continuous glucose monitoring, 00:35:03.570 --> 00:35:06.610 or CGM, has been foundational, with the Freestyle 00:35:06.610 --> 00:35:09.369 Libre 3 receiving FDA clearance in May 2022, 00:35:09.889 --> 00:35:11.989 they've significantly broadened the application 00:35:11.989 --> 00:35:14.679 of that sensor technology. The Freestyle Libre 00:35:14.679 --> 00:35:16.980 line itself is a massive success story. The technology 00:35:16.980 --> 00:35:19.099 received the prestigious Galien Foundation Award 00:35:19.099 --> 00:35:22.000 for Best Medical Technology in the last 50 years. 00:35:22.219 --> 00:35:24.760 It acknowledges its transformative impact on 00:35:24.760 --> 00:35:27.300 diabetes care by allowing patients to check glucose 00:35:27.300 --> 00:35:30.059 levels just by scanning a small sensor on their 00:35:30.059 --> 00:35:32.780 arm with a phone or a reader. This brings us 00:35:32.780 --> 00:35:35.320 to the introduction of lingo in January 2022. 00:35:35.820 --> 00:35:38.679 This feels like the critical link between medical 00:35:38.679 --> 00:35:42.079 necessity and consumer optimization. What is 00:35:42.079 --> 00:35:44.739 lingo, and why is it important for Abbott's future? 00:35:45.360 --> 00:35:48.099 Lingo is a line of consumer bio -wearable sensors 00:35:48.099 --> 00:35:50.900 that utilizes the core technology developed for 00:35:50.900 --> 00:35:54.239 the Libra CGMs. It's designed to move beyond 00:35:54.239 --> 00:35:56.800 traditional medical monitoring and allow everyday 00:35:56.800 --> 00:35:59.840 individuals, not just diabetics, to collect continuous 00:35:59.840 --> 00:36:02.219 biological readings to optimize their exercise 00:36:02.219 --> 00:36:04.659 and nutrition regimens. So it's the Libra platform 00:36:04.659 --> 00:36:07.440 repurposed for the general wellness market. Exactly. 00:36:07.760 --> 00:36:09.739 Capitalizing on the increasing consumer demand 00:36:09.739 --> 00:36:12.659 for personalized health data. So if I'm an elite 00:36:12.659 --> 00:36:14.699 runner or just trying to manage my weight better, 00:36:14.829 --> 00:36:17.309 I can use the same type of high -fidelity sensor 00:36:17.309 --> 00:36:19.650 technology previously reserved for complex medical 00:36:19.650 --> 00:36:22.449 conditions. It's about datifying wellness. And 00:36:22.449 --> 00:36:25.530 creating a recurring revenue stream outside of 00:36:25.530 --> 00:36:27.889 the traditional insurance and regulatory framework. 00:36:28.190 --> 00:36:30.769 It's a huge strategic pivot that other companies 00:36:30.769 --> 00:36:33.010 are racing to match. They're also continuously 00:36:33.010 --> 00:36:35.829 improving their core medical devices. We mentioned 00:36:35.829 --> 00:36:38.579 the advancements in neuromodulation. Yes, the 00:36:38.579 --> 00:36:41.239 Proclaim Plus spinal cord stimulation system, 00:36:41.340 --> 00:36:45.079 which received FDA approval in August 2022, is 00:36:45.079 --> 00:36:47.780 another example of incremental patient -focused 00:36:47.780 --> 00:36:50.500 innovation. It's notable because it can target 00:36:50.500 --> 00:36:52.920 six independent pain sites within the patient's 00:36:52.920 --> 00:36:55.139 body with a single device, offering much more 00:36:55.139 --> 00:36:57.940 precise pain relief. And coupled with that 10 00:36:57.940 --> 00:37:00.719 -year battery life we discussed, these advancements 00:37:00.719 --> 00:37:03.619 offer real, tangible, quality -of -life benefits 00:37:03.619 --> 00:37:06.019 for chronic pain sufferers. They do. And showing 00:37:06.019 --> 00:37:08.380 their continued agility in diagnostics, in October 00:37:08.380 --> 00:37:12.139 2022, they received the first FDA emergency authorization 00:37:12.139 --> 00:37:15.260 for commercial monkeypox testing with their Alinity 00:37:15.260 --> 00:37:18.059 MMPXV test. Once again proving their ability 00:37:18.059 --> 00:37:20.599 to rapidly pivot their lab systems to address 00:37:20.599 --> 00:37:23.389 new emerging health threats. And it's important 00:37:23.389 --> 00:37:25.590 to maintain the corporate context around these 00:37:25.590 --> 00:37:27.789 innovations, especially since we spent so much 00:37:27.789 --> 00:37:30.750 time on controversies. Abbott has achieved high 00:37:30.750 --> 00:37:32.869 -level corporate recognition for its stability 00:37:32.869 --> 00:37:35.489 and operational excellence. They are consistently 00:37:35.489 --> 00:37:38.510 ranked on the Fortune 500 and Global 2000 lists 00:37:38.510 --> 00:37:41.429 and have been included on the Dow Jones Sustainability 00:37:41.429 --> 00:37:44.530 Index for 18 consecutive years. And that speaks 00:37:44.530 --> 00:37:47.070 to their scale and perceived stability in the 00:37:47.070 --> 00:37:49.630 financial world. But that stability was tested 00:37:49.630 --> 00:37:53.050 by global geopolitical events. We noted that 00:37:53.050 --> 00:37:55.929 following the 2022 invasion of Ukraine, Abbott 00:37:55.929 --> 00:37:58.449 continued business operations in Russia, though 00:37:58.449 --> 00:38:00.849 they did suspend non -essential activities like 00:38:00.849 --> 00:38:03.469 new investments and advertising. And research 00:38:03.469 --> 00:38:05.690 evaluating corporate responses placed them in 00:38:05.690 --> 00:38:08.530 the buying time category. With a grade D rating 00:38:08.530 --> 00:38:11.010 from the Yale School of Management, this rating 00:38:11.010 --> 00:38:13.010 reflects the decision to maintain a substantive 00:38:13.010 --> 00:38:15.590 business presence, including operations that 00:38:15.590 --> 00:38:18.489 impact pharmaceutical availability while postponing 00:38:18.489 --> 00:38:21.030 future capital commitments. It's a difficult 00:38:21.030 --> 00:38:23.250 position that balances global health needs with 00:38:23.250 --> 00:38:25.789 geopolitical concerns, and they chose to maintain 00:38:25.789 --> 00:38:28.570 their existing framework. And for a final context 00:38:28.570 --> 00:38:31.630 point, they are a massive international brand 00:38:31.630 --> 00:38:34.869 recognized far beyond medicine. They hold the 00:38:34.869 --> 00:38:36.710 title sponsorship of the world marathon majors 00:38:36.710 --> 00:38:40.130 since 2015. Ensuring their brand name is seen 00:38:40.130 --> 00:38:42.590 by millions of consumers focused on health and 00:38:42.590 --> 00:38:46.170 fitness every single year. So if we synthesize 00:38:46.170 --> 00:38:49.349 all of this information, we see a clear and really 00:38:49.349 --> 00:38:52.420 complex picture. Abbott Laboratories maintains 00:38:52.420 --> 00:38:56.280 its status as a diversified global giant by balancing 00:38:56.280 --> 00:38:59.000 the scale of necessity, the stable revenue from 00:38:59.000 --> 00:39:01.539 nutrition and established pharmaceuticals with 00:39:01.539 --> 00:39:04.659 the high tech, rapid innovation sectors of diagnostics 00:39:04.659 --> 00:39:06.840 and medical devices. And what's truly remarkable 00:39:06.840 --> 00:39:09.099 is the dynamic tension that exists within this 00:39:09.099 --> 00:39:11.739 corporation. They can simultaneously be responsible 00:39:11.739 --> 00:39:14.559 for essential childhood nutrition and face a 00:39:14.559 --> 00:39:16.659 half billion dollar jury verdict for alleged 00:39:16.659 --> 00:39:20.199 harm caused by their formula. All while pioneering. 00:39:20.230 --> 00:39:22.289 the next generation of continuous glucose monitoring 00:39:22.289 --> 00:39:24.869 and minimally invasive heart technology. It's 00:39:24.869 --> 00:39:26.889 the complexity and the inherent contradictions 00:39:26.889 --> 00:39:29.849 of a $40 billion healthcare company that you, 00:39:29.929 --> 00:39:32.659 the learner, really need to grasp. This isn't 00:39:32.659 --> 00:39:35.179 a single product company or even a single industry 00:39:35.179 --> 00:39:38.340 player. It's an ecosystem of highly specialized 00:39:38.340 --> 00:39:41.960 businesses unified under the Abbott name, constantly 00:39:41.960 --> 00:39:44.619 shifting its strategic weight, moving away from 00:39:44.619 --> 00:39:47.239 pharmaceutical patent risk and aggressively into 00:39:47.239 --> 00:39:50.219 medical hardware and sensing technology. So what 00:39:50.219 --> 00:39:52.119 does this all mean for the future of health? 00:39:52.440 --> 00:39:55.559 We saw that Abbott's continuous glucose monitors 00:39:55.559 --> 00:39:58.320 paved the way for consumer bio -wearables like 00:39:58.320 --> 00:40:01.679 Lingo. That technology is about collecting personalized 00:40:01.679 --> 00:40:04.559 high -frequency data outside the clinical setting. 00:40:05.160 --> 00:40:07.320 transforming health from something that happens 00:40:07.320 --> 00:40:09.860 at the doctor's office to something that is managed 00:40:09.860 --> 00:40:12.659 minute by minute on your smartphone. Right. And 00:40:12.659 --> 00:40:14.940 given this rapid advancement in personalized 00:40:14.940 --> 00:40:18.079 diagnostic sensors and the company's clear $21 00:40:18.079 --> 00:40:20.579 billion move into cancer screening with exact 00:40:20.579 --> 00:40:22.960 sciences, the provocative thought we want to 00:40:22.960 --> 00:40:25.300 leave you with is this. How will the proliferation 00:40:25.300 --> 00:40:27.420 of these personalized diagnostic sensors, the 00:40:27.420 --> 00:40:29.880 ability to continuously monitor your body's chemistry, 00:40:29.940 --> 00:40:32.460 not just your steps, fundamentally change how 00:40:32.460 --> 00:40:35.099 we define and manage our own health? in the next 00:40:35.099 --> 00:40:38.320 five years. Will we move definitively from episodic 00:40:38.320 --> 00:40:40.659 reactive medical care to a state of continuous 00:40:40.659 --> 00:40:43.260 consumer -managed optimized health monitoring? 00:40:43.519 --> 00:40:45.579 Something to chew on as you consider the future 00:40:45.579 --> 00:40:45.980 of healthcare.