Abbott

The company is to be split into two separate entities in 2012

Abbott has risen rapidly in the pharma rankings in recent years, driven onwards by the runaway success of its anti-inflammatory blockbuster Humira and fast-growing sales of stents for heart patients.

The US company’s operations have been based around three divisions – pharmaceuticals, nutritional products and medical products, which include diagnostics and medical devices.

But in November 2011, Abbott’s management announced the decision to split the company into two separate entities in order to give shareholders a ‘distinct investment opportunity’.

The pharma company will be divided into two publicly traded firms: the first will focus on medical products and the other on research-based medicines.

The diversified medical products company will consist of Abbott’s existing diversified medical products portfolio, including its branded generic pharmaceuticals, devices, diagnostic and nutritional businesses, and will retain the ‘Abbott’ name.

The research-based pharmaceutical company will include Abbott’s current portfolio of pharmaceuticals and biologics and will be given a separate name at a later date.

The transaction is expected to be completed by the end of 2012, but is subject to final approval by the Abbott board of directors and other legal proceedings.

Abbott expects to incur one-time charges related to the transaction during the periods preceding the separation, to be quantified at a later date.

Both areas have produced strong revenue for Abbott, with its research pharmaceutical business generating about $18 billion in annual revenue, while the medical products area made $22 billion, according to a 2011 report by the US firm.

Miles White will remain chairman and chief executive of Abbott, the diversified medical products company.

Richard Gonzalez, currently executive VP of global pharmaceuticals, will become chairman and chief executive of the as-yet unnamed research-based pharmaceutical company.

Gonzalez said: “The research-based pharmaceutical company will be a leader in its industry with a strong and sustainable portfolio of specialty medicines and a promising pipeline of future products.

“This business has been delivering market-leading performance and is well positioned for future success.”

The company said it expects the companies will each pay a dividend that, combined, will equal the current Abbott dividend at the time of separation.

Humira, which is licensed to treat a number of autoimmune diseases, is Abbott’s best-selling drug, with sales of $6.5 billion in 2010, representing a third of the research based pharma unit’s sales.

The company has also recently been granted FDA approval for its ALK gene test to be used alongside Pfizer’s new non-small cell lung cancer drug Xalkori (crizotinib), which is forecast to make blockbuster sales.

Abbott launched its TNF-a blocker drug Humira (adalimumab) in 2002, and the drug has been the company’s greatest engine of growth ever since.

Despite being third to market behind Amgen/Pfizer’s Enbrel and J&J’s Remicade, Humira is now one of the industry’s biggest products.

In 2009, sales of the drug grew 21%, bringing revenues to $5.48 billion.

Abbott now claims Humira has a market-leading position in many international markets, including the number one share position in Western Europe.

The company also has a significant stake in the lucrative lipid management market, based on its niacin-based products, including TriCor/Trilipix and Niaspan.

In September 2009, the company bought Solvay Pharmaceuticals. The Belgium-based company adds more than $3 billion in annual sales to Abbott’s revenues, mostly outside the US and with significant presence in emerging markets.

Facts & Figures

Chairman and Chief Executive: Miles D. White

Corporate Headquarters: North suburban Chicago, Illinois, USA

Pharmaceutical Research Centres:

Abbott Park and North Chicago, Illinois, USA
Parsippany, New Jersey, USA
Worcester, Massachusetts, USA
Ludwigshafen, Germany

View Abbott's pipeline here.  Please note the company's disclosure of pipeline details is limited.