Abbott strong as it prepares for spin-out
pharmafile | January 26, 2012 | News story | Sales and Marketing |Â Â Abbott, GAAP, HumiraÂ
Abbott enjoyed a strong 2011 thanks to Humira and emerging market growth, with overall worldwide sales rising by 4.1 per cent.
Sales of its anti-inflammatory blockbuster Humira rose 21% over the year to $7.93 billion, including growth of nearly 16% in the final quarter.
Diluted earnings per share, excluding specified items, were $1.45, at the high end of Abbott’s previous guidance range, reflecting 11.5% growth. Diluted earnings per share under Generally Accepted Accounting Principles (GAAP) were $1.02, including specified items.
Worldwide sales increased 4.1% to $10.4 billion, including a favourable 0.2% effect of foreign exchange. Emerging markets sales were $2.5 billion, representing nearly 25% of total sales, with particularly strong growth in Nutritionals, Vascular and Diagnostics.
“Despite another challenging year for the global economy, Abbott again delivered leading performance, including strong sales and ongoing earnings-per-share growth,” said Miles White, chairman and chief executive, Abbott.
“2011 was a significant year for Abbott, with the announced plan to separate into two leading healthcare companies in research-based pharmaceuticals and diversified medical products, each offering shareholders distinct identities with unique investment opportunities. We remain on track to complete the separation by the end of 2012.”
The diversified medical products company will consist of Abbott’s branded generic pharmaceutical, devices, diagnostic and nutritional businesses, and will retain the Abbott name. The research-based pharmaceutical company will include Abbott’s current portfolio of proprietary pharmaceuticals and biologics and will operate under a new name.
The transaction will take the form of a tax-free distribution to Abbott shareholders of a new publicly traded stock for the new pharmaceutical company. The expected stock distribution ratio will be determined at a future date. It is expected that the two companies will each pay a dividend that, when combined, will equal the current Abbott dividend at the time of separation.
The separation process is being led by a dedicated team, and Abbott says the separation will be complete by the end of 2012.
The move has already provoked speculation that Abbott’s pharma division will be a candidate for merger and acquisition with another major pharma company, but investors will have to wait until the spin-out is completed before any more definite signs emerge.
Andrew McConaghie
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