abbott acquisitions.docx

Abbott laboratories, Inc. - Mergers and Acquisitions

1. EXECUTIVE SUMMARY

Abbott Laboratories is classified in the brand pharmaceutical industry, a highly competitive

industry in which the firms rely on research and development to create innovative drugs.

Over the last century, Abbott has developed into a diversified medical products company,

developing, producing and marketing a range of products that are used in prevention,

diagnosis, treatment, and care. The company has two major product groups; the first,

diversified medical products include diagnostics, nutritional products, established

pharmaceuticals, and medical devices. The second, research-based pharmaceuticals, has been

the core line of business for Abbott and spurred most of their growth.

Term paper I am going to study is on the topic, Mergers & Acquisitions of Abbott

laboratories . I will be analyzing about the mergers & acquisitions. I will also analyze what

were the strategic actions Abbott have taken , acquisitions highlight, scope, reasons for

acquisitions and how this has been helped in their market share growth and expansion.

2. INTRODUCTION TO THE INDUSTRY

GLOBAL PHARMACEUTICAL INDUSTRY

HISTORY

The roots of the pharmaceutical industry lie back with the apothecaries and pharmacies that

offered traditional remedies as far back as the middle ages, but the industry as we understand

it today really has its origins in the second half of the 19th century. Whilst the scientific

revolution of the 17th century had spread ideas of rationalism and experimentation, and the

industrial revolution had transformed the production of goods in the late 18th century, the

marrying of the two concepts for the benefit of human health was a comparatively late

development.

Merck in Germany was possibly the earliest company to move in this direction. Originating

as a pharmacy founded in Darmstadt in 1668, it was in 1827 that Heinrich Emanuel Merck

began the transition towards an industrial and scientific concern, by manufacturing and

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selling alkaloids. Similarly, whilst GlaxoSmithKline’s origins can be traced back as far as

1715, it was only in the middle of the 19th century that Beecham became involved in the

industrial production of medicine, producing patented medicine from 1842, and the world’s

first factory for producing only medicines in 1859.

Meanwhile, in the USA, Pfizer was founded in 1849, by two German immigrants, initially as

a fine chemicals business. They expanded rapidly during the American civil war as demand

for painkillers and antiseptics rocketed. Whilst Pfizer was providing the medicines needed for

the Union war effort, a young cavalry commander named Colonel Eli Lilly was serving in

their army. A trained pharmaceutical chemist, Lilly was an archetype of the dynamic and

multi-talented 19th century American industrialist, who after his military career, and trying

his hand at farming, set up a pharmaceutical business in 1876. He was a pioneer of new

methods in the industry, being one of the first to focus on R&D as well as manufacturing.

Another military man in the drugs business was Edward Robinson Squibb, who as a naval

doctor during the Mexican-American war of 1846–1848 threw the drugs he was supplied

with overboard due to their low quality. He set up a laboratory in 1858, like Pfizer supplying

Union armies in the civil war, and laying the basis for today’s BMS.

Switzerland also rapidly developed a home-grown pharmaceutical industry in the second half

of the 19th century. Previously a centre of the trade in textiles and dyes, Swiss manufacturers

gradually began to realise their dyestuffs had antiseptic and other properties and began to

market them as pharmaceuticals, in contrast to the origin in pharmacies of other enterprises.

Switzerland’s total lack of patent laws led to it being accused of being a “pirate state” in the

German Reichstag. Sandoz, CIBA-Geigy, Roche and the Basel hub of the pharmaceutical

industry all have their roots in this boom.

It wasn’t just Swiss companies had their roots in the dye trade. Bayer was founded in 1863 as

a dye making company in Wuppertal, the hometown of Karl Marx’s collaborator Friedrich

Engels. It later moved into medicines, commercialising aspirin around the turn of the 20th

century, one of the most successful pharmaceuticals ever at that point.

The unregulated nature of the trade in medicines during this period ensured there was a far

less strict delineation between “pharmaceutical” and “chemical” industries than we have

nowadays. These companies focused as much on cod liver oil, toothpaste, citric acid for soft

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drinks, and hair gel as on prescription medicines, as well as selling products like heroin on

the over-the-counter market.

The national rivalries and conflicts that characterised this period also had their impact on the

developing industry; Bayer had the aspirin trademark and its US assets seized during World

War One, whilst “American” Merck (now Merck & Co. in the US or Merck Sharp & Dohme

[MSD] elsewhere) was compulsorily split off from its Germany parent company (Merck

KGaA) at the same time. Bayer also had its Russian subsidiary seized during the Russian

revolution. This disruption to Germany’s position as the leader in pharmaceuticals in the

early 20th century by the war meant that others, particularly in the US, could take relative

advantage. The beginnings of the globalisation of the industry were seen both before and

after the war – in the UK, import duties incentivised many foreign companies such as Wyeth,

Sandoz, CIBA, Eli Lilly and MSD to set up subsidiaries in Britain in the post-war years.

The interwar years also marked two breakthroughs that presaged the arrival of the pharma

industry as we know it today. The first was insulin; Frederick Banting and colleagues

managed to isolate insulin that could treat diabetes, up until that point a fatal condition. But it

was only in collaboration with the scientists at Eli Lilly that they were able to sufficiently

purify the extract and industrially produce and distribute it as an effective medicine.

The second was penicillin, a discovery of an impact possibly unparalleled by any other in

medicine. After Alexander Fleming’s initial discovery of the penicillium mould’s antibiotic

properties in 1928, and Howard Florey and Ernst Chain’s further experimentation, a

government-supported international collaboration including Merck, Pfizer and Squibb

worked on mass producing the drug during World War Two, saving thousands of soldiers’

lives. The immense scale and sophistication of the penicillin development effort marked a

new era for the way the pharmaceutical industry developed drugs. The war had also

encouraged research into everything from new analgesics to drugs against typhus, with a

great deal of collaboration between the companies and government.

After the war, the arrival of social healthcare systems such as the UK’s National Health

Service (NHS) in Europe created a much more structured system; both for prescription of

drugs and their reimbursement. In 1957, the NHS brought in what was essentially a price

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fixing scheme to allow reasonable return on investment for drug manufacturers, solidifying

the incentive to invest in new medicines. This greater role for the state in healthcare was

paralleled on both sides of the Atlantic in increasing government regulation of medicine

production. The Thalidomide scandal of 1961 prompted an increase in the regulation and

testing of drugs before licensing, with a new amendment to US Food and Drug

Administration (FDA) rules demanding proof of efficacy and accurate disclosure of side-

effects for new medications (the Kefauver Harris Amendment) being implemented in

1962. Likewise, the 1964 Declaration of Helsinki put greater ethical structures on clinical

research, clearly cementing the difference between production of scientific prescription

medicines and other chemicals.

Fordian methods enabled more rational methods of mass production, and increasing

understanding of biology and chemistry enabled drug candidates to be chosen systematically

rather than discovered serendipitously. This ‘golden age’ of drug development took place in

the broader landscape of the post-war boom; a general context of massive improvements in

standards of living and technological optimism that characterised the 40s to the early 70s, as

well as the science-boosting competition of the cold war. As the barriers to entry in drug

production were raised, a great deal of consolidation occurred in the industry. Likewise, the

processes of internationalisation begun before the war were continued – in 1951 alone Pfizer

opened subsidiaries in nine new countries.

The list of novel drugs from the post-war era speaks for itself. The contraceptive pill,

introduced in 1960, had an impact on society almost as massive as that of penicillin, enabling

women to effectively control their fertility and enabling sexual equality for the first time.

Valium (diazepam) was brought to the market by Roche in 1963, followed by the

introduction of the monoamine oxidase inhibitor (MAOI) class of anti-depressants and

antipsychotic haloperidol. These drugs ushered in a new era of psychiatric treatment, adding

effective biological treatments to the psychoanalytic ones that had previously characterised

psychiatry in this era. The 1970s provided a wave of cancer drugs, as part of the US

government’s “war on cancer”; a recent report from Cancer Report UK showed that survival

rates have doubled since the early 70s – due in large part to the massive innovation in

oncology medicines that has occurred since then. ACE inhibitors arrived in 1975, improving

cardiac health; and even drugs as ubiquitous as paracetamol and ibuprofen were developed in

1956 and 1969 respectively.

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As the 1970s drew to an end, a shift began in the way the pharma industry focused its

energies. In 1977, Tagamet, an ulcer medication, became the first ever “blockbuster” drug,

earning its manufacturers more than $1 billion a year and its creators the Nobel Prize. This

marked a new departure as companies competed to be the developer of the next big

blockbuster, and many achieved great success. Eli Lilly released the first selective serotonin

reuptake inhibitor (SSRI), Prozac, in 1987, once again revolutionising mental health practice.

The first statin was also approved in 1987, manufactured by Merck (MSD).

But whilst there were some breakthroughs, the enormous expense and risks involved in R&D

caused many to merely ape their competitors, trying to get a cut of market-share using “me

too” formulations rather than innovating novel medications. For example, AstraZeneca’s

popular proton pump inhibitor Nexium (esomeprazole), released in 2001, is merely a purified

single isomeric version of an older drug which happened to be losing patent protection.

Patents, or the lack of them, became a problem for the industry. The Hatch-Waxman Act of

1984 regularised generic production in the US, and some developing countries made policy

decisions to ignore medical patents. The industry’s focus increased on marketing to maintain

market share, on lobbying politicians to protect commercial interests, and on lawyers to

enforce legal claims on intellectual property rights. These activities have brought a greater

suspicion of the industry in the public at large. However, this can be linked to a wider anti-

science feeling and more pessimistic outlook on the possibilities of technology in society, as

seen in panics over issues such as genetically-modified crops and suspicion towards nuclear

power.

Companies have tried to overcome some of these problems by outsourcing various aspects of

their processes, and through buying up smaller companies that perhaps retain more of the

innovative entrepreneurialism of the pioneers of the 19th century. But new technologies are

what really promise a positive future for the industry in the 21st century. Both computing and

biotechnology have allowed great leaps forward in both development and production of new

drugs. Automation of the drug discovery process through high-throughput screening, and the

computerisation of genomics have allowed breakthroughs at a much higher rate than

previously. Starting with insulin in the 1970s, genetic modification has allowed production of

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human proteins by bacteria. And biological drugs such as the monoclonal antibodies,

introduced around the turn of the millennium, hint at a whole new panorama of far more

specific drugs that could impact on human health as much as the medicines of last century.

3. INTRODUCTION TO THE COMPANY

ABOUT ABBOTT

Dr. Wallace C. Abbott founded Abbott Laboratories in 1888 in northern Chicago. Over the

last century, Abbott has developed into a diversified medical products company, developing,

producing and marketing a range of products that are used in prevention, diagnosis,

treatment, and care. The company has two major product groups; the first, diversified medical

products include diagnostics, nutritional products, established pharmaceuticals, and medical

devices. The second, research-based pharmaceuticals, has been the core line of business for

Abbott and spurred most of their growth. Abbott currently employs over 60,000 people

worldwide and sells its products in 140 countries.

Abbott Laboratories is classified in the brand pharmaceutical industry, a highly competitive

industry in which the firms rely on research and development to create innovative drugs.

Through securing patents for these discovered drugs brand pharmaceuticals are able to

protect their drugs against replicas. In this industry patent protection lasts for twenty years,

but the long development process necessary to bring drugs to market makes their effective

lifespan a little over a decade. Once these patents expire generic pharmaceutical companies

can immediately begin duplicating the drug and offering it at a substantial discount,

undercutting the branded pharmaceuticals and eroding their sale volume and revenue.

Although research-based pharmaceuticals have been Abbott’s main line of business

throughout the past century, in recent years they have shifted more of their focus on to the

diversified medical product sector. The culmination of this shift came in October of 2011

when they announced the spinning off of their research-based pharmaceutical business and

the intention to keep the diversified medical products under the Abbott name. This shift

comes at a time when big pharmaceutical companies face an extremely murky landscape

going forward. Research and development costs for new drugs have skyrocketed in recent

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years and increased government regulation projected to shorten patent protection periods has

made it increasingly difficult for pharmaceutical companies to produce high enough revenues

to cover their costs of production. Griffin agrees with Abbott’s decision to shift their focus

away from branded pharmaceuticals towards other pillars of their business. They will,

however, need to focus on increasing their margins in these lines of business, especially as

they expand internationally in to high-growth emerging markets. Abbott has already begun

expanding overseas and 2011 saw 60% of Abbott’s net sales generated abroad. This trend

should continue with the bleak outlook for American pharmaceutical demand and the

increased demand, especially for branded generic products, in emerging market countries.

While they still operate both lines of business it is in Abbott’s best interest to develop

synergies between their product lines. Currently, although it is a diversified company, Abbott

operates its product lines fairly independently. If they instead restructured slightly to

incorporate aspects of each of their lines in their products they might be able to produce more

cutting edge, innovative products. An example of this is Xience, Abbott’s blockbuster drug-

eluting stent. This product was developed jointly between Abbott’s medical devices and

pharmaceutical branches. Abbott is one among few companies diversified and developed

enough to produce such a product, and as such as seen the stent become a best-selling product

with essentially no viable competitors. By creating more synergies within the branches of its

business Abbott can take advantage of economies of scope and create novel products that

carve out their own distinct niches in the marketplace. The final aspect Griffin believes

Abbott can pursue its further diversifying their product line through acquisitions of biotech

companies. Biotech products tend to be produced using microorganisms and DNA, making

them much more difficult to copy than traditional pharmaceutical compounds. This

complexity will allow Abbott to retain more market share of their products after the patent

expires, reducing their exposure to generic erosion, the main threat for all big pharmaceutical

companies. In this same vein, increasing focus on Abbott’s branded generics product line will

allow the company to retain some of that erosion, and perhaps get a leg up on other generic

manufacturers since they will already have the infrastructure and scientific knowledge in

place to produce the drugs efficiently.

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3.1. HISTORY

Abbott got its name and start from Dr. Wallace C. Abbott, a practicing physician and

pharmacy proprietor at his People’s Drug Store in Chicago. In 1898, Dr. Abbot began

producing tiny pills called dosimetric granules using alkaloid to improve his patients’

medications. Soon the demand for these granules grew beyond that of his patients and so

began the Abbott Alkaloidal Company in 1900. Abbott Laboratories had modest origins,

bringing in just $2000 its first year, but by 1910, Abbott had expanded into New York, San

Francisco, Seattle and Toronto with over 700 products in its catalog. Five years later, Abbott

Alkaloidal Company officially changed its name to Abbott Laboratories to reflect the

company’s new direction into research and synthetic compounds. The company went public

in 1929, and now Abbott has more than 120 facilities worldwide and has become a global

innovator in healthcare and new products. With a long, rich history, Abbott has been a major

player in innovation, health care expansion and development of new products since its

inception. During WWI, Abbott’s antiseptic agent Chlorazene helped soldiers clean wounds.

Seven years later, Abbott developed Butyn, a butyl alcohol-based anesthetic, which began

Abbott’s pioneering role in the development of anesthesia products. In 1930, Abbott

introduced Nembutal, used to treat seizures, preoperative sedation and insomnia; today, the

anesthetic is still one of Abbott’s best-known and widely-used products. In the early 1930s,

Abbott doctors Ernest H. Volwiler and Donalee L. Tabern created another anesthetic,

Pentothal, which is now on the World Health Organization’s “Essential Drug List”. The

invention of Pentothal began Abbott’s expansion into the I.V. segment. Fifty years after

Pentothal’s introduction, Volwiler and Tabern were inducted into the U.S. Inventors Hall of

Fame. Throughout the rest of the century, Abbott introduced groundbreaking products that

have led to them becoming a global leader in pharmaceutical, medical, and nutritional

products. Since Abbot’s inception, the company has grown and entered new segments

through acquisitions. In 1964, Abbott acquired Ross Laboratories, turning it into a wholly

owned subsidiary of Abbott and renaming it Abbott Nutrition in 2007. Since 2001, Abbott

has purchased Knoll, the pharmaceutical division of BASF; TheraSense, a diabetes care

company; the vascular device division of Guidant; and Advanced Medical Optics, giving

Abbott a Vision Eye Care division in 2009. All acquisitions served to improve Abbott’s

standing as a leader in global, broad-based health care and an innovator in new medicines,

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technologies and health management. The acquisition of the pharmaceutical arm of BASF

Knoll has proven especially beneficial to Abbott. BASF created and owned the drug Humira,

which treats rheumatoid arthritis, until the Abbott acquisition. Humira has proven to be a

highly profitable drug and has potential to add $10 billion in sales for 2012. In 2010,

acquisitions continued with the purchases of Solvay Pharmaceuticals, expanding Abbott’s

presence in emerging markets and enhancing its portfolio of pharmaceutical products;

STARLIMS, a LIMS company based in Hollywood and Florida for an all-cash transaction

valued at $123 million; and Facet Biotech Corporation, strengthening its oncology and

immunology divisions. Recently, Abbott acquired Piramal Healthcare Ltd’s Healthcare

Solutions unit for $3.72 billion to become India’s largest drug company. To refine Abbott’s

focus, it has also sold several subsidiaries. In 2002, Abbott sold the Selsun Blue, Clear Eyes

and Murine brands. These acquisitions and divestitures have helped position Abbott as a

leader in six targeted sectors: pharmaceutical products, nutritional products, diagnostic

instruments & tests, medical & surgical devices, animal health, and vision technologies.

3.2. HISTORY TIMELINE

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More than a century ago, 30-year-old Dr. Wallace C. Abbott, a practicing physician and drug

store proprietor, founded the Abbott Alkaloidal Company. Using the active - or alkaloid -

part of a medicinal plant, he formed tiny pills, called “dosimetric granules,” which provided a

more accurate and effective dosing for his patients than other treatments available at the time.

The demand for these accurate granules soon far exceeded the needs of his own practice and

from these modest origins was born Abbott, one of the world’s most broad-based health care

companies and a leader in the discovery, development and manufacture of products that span

the continuum of care.

Founding and Modern Science: 1888 - 1910

From the very beginning, Dr. Abbott and the company’s early founders championed

scientific investigation to benefit patients. With alkaloidal medicine, Abbott’s founders were

pioneers in the creation of the scientific practice of pharmacy, devising a new and better way

to deliver medicine granules to improve the quality of care for patients. Abbott was an early

innovator in physician education as well, supporting a sizable publishing operation.

188

8

Dr. Wallace C. Abbott, a practicing physician, begins manufacturing dosimetric granules. Dr.

Abbott is one of the founders of modern pharmacy.

189

4

Dr. Abbott acquires and becomes editor of The Alkaloidal Clinic.

190

0

The company is officially incorporated as the Abbott Alkaloidal Company.

190

6

To reach more physicians, Dr. Abbott establishes the company’s sales force.

191 Abbott establishes its first European agency in London and branches in New York, San

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0 Francisco, Seattle, Toronto and India.

Growth and Service: 1916 – 1938

After the first years of Abbott's success based primarily on alkaloidal medicines, Dr. Alfred

S. Burdick, a young medical professor and writer hired in 1904, convinced Dr. Abbott that

the future would take a different direction. With the world standing on the threshold of rapid

progress in chemistry, Abbott shifted its research focus from alkaloids to synthetic

(chemical) medicines, an area positioned for tremendous growth. In 1915, the name of the

company changed to reflect the commitment to new areas of research, beyond alkaloids. The

newly renamed Abbott Laboratories entered a period of growth characterized by war,

strategic acquisitions and constant scientific pursuit.

191

6

Abbott acquires its first synthetic medicine, an antiseptic agent called Chlorazene, which is

used extensively on the battlefields of World War I to clean wounds.

192

0

Dr. Abbott breaks ground for a new facility in North Chicago, Illinois. The site serves as the

company’s world headquarters for more than 40 years.

192

3

Abbott develops the synthetic drug Butyn, a local anesthetic, based on butyl alcohol. It marks

Abbott’s official entrance into the anesthesia market, and butyl alcohol becomes a keystone of

Abbott's scientific research in sleep-inducing agents.

192

9

Abbott stock is listed on the Chicago Stock Exchange with an offering of 20,000 shares at $32

each.

193

0

Nembutal, a sedative - hypnotic agent and one of Abbott's best-known and longest-lived

products, is introduced.

193

1

Combining an existing sales office and the Canadian operations of the recently acquired Swan

Meyer, Co., Abbott establishes its first international affiliate in Montreal, Canada.

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193

6

Abbott introduces Pentothal (thiopental sodium), which will be the most widely used induction

anesthetic in the world for more than 50 years. Abbott enters the I.V. business by supplying

hospitals with bulk intravenous solutions. This innovation lead to the introduction of two of

their scientist in the U.S. Inventors Hall of Fame.

193

8

Abbott celebrates its 50th anniversary with the dedication of its North Chicago Research Center.

Progress: 1939 – 1959

In the mid-twentieth century, Abbott rose to a new level scientifically, commercially and as

an employer. New programs to benefit employees were created. Research during and after

World War II yielded important new products in many therapeutic areas, including

antibiotics. Sales and marketing innovation led to great commercial growth, and new

operations around the world continued to open.

193

9

Health care benefits are extended to employees' dependents.

194

1

Discovered in Great Britain in 1928, penicillin had tremendous clinical value, but had yet to be

produced on a large scale. In 1941, Britain seeks help in starting large-scale production and

Abbott accepts the challenge. Within three months Abbott begins commercial production of

penicillin, one of the five pioneers in the United States.

194

2

Abbott introduces Halazone, a water purification tablet shipped by the millions to every

fighting front in World War II.

194

3

Abbott opens its first facility in Puerto Rico, later to become one of its largest manufacturing

operations.

194 Abbott introduces Tridione for treatment of epilepsy, Surbex, a high-potency vitamin,

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5 and Venopac, the first fully disposable intravenous administration set.

194

6

Abbott is the first pharmaceutical company to have a special laboratory for radioactive

pharmaceuticals, or "radiopharmaceuticals," a move that leads to the creation of what will

become the world’s leading immunodiagnostics business.

194

7

Abbott introduces Aminosol, a new protein solution for intravenous feeding of surgical

patients. Abbott develops the Abbott Sanitary Counting Tray.

194

9

Abbott introduces 74 new products in a single year, including pharmaceuticals, medical

devices, and improved variations of existing products.

195

0

Raymond E. Horn steps down as president because of illness. His successor is Dr. Ernest

Volwiler, the first president since Dr. Burdick with a scientific background. Abbott

introduces Sucaryl, its first truly consumer product, opens a registered entity in France, and

enters into business in Spain.

195

1

Abbott introduces Selsun Suspension shampoo for dandruff control. The company establishes

an employee contributory stock purchase plan.

195

2

Abbott introduces Erythrocin, a new antibiotic with good activity against gram-positive

bacteria.

195

3

Abbott's radiopharmaceutical business introduces Radiocaps, capsules containing an accurately

controlled, invisible and un-weighable film of radioiodine that simplifies the diagnosis and

treatment of thyroid disorders.

195

9

Abbott introduces a new logo, which features a stylized “a” symbol that is still in use today.

Expansion to Specialization: 1962 - 1988

The second half of the 20th century is one of continued growth. Abbott moved into a variety

of businesses, including several that it would exit, such as sweeteners, eye drops and golf

equipment. By the 1980s, several businesses were divested as Abbott began to narrow its

focus where its expertise best aligned with patient needs.

196 Abbott enters a joint venture with Dainippon Pharmaceuticals Co., Ltd., of Japan to

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2 manufacture radiopharmaceuticals. This venture will become Dainabot, and eventually evolve

into Abbott Japan, the company’s largest operation outside the United States.

196

3

The Triosorb diagnostic test kit, even simpler than the Radiocaps introduced ten years earlier,

no longer requires a patient to swallow a radioactive substance; rather, a blood sample is

inoculated with a radioactive form of thyroid hormone.

196

4

Abbott acquired M&R Dietetic Laboratories of Columbus, Ohio, best known as makers

of Similac infant formula, one of the first milk-based infant formulas. M&R eventually

becomes Abbott’s Ross Products Division.

196

5

Abbott’s growth warrants expansion at its headquarters location, and the company begins to

move some operations to Abbott Park, a 420-acre site southwest of its North Chicago

operations.

197

2

Abbott introduces Tranxene, a tranquilizer, Ausria, a radioimmunoassay test to detect serum

hepatitis, and the ABA-100 blood chemistry analyzer.

197

3

Abbott forms a diagnostics division to bring together all diagnostic products and services. The

company also introduces Ensure, the first adult medical nutritional.

197

7

TAP Pharmaceuticals, now known as TAP Pharmaceutical Products Inc., is formed as a joint

venture between Abbott and Takeda Chemical Industries, Ltd. of Japan.

198

1

Abbott introduces the TDx therapeutic drug monitoring system.

198

3

Depakote (divalproex sodium) is approved in the United States.

198

5

Abbott wins U.S. approval to market the world’s first diagnostic test for AIDS. Abbott also

launches ADD-Vantage, an intravenous drug delivery system, and TAP receives its first

product approval for Lupron (leuprolide acetate).

198

7

Hytrin (terazosin hydrochloride) receives U.S. FDA approval.

198

8

Abbott celebrates its centennial. The IMx diagnostic instrument, used in medium-sized

laboratories, is introduced and will become the world’s leading immunoassay system and one

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of the best-selling new products in Abbott’s history.

Specialization: 1990 – 1998

By the end of the twentieth century, Abbott further refined its focus, delivering both

scientific and financial results. New, more specialized products were introduced in many

divisions, some developed in-house and some brought from the outside. Abbott continued to

divest other products so that it could concentrate on what it has always done best: create

quality health care products for people in every stage of life.

199

0

Clarithromycin launched. Clarithromycin is known as Biaxin in the United States

and Klacid and Klaricid in countries around the world.

199

1

Several major products are introduced worldwide, including Survanta (beractant) and a

prostate-specific antigen (PSA) test to screen and monitor therapy for prostate cancer. Abbott

enters the hematology testing market with the acquisition of Sequoia-Turner Corp.

199

3

Abbott launches AxSYM, a new labor-saving diagnostic system.

199

4

Abbott introduces sevoflurane, and completes an agreement to cross-license LCR and PCR,

two gene amplification technologies.

199

5

TAP receives approval for PREVACID (lansoprazole). In diagnostics, ABBOTT PRISM, the

first, fully automated high-volume blood analyzer is introduced. Today, the ABBOTT PRISM is

used to screen the majority of the world’s donated blood supply.

199

6

Abbott launches Norvir (ritonavir). The company enters the glucose testing market with the

acquisition of MediSense, Inc.

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199

7

After extensive research, Abbott’s Ross Products Division launches an improved version

of Similac called Similac Advance.

199

8

Abbott launches Glucerna shakes and snack bars, specially formulated nutritional products for

people with diabetes. The U.S. FDA approves several major products

including TriCor (fenofibrate) and Zemplar (paricalcitol).

Transformation: 1990 - 2006

In recent years, Abbott has adapted to the rapidly changing and intensely competitive health

care environment of the twenty-first century. As we’ve added new businesses and

reorganized, we’ve kept our focus where it has always been – on the patient.

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9

Abbott launches ARCHITECT, a next-generation diagnostic system. Abbott acquires Perclose,

Inc., the leading arterial closure device manufacturer, which provides the foundation for

building its vascular business. Later that year, the FDA approves The Closer, a next generation

vascular closure device.

200

0

Abbott receives approval for several new drugs and line extensions,

including Kaletra (lopinavir/ritonavir), Biaxin XL (clarithromycin extended-release tablets),

and Depakote ER (divalproex extended-release tablets). Abbott introduces an innovative

award-winning, 32-ounce, reclosable plastic bottle for Similac with Iron.

200

1

Abbott acquires the pharmaceutical business of BASF AG, including the global operations of

Knoll Pharmaceuticals. In addition, Abbott acquires Vysis, Inc., and receives clearance to

market the Vysis UroVysion test to monitor for recurrent bladder cancer.

200

2

Abbott receives FDA approval for Humira (adalimumab). The company launches Similac

Advance, Isomil Advance and NeoSure Advance infant formulas in the United States. Abbott

acquires the cardiovascular stent business of Biocompatibles International plc., as it works to

build its vascular business.

200

3

Abbott launches HUMIRA in Europe. The company launches three new immunodiagnostics

systems for use on the ARCHITECTplatform. Abbott also continues to build its medical

products business through several strategic acquisitions: JOMED's coronary and peripheral

intervention business lines and Integrated Vascular Systems Inc.; Spinal Concepts Inc., an

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innovator of spinal implant devices; and ZonePerfect Nutritional Co., which signals Abbott's

entrance into the fast-growing healthy living category of the nutrition market.

200

4

Abbott acquires TheraSense Inc., a leading blood glucose monitoring business, to complement

its fast-growing diabetes care business. The company also enters the point of care diagnostics

market with the acquisition of i-STAT Corp.; adds to its healthy living nutrition offerings with

the acquisition of EAS Inc., and firmly establishes its presence in the spinal device market with

the acquisition of Spine Next S.A. Abbott also spins off its hospital products business as

Hospira, an independent, publicly traded company. Hospira is one of the largest global

specialty pharmaceutical and medication delivery companies serving the hospital.

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5

Abbott introduces several medical devices including the Xact carotid stent with the Emboshield

capture device; the FreeStyle Connect blood glucose monitor; and, in the United States,

launches the ABBOTT PRISM blood screening system and the CELL-DYN Sapphire

hematology system. The company also receives FDA approval for two new uses for HUMIRA.

Abbott also makes changes to its Kaletra product.

200

6

Abbott acquires Guidant's vascular business, which, combined with Abbott's ongoing business,

creates one of the leading global vascular device companies. Abbott acquires Kos

Pharamaceuticals, greatly expanding its presence in cardiovascular medicine including lipid

management.

January 2013

Abbott reached one of the most significant milestones in its celebrated history. Realizing that

addressing the world’s evolving healthcare challenges requires focused solutions, delivery

systems and approaches, Abbott separated into two independent companies: Abbott and

AbbVie.

4. PRODUCT OVERVIEW

4.1. Pharmaceutical product

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Abbott laboratories pharmaceutical products include a broad line of adult and pediatric

medicines which are manufactured marketed and sold worldwide. Most of these products are

only available through prescriptions or physicians recommendations. Generally,

pharmaceutical products are sold directly to wholesalers, government agencies, health care

facilities, speciality pharmacies and independent retailers.

Pharmaceutical products made up about 60% of total sales revenue for Abbott laboratories in

2012. Medicines the segment treat a wide range of problems including: HIV/AIDS,

rheumatoid arthritis, crohns disease, autoimmune disorders, migraines, epilepsy, bipolar

disorder, obesity, thyroid disorder, high cholesterol, hypertension, dyslipidemeia and all type

of cancers. Though a few key products drive sales in the pharmaceutical segment, Abbott

offers over 100 medicines in the pharmaceutical area.

Key Products:

Humira

Humira is used to reduce the signs and symptoms of moderate to severe

rheumatoid arthritis in adults. The drug is intended to prevent further damage to bones and to

help patients more easily perform daily activities. Humira can also be used to reduce signs

and symptoms of certain types of moderate to severe juvenilie arthritis in children over 4

years of age. In addition to treating rheumatoid arthritis, Humira also is used to reduce the

signs and symptoms of Crohn’s disease in adults who have not responded positively to

traditional treatments.

Kaletra

Kaletra is used for adults and children 2 years of age or older who are infected

with the HIV virus, the virus that causes AIDS. Kaletra works by inhibiting an enzyme that

the HIV virus needs to multiply. The drug is known as Aoluvia or Norvir in areas outside the

United States.

Synthroid

Synthroid has several different use, all stemming from problems with the thyroid

gland. It can be used to treat hypothyroidism, a condition where the thyroid glands does not

produce enough of a certain hormone. The drug can also help to decrease the size of an

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enlarged thyroid gland, a condition known as goitre. Finally, synthroid is effective in treating

thyroid cancer.

4.2 Nutritional Products

Abbott laboratories’ nutritional products include a broad line of adult and paediatric products,

which are manufactured, marketed, and sold worldwide. The company produces some of the

world’s most trusted names in adult, paediatric, and healthy living products. Nutritional

products are generally marketed and sold to institutions, wholesalers, retailers, health care

facilities, and government agencies.

Nutritional products are made up about 17% of total sales revenue for Abbott Laboratories in

2008. Total sales in the nutritional products segment were up 12.2% in 2008 compared to

2007. Products in the segment include several popular consumer brands. The company also

offers nutritional products and feeding devices to patients with special feeding needs due to

food allergies, injury, illness, respiratory conditions, and gastrointestinal impairment. Though

most sales in the nutritional products segment are driven by a few consumer brands, Abbott

offers 9 products in this segment.

Key Products:

Similac

Similac is an entire line solely dedicated to infant nutrition. 3 products

( regular, iron enchanced, and omega-3 / omega-6 enchanced) are available for infants ages 0-

6 months that are intended to replace or supplement regular breast feeding. 2 products

(regular and omega-3 / omega-6 enchanced) are available for infants ages 6-24 months. These

products are intended to promote continued growth as well as bridge nutritional gaps

common in making the nutrients infants need for growth and development. Products are

offered for infants with special needs such as lactose intolerance and multiple allergies, as

well.

Ensure

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Ensure is a nutritional drink intended for adults that offers complete, balanced

nutrition with essential vitamins and minerals that promotes improved overall health and

energy. Ensure is lactose-free and comes in many different variations including Ensure Plus,

Ensure high Protein, Ensure Fibre, and Ensure Pudding.

Glucerna

Glucerna is a nutritional line specially intended for individuals living with

diabetes. Glucerna has been clinically proven more consistent blood glucose levels rhan

standard medical nutritional drinks and snack bars. Glucerna is available in both nutrition

shakes and snack bars.

4.2. Diagnostic Products

Abbott Laboratories’ diagnostic products include a wide range of diagnostic instruments,

which are manufactured, marketed and sold worldwide. Diagnostic products include tests that

are used worldwide in hospitals, reference labs, and blood banks. Abbott intends for its

diagnostic products to provide health care professionals and patients with fast, convenient,

and accurate test results. Diagnostic products are generally marketed and sold to hospitals,

laboratories, clinics, and physicians’ offices.

Diagnostic products made up about 10% of total sales revenue for Abbott Laboratories in

2008. Total sales in the diagnostic product segment were up 13.2% in 2008 compared to

2007. Products in the segment include instruments that diagnose a range of serious health

issues including infectious diseases, cancer, diabetes, and genetic conditions. Though most

sales in the diagnostic products segment are driven by a few key products, Abbott offers 27

products in the segment.

Key Products:

ARCHITECT

ARCHITECT is a diagnostic instrument capable of testing for many different

health issues in the areas of drug abuse/toxicology, general chemistry, metabolic, specific

proteins, and therapeutic drug monitoring. In all, ARCHITECT can conduct over 85 specific

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tests. ARCHITECT is able to conduct about 1200 tests per hour, enough to meet most

laboratory testing needs.

m2000

m2000 is an instrument that automates the extraction, purification, and

preparation of DNA and RNA samples from patients. The instrument is also capable of

detecting and measuring infectious such as HIV and HPV. m2000 has multiple validity

checks to ensure improved accuracy.

4.3. Vascular Products

Abbott Laboratories’ vascular products include a broad line of coronary, endovascular, and

vessel closure devices, which are manufactured, marketed, and sold worldwide. Abbott’s

vascular products are known for their safety, effectiveness, and ease of use in treating

patients. The company is focusing on improving patient care by combining the latest medical

device innovations, world class pharmaceuticals, and research and development.

Vascular products do not currently make up a huge amount of Abbott Laboratories’ total

sales revenue (Around 7%). Total sales in the vascular products segment, however, have risen

dramatically in the past few years. Sales rose 32.8% in 2006, 54% in 2007, and 35% in 2008.

So far, in 2009, vascular products are accounting for nearly 10% of total sales revenue for

Abbott. Products in the segment include a wide range of devices used in the treatment of

patients with vascular disease. Though most sales in the vascular products segment are driven

by a few key products, Abbott offers 25 products in the segment.

Key Products:

Xience v

Xience v is Abbott Laboratories’ most recent, technologically advanced stent for

the treatment of coronary artery disease. The Xience v stent uses the proven technology of the

MINI VISION stent along with an effective drug coating that helps to open and prevent re-

narrowing of narrowed arteries. Though still a very young product, the Xience v stent has

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been billed as technologically superior to its competitors and is already seeing a huge

increase in its market share.

MINI VISION

MINI VISION is Abbott Laboratories’ first cobalt chromium stent for small

vessels. The device features thinner struts, which have been proven to lower vessel injury.

The alloy is also much stronger than stainless steel, which allows the MINI VISION to have

45% reduced metal volume as compared to its competitors.

StarClose

StarClose is a vascular closure system that features innovative design ideas in

the clip. The system is designed to promote the primary healing process to achieve a secure

close of femoral artery access sites following vascular procedures.

5. Abbotts’ Business and Growth Strategies

For fiscal year 2012, Abbott Laboratories focus on several key areas. First, the company

plans to continue leveraging its staple drug, Humira. Sales in the drug have increased from

$2.0 billion in 2010 to $4.5 billion in 2011, and Abbott forcasts sales of Humira to increase

25% in 2012. The increased revenue will stem from continued research and development as

well as selling support dedicated to maximizing the worldwide potential of the drug. In

addition, Abbott is studying two possible extra applications for the drug.

Abbott Laboratories also plans on maximizing its market share in new worldwide markets.

Over half of the company’s total sales revenue comes from international markets and much of

its recent growth has been due to increased international sales. International sales rose 23.9%

in 2011 and 24.1% in 2012. So far in 2011, international sales have only risen 0.7%, but this

is more of a reflection of a relatively stronger U.S. dollar. Net international sales increased

8.0% in the first six months of 2011, including a 10.5% increase in the second quarter. The

relatively stronger U.S. dollar has decreased international sales in 2011 by 13.0%. with this

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taken into account, Abbott expects to see steady continued increase in sales revenue from

international markets.

Abbott Laboratories also hopes to continue its growth in the vascular products segment.

Research is being performed on new devices in the segment, including a drug eluting stent

and a bio absorbable stent. After huge gains in 2009-2011, the vascular products segment has

been a 38.3% sales revenue increase in the first nine months of 2011.

In February 2009, Abbott Laboratories acquired the outstanding shares of Advanced Medical

Optics, Inc (AMO). AMO is a marketer of ophthalmic surgical technology and devices as

well as eye care solutions. AMO was acquired for approximately $1.4% billion, and was

financed through long-term debt. Abbott also acquired $1.5 billion in debt from the

transaction. Abbott acquired AMO in hopes of taking advantage of increasing demand for

vision care technologies due to population growth and demographic shifts.

Abbott Laboratories has recently engaged in acquiring several smaller health care services

companies. In October 2009, Visiogen Inc. was acquired for $400 million. Visiogen Inc.

specializes in eye care products for patients with cataracts. Also in October 2009, Abbott

bought Evalve, which specializes in non-surgical treatments for patients with heart disease.

Evalve was acquired for $410 million. Of perhaps more importance, in September 2009, an

agreement was reached to obtain Solvay’s pharmaceutical business. Solvay has the

capabilities to produce a vaccine for the recent outbreak of the swine influenza. The

agreement was for $6.6 billion and is expected to close in the first quarter of 2010. In 2010,

Abbott acquired Piramal health care.

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Source: www.abbott.com

6. ACQUISITIONS BY ABBOTT

India:

The Indian Pharmaceutical Market

India is one of the world's fastest-growing pharmaceutical markets, due in large part to

branded generics. The market will generate nearly $8 billion in pharmaceutical annual sales

this year, a number that is expected to more than double by 2015. Abbott estimates the

growth of its Indian pharmaceutical business with Piramal to approach 20 percent annually,

with expected sales of more than $2.5 billion by 2020.

Branded generics have significant brand equity in many international markets, providing

durable, sustainable franchises for future growth. Piramal markets the products in its

Healthcare Solutions business in India only and does not market traditional generic products.

Today, branded generics account for 25 percent of the global pharmaceutical market, have

the majority of market share in the largest emerging markets, and are expected to outpace

growth of patented and generic products.

The Mumbai-based Piramal Healthcare Solutions business has a comprehensive portfolio of

branded generics with annual sales expected to exceed $500 million next year in India, and

market-leading brands in multiple therapeutic areas, including antibiotics, respiratory,

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cardiovascular, pain and neuroscience. Piramal has a strong commercial presence, including

the largest sales force in India with a unique model that includes dedicated sales personnel in

rural areas inhabited by 70 percent of the population. The combined Abbott and Piramal sales

forces will be the industry's largest in India.

Piramal's Healthcare Solutions business will become part of Abbott's newly created, stand-

alone Established Products Division. Piramal's Healthcare Solutions business employs more

than 5,000 people in India. Abbott, has more than 2,500 employees across all of its

businesses in india.

6.1. Piramal healthcare Ltd:

About the Piramal Group:

The Piramal Group, led by Ajay G. Piramal is one of India's foremost business

conglomerates. Driven by the core values of Knowledge Action Care, the Piramal Group has

interests in a myriad of industries that encompass healthcare, drug discovery & research,

diagnostics, glass, real estate and financial services. The Piramal Group steadfastly pursues

inclusive growth while adhering to ethical and value driven practices. The Group's turnover

exceeded US $1 billion in FY2012.

Acquisition Highlights:

On September 8, 2010, Abbott acquired Piramal Healthcare Limited’s Healthcare Solutions

business, a leader in the Indian branded generics market, for $2.2 billion, in cash, plus

additional payments of $400 million annually in 2011, 2012, 2013 and 2014. Abbott recorded

a $1.6 billion liability for the present value of the additional payments at the acquisition date.

The acquisition was financed with cash. The allocation of the fair value of the acquisition

resulted in the recording of $2.7 billion of deductible acquired intangible assets and

$1.0 billion of deductible goodwill. Acquired intangible assets consist primarily of trade

names, customer relationships and associated rights and are amortized over an average of

19 years.

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Scope:

Strategic action will propel Abbott to No. 1 position with annual sales growth approaching

20 percent in India, expected to exceed $2.5 billion in sales by 2020. Piramal's

comprehensive portfolio of market-leading branded generics spans multiple therapeutic

areas ; combined sales force to become industry's largest in India, one of world's fastest-

growing markets, generating nearly $8 billion in pharma sales this year; expected to more

than double by 2015. And also Abbott's collaboration with Zydus Cadila as well as the

creation of a new stand-alone Established Products Division to focus on expanding the global

markets for its leading branded generics portfolio.

Reasons to buy:

This strategic action advance Abbott into the leading market position in India, one of the

world's most attractive and rapidly growing markets. Abbott's strong position in branded

generics and growing presence in emerging markets is part of their ongoing diversified

pharmaceutical strategy, complementing their market-leading proprietary pharmaceutical

offerings and pipeline in developed markets. Emerging markets represent more than 20

percent of Abbott's total business.

With this piramal’s acquisition, the combined health care solutions and Abbott business

became the clear market leader in India, with a market share of approximately 7%.

Abbott’s market share in India:

Abbot would be able to leverage the combined sales force of 7,000 and gain access to tier-3

towns where it was not present. The deal not only gives it 18-20 per cent volume growth but

also size. Says an analyst, With a 7 per cent market share (Abbot was languishing at 18, with

2.3 per cent market share and Solvay was at 35th position in the formulation sales pecking

order before the deal), a per cent gain in the Rs 40,000-crore Indian market will add Rs 400

crore to abbott’s top line. its leveraging potential is immense.

In addition to the formulation business, the US-based company will also be able to benefit

from the introduction of patented products in the country. Analysts say with the share of

patented products expected to increase from seven to nine per cent in 2015, the deal would

position Abbott to take advantage of both its core and new business. The new diversified

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business model of spreading its risk from cash-intensive, R&D-based, innovator drugs to the

robust cash flow-generating branded generics will help Abbott in the long terms.

Abbott is also utilising its presence in the country by outsourcing drug manufacturing and

marketing it though its centres worldwide. Recently, it entered into a licensing agreement

with Zydus Cadila to market 24 products in 15 emerging markets, with an option to add

another 40. Its India focus can also be gauged by the fact that the abbott had agreed to buy

Wockhardt’s nutrition business for Rs 620 crore before legal problems stalled this.

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Abbott's Established Products Strategy

Throughout the past decade, Abbott has built a leading portfolio of branded generics, through

its own products as well as those acquired with the 2001 acquisition of Knoll's

pharmaceutical business. In 2007, the company established a separate business unit within its

international pharmaceutical division dedicated to established products.

Additionally, a new geographic region focused on Russia, India and China was created,

which resulted in the doubling of Abbott's growth rate in those countries. Most recently, the

company acquired Solvay Pharmaceuticals, obtaining a diverse branded generics portfolio

and providing significant critical mass in key emerging markets.

As a result of these combined actions, Abbott is now among the leading multinational health

care companies in numerous emerging markets. Approximately 20 percent of Abbott's

pharmaceutical sales today are in emerging markets.

Abbott have assembled a market-leading branded generics portfolio tailored to the unique

needs of emerging markets, strongly positioning Abbott to meet the current and future

geographic and market dynamics in pharmaceuticals.

Pharmaceutical sales in emerging markets are expected to grow at three times the rate of

developed markets and account for 70 percent of pharmaceutical growth over the next several

years. This explosive growth is occurring as demographics, rising incomes, modernization of

health systems and an increase in the treatment of chronic disease create greater demand for

medicines.

Financial Highlights:

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Under terms of the agreement, Abbott purchased the assets of Piramal's Healthcare Solutions

business for a $2.12 billion up-front payment with payments of $400 million annually for the

next four years, beginning in 2011. The transaction will not impact Abbott's ongoing earnings

per share guidance in 2010. Abbott plans to fund the transaction with cash on the balance

sheet. This transaction is subject to shareholder approval of Piramal Healthcare Limited and

other customary closing conditions, and is expected to close in the second half of 2010. This

transaction is being conducted by a wholly-owned subsidiary of Abbott, resulting in full

ownership of the assets of Piramal's Healthcare Solutions business (Domestic Formulations).

6.2. Solvay:

About Solvay Pharmaceuticals

Solvay Pharmaceuticals is a research driven group of companies that constitutes the global

pharmaceutical business of the Solvay Group. These companies seek to fulfil carefully

selected, unmet medical needs in the therapeutic areas of neuroscience, cardiometabolic,

influenza vaccines, gastroenterology and men's and women's health. Its 2010 sales were EUR

2.7 billion, and it employs more than 9,000 people worldwide.

Acquisition by Abbott:

Highlights:

In February 2010, Abbott acquired Solvay’s pharmaceuticals business for EUR 4.5 billion

($6.6 billion) in cash, providing Abbott with a large and complementary portfolio of

pharmaceutical products and a significant presence in key global emerging markets. The

acquisition also includes full global rights to the fenofibrate franchise. Currently Abbott has

Solvay U.S. right to fenofibrate and pays royalties to Solvay.

Belgium-based Solvay pharmaceuticals will add more than $3 billion in annual sales, the

majority outside the U.S. Solvay has significant presence and infrastructure in key high-

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growth emerging markets, including Eastern Europe and Asia. Emerging markets are

growing faster and increasing in importance due to demographics, rising incomes and

expanded treatment of chronic disease.

The acquisition added approximately $500 million to Abbott’s annual pharmaceutical R&D

investment, providing Abbott with the opportunity to further accelerate near and long term

pharmaceutical growth.

Scope:

The acquisition of Solvay Pharmaceuticals further diversifies Abbott pharmaceutical

portfolio, expands their presence in key high-growth emerging markets, enhances their

investment in R&D and accelerates their long-term earnings-per-share growth outlook.

In anticipation of future market needs, Abbott ensures about the technologies, products,

infrastructure and reach to serve patients globally and continue to deliver sustainable

industry-leading growth. These acquisitions, as well as the others they have announced

contribute them to achieve their long-term goal.

With this transaction Solvay Pharmaceuticals has found a new strong home, within a

respected company with a solid and committed position in the industry.

Reasons to buy:

Solvay's pharmaceutical portfolio complements Abbott's presence and expertise in specialty

markets such as cardiovascular disease, neuroscience and gastroenterology. Solvay has

treatments for Parkinson's disease, Ménière's disease (abnormality of the inner ear), vertigo,

and irritable bowel syndrome. Solvay also offers products to treat men's and women's

hormonal health, and exocrine pancreatic insufficiency (inability to properly digest food),

which is associated with several underlying conditions including cystic fibrosis and chronic

pancreatitis.

The acquisition also includes Solvay's vaccines business, which will provide Abbott entry

into the expanding global vaccines market. Solvay has a small molecular diagnostics unit that

will become part of Abbott's diagnostics organization upon the transaction close.

Abbott's international pharmaceutical business has grown significantly over the past several

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years, driven by specialty products in developed markets. In emerging markets where chronic

disease is being treated more aggressively, the combined Abbott and Solvay portfolio of

branded generics expands the global reach of these medicines. Solvay's business will also

give us a platform to enter the attractive global vaccines market.

Financial Highlights

The transaction will be approximately $0.10 accretive to ongoing earnings per share in 2010,

accelerating to more than $0.20 by 2012, increasing thereafter, all before one-time

transaction-related items, which will be provided at a later date. These one-time transaction-

related items are expected to occur between 2010 and 2012. The transaction also includes

payments of up to EUR 300 million if certain sales milestones are met between 2011 and

2013.

Abbott plans to fund the transaction with cash currently on the balance sheet. This transaction

is subject to customary closing conditions and regulatory approvals and closed in the first

quarter of 2010. As a result, the deal will have no impact on 2009 ongoing earnings per share.

The board of directors of both companies have approved the proposed acquisition. Barclays

Capital served as an exclusive financial advisor to Abbott on this transaction.

6.3. STARLIMS

About STARLIMS

STARLIMS Technologies Ltd. (Nasdaq:LIMS) is a leading provider of laboratory

information management systems (LIMS), with over 20 years of LIMS experience. The

Company's flagship product, STARLIMS®, improves the reliability of laboratory sampling

processes, supports compliance with domestic and international regulations and industry

standards, and provides comprehensive reporting, monitoring and analysis capabilities.

STARLIMS software is used for quality assurance and control, testing and monitoring, and

research and development in government, manufacturing and life sciences organizations.

With operations in the United States, Canada, the United Kingdom, Israel and Hong Kong,

the company serves over 500 organizations in 40 countries.

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Highlights:

In March 2010, Abbott acquired STARLIMS Technologies for $123 million, in cash, net of

cash held by STARLIMS, providing Abbott with leading products and expertise to build its

position in laboratory informatics. A substantial portion of the fair value of the acquisition

has been allocated to goodwill and amortizable intangible assets.

Scope:

The acquisition provides Abbott with leading products and expertise to build its position in

laboratory informatics, an emerging and rapidly growing field focused on helping to manage

the increasing amount of data generated in laboratories. STARLIMS’s advanced web-based

software applications help laboratories efficiently store, retrieve and analyze data and are

designed for a wide variety of laboratory environments operating across a number of

scientific, industrial and clinical disciplines.

STARLIMS gives Abbott access to innovative technologies and technical expertise for a

long-term strategy in laboratory informatics. The acquisition enables Abbott to provide a

common informatics framework across all of their diagnostics businesses and equally

important, which helps to accelerate STARLIMS’s growth strategy in the non-diagnostics

market segments.

STARLIMS' advanced web-based technologies help Abbotts customers operate efficiently

across the core laboratory, molecular and point-of care segments of the global diagnostics

market.

Healthcare informatics is the application of information management and technology to the

planning and delivery of high quality and cost-effective healthcare. Advanced informatics

systems are becoming increasingly important to clinical laboratories as a means to automate

the retrieval, communication and management of medical and laboratory data and aid

compliance with global regulatory and industry standards. Informatics systems can help

laboratories improve operating efficiency through process standardization, reduced labour

costs and increased capacity. Improved laboratory operations benefit physicians and patients

through improved turnaround times and more consistent interpretation of test results.

Reasons to buy:

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As Abbott integrates STARLIMS into its existing portfolio of laboratory information

management products, the company continue to support and expand the non-clinical market

segments currently served by STARLIMS.

Under the terms of the agreement, Abbott acquired all outstanding equity of STARLIMS for

$14 per share, for a total purchase price of approximately $123 million.

6.4 Facet biotech:

About Facet biotech:

Facet Biotech is a biotechnology company dedicated to advancing its pipeline of five clinical-

stage products, leveraging its research and development capabilities to identify and develop

new oncology drugs and applying its proprietary next-generation protein engineering

technologies to potentially improve the clinical performance of protein therapeutics.

Highlights:

In April 2010, Abbott acquired the outstanding shares of Facet Biotech Corporation for

approximately $430 million, in cash, net of cash held by Facet. The acquisition enhances

Abbott’s early- and mid-stage pharmaceutical pipeline, including a biologic for multiple

sclerosis and compounds that complement Abbott’s oncology program. A substantial portion

of the fair value of the acquisition has been allocated to acquired in-process research and

development that is accounted for as an indefinite-lived intangible asset until regulatory

approval or discontinuation.

Scope:

The new Abbott compounds include daclizumab - a Phase II investigational biologic intended

to treat multiple sclerosis that is expected to move into Phase III development in the second

quarter 2010 - and oncology compounds in early- to mid-stage development that are being

studied to treat different types of cancer, including multiple myeloma and chronic

lymphocytic leukemia.

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Facet's depth of biologics experience and sophisticated antibody engineering platforms

complement Abbott's current R & D programs in oncology, immunology and other

therapeutic areas.

Short-form merger:

The final step in the acquisition process was a short-form merger of Amber Acquisition Inc.,

a wholly-owned subsidiary of Abbott, with and into Facet Biotech Corporation. As a result of

the merger, all outstanding shares of Facet common stock not tendered in the cash tender

offer (other than those as to which holders properly exercise dissenters' rights) were

converted into the right to receive $27 per share in cash, without interest and subject to any

required withholding taxes.

6.4 Advanced medical optics:

Scope:

In February 2009, Abbott acquired the outstanding shares of Advanced Medical Optics, Inc.

(AMO) for approximately $1.4 billion, in cash, net of cash held by AMO. Prior to the

acquisition, Abbott held a small investment in AMO. Abbott acquired AMO to take

advantage of increasing demand for vision care technologies due to population growth and

demographic shifts and AMO’s premier position in its field. Abbott acquired control of this

business on February 25, 2009 and the financial results of the acquired operations are

included in these financial statements beginning on that date. The allocation of the fair value

of the acquisition resulted in non-deductible goodwill of approximately $1.7 billion, non-

deductible definite-lived intangible assets of approximately $900 million and net tangible

assets of approximately $400 million. In addition, Abbott assumed $1.5 billion of debt.

Acquired intangible assets consist of established customer relationships, developed

technology and trade names and are amortized over 2 to 30 years (average of 15 years). In

addition, subsequent to the acquisition, Abbott repaid substantially all of the acquired debt of

AMO.

6.5 Visiogen:

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Scope:

In October 2009, Abbott acquired 100 percent of Visiogen, Inc. for $400 million, in cash,

providing Abbott with a next-generation accommodating intraocular lens (IOL) technology to

address presbyopia for cataract patients. The allocation of the fair value of the acquisition

resulted in non-deductible acquired in-process research and development of approximately

$200 million which is accounted for as an indefinite-lived intangible asset until regulatory

approval or discontinuation, non-deductible definite-lived intangible assets of approximately

$24 million and goodwill of approximately $200 million.

6.6 Evalve:

About Evalve, Inc. :

Founded in 1999 by The Foundry and Dr. Fred St. Goar, Evalve, Inc., headquartered in

Menlo Park, Calif., has developed a proprietary system which enables percutaneous repair of

cardiac valves. The company’s initial products are intended to reduce the risks, trauma and

costs associated with current open, arrested heart surgical options.

Previous major investors in Evalve include: New Enterprise Associates; Delphi Ventures;

Split Rock Partners; Apothecary Capital; Cutlass Capital; ABS Ventures / Kearny Venture

Partners; Saints Capital; Three Arch Partners; Emergent Medical Ventures; and Integral

Capital Partners.

Highlights:

In 2009 Abbott acquired the outstanding equity of Evalve, Inc., the global leader in the

development of devices for minimally invasive repair of cardiac mitral valves.The acquisition

provides Abbott with a presence in the growing area of non-surgical treatment for structural

heart disease, in which physicians use catheter-based devices to repair or replace basic

structural components of the heart such as mitral and aortic valves. The agreement includes

an upfront payment of $320 million in cash, plus an additional payment upon completion of

certain regulatory milestones, for a total of up to $410 million.

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Scope:

This acquisition of Evalve provided Abbott with leading technology in the emerging field of

minimally invasive heart valve repair and further broadens. Evalve is on the cutting edge with

its nonsurgical approach to treating structural heart disease. With this breakthrough mitral

valve repair technology, physicians were able to offer their patients a minimally invasive

alternative to open heart surgery -- not unlike the opportunity that stents provided more than

two decades ago for the treatment of coronary artery disease. Mitral regurgitation, a condition

that prevents the mitral valve from closing completely, is the most common type of heart

valve insufficiency in Europe and the United States, and affects millions of people

worldwide. Traditionally, mitral regurgitation is treated through open heart surgery.

However, only about 20 percent of the 600,000 patients diagnosed in the U.S. and Europe

each year undergo surgery. Evalve's minimally invasive catheter-based MitraClip® system,

used to clip the leaflets of the mitral valve together to reduce regurgitation, is the first

commercially available treatment option approved in Europe for non-surgical mitral valve

repair for patients suffering from the effects of mitral regurgitation. The MitraClip system is

an investigational device in the United States and is currently in clinical trials.

Reasons to buy:

By Combining Evalve’s first in class mitral valve repair technology with Abbott's global

presence, commercial infrastructure and manufacturing expertise help advance minimally

invasive treatment options for the millions of patients with mitral regurgitation. Evalve looks

forward by becoming a part of Abbott and working together to accelerate the business and

expand global reach to patients around the world with Evalves minimally invasive

technologies.

Under the terms of the agreement, Abbott acquired the remaining 90 percent of outstanding

equity of Evalve, Inc. that it does not already own for an upfront payment of $320 million,

plus a $90 million payment if certain regulatory milestones are met. The transaction does not

impact Abbott’s previously issued earnings-pershare guidance of 2011. The transaction is

subject to customary closing conditions, including antitrust clearances. Abbott closed the

transaction in the fourth quarter of 2011.

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6.7 Ibis Biosciences, Inc. (Ibis):

About Isis Pharmaceuticals, Inc.

Ibis biosciences, inc. is a subsidiary of Isis pharmaceuticals and it is exploiting its expertise in

RNA to discover and develop novel drugs for its product pipeline and for its partners. The

Company has successfully commercialized the world's first antisense drug and has 19 drugs

in development. Isis' drug development programs are focused on treating cardiovascular and

metabolic diseases. Isis' partners are developing antisense drugs invented by Isis to treat a

wide variety of diseases. Isis is a joint owner of Regulus Therapeutics LLC, a joint venture

focused on the discovery, development and commercialization of microRNA therapeutics. As

an innovator in RNA-based drug discovery and development, Isis is the owner or exclusive

licensee of over 1,600 issued patents worldwide.

Highlights:

In January 2009 Abbott to expand Abbott’s position in molecular diagnostics for infectious

disease purchased Ibis Biosciences, Inc., an Isis subsidiary, for a closing purchase price

of $175 million. In addition to the closing purchase price, Isis received earn out payments

from Abbott tied to post-closing sales of Ibis systems, including instruments and assay kits.

Scope:

Abbott is the ideal company to move the Ibis technology into larger commercial markets,

such as clinical diagnostics, where Ibis' technology can revolutionize infectious disease

detection.

This acquisition enabled Abbott to offer an innovative approach to the detection and

characterization of a broad array of pathogens for the management of infectious diseases.

Reasons to buy:

In 2008, Abbott has acquired 100 percent of the outstanding shares of Ibis. Abbott

invested $40 million in Ibis in exchange for approximately 18.6% of Ibis' outstanding equity.

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This investment, along with the $175 million paid at closing, resulted in a total acquisition

price of $215 million plus earn out payments. A substantial portion of the fair value of the

acquisition has been allocated to goodwill and amortizable intangible assets, and acquired in-

process research and development which are accounted for as an indefinite-lived intangible

asset until regulatory approval or discontinuation. The investment in Ibis in 2008 resulted in a

charge to acquired in-process research and development. In connection with the acquisition,

the carrying amount of this investment was re valued to fair value resulting in recording

$33 million of income, which is reported as other (income) expense, net.

7 CONCLUSION:

This analysis says that Abbott has a wide opportunity in emerging markets when compared to

developed markets and this has been achieved by its strategic actions of acquisitions were

major acquisitions of companies are of emerging markets. These acquisitions made them in

expanding their product- line. And also their research activities makes them step into various

divisions and to enhance their product quality, new products and also their place in market for

a long period.

8 REFERENCES:

http://www.abbott.ca/

http://articles.marketwatch.com

http://www.business-standard.com/article/companies/abbott-snaps-up-piramal-s-

formulations-biz

http://businesstoday.intoday.in/story/ajay-piramals-three-teams-for-business-opportunities

http://www.abbott.com/press-release/abbott-reports-fourthquarter-and-fullyear-2012-results.htm

http://www.abbott.ca/dotca/url/content/en

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http://www.abbott.ca/dotca/url/content/en



http://businesstoday.intoday.in/story/ajay-piramals-three-teams-for-business-opportunities

http://www.business-standard.com/article/companies/abbott-snaps-up-piramal-s-formulations-biz

http://www.business-standard.com/article/companies/abbott-snaps-up-piramal-s-formulations-biz

http://articles.marketwatch.com/

http://www.abbott.ca/

abbott acquisitions.docx

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