Abbott Labs's decision to separate into two distinct companies will create a research-based pharma and biologics operation with $18 billion in revenue, a lineup of marketed drugs led by Humira and a big pipeline that includes more than 20 drugs in mid- to late-stage development. The move highlights an active role that Abbott ($ABT) has created for itself as an M&A partner and investor in the biotech scene, with a small but significant amount of licensing activity underway.
As of yet unnamed, the R&D side of the split will focus heavily on an ambitious slate of programs for immunology, chronic kidney disease, Hepatitis C, women's health, oncology and neuroscience, including multiple sclerosis, Parkinson's and Alzheimer's diseases.
The separation also vaults Richard A. Gonzalez, currently executive vice president, global pharmaceuticals, into the spotlight. Gonzalez is slated to become chairman and CEO of the research-based business. Gonzalez is a 30-year Abbott veteran and had previously been president and chief operating officer of the company.
In recent years Abbott's venture arm has been a key player in a group of startups in Europe as well as in the U.S. Just a couple of weeks ago the company found itself playing the lead role in a $20 million round for Creabilis, a Luxembourg-based developer focused on pain, inflammation and dermatology. And it's spent billions buying Solvay and Piramal to establish a place for itself in emerging markets. But while it has a special deals team focused on licensing and M&A for pharmaceuticals, a recent profile by The Deal notes that Abbott only inked a couple of licensing pacts so far this year.
One of those deals was with Biotest AG for an antibody in the rheumatoid arthritis space while a separate antibody pact with Seattle Genetics is for cancer.
At Forbes, Matthew Herper's takeaway is that Abbott's decision to spin off the pharma side of the business reflects the growing problem Big Pharma companies have with Wall Street's views about the durability of a blockbuster drug franchise. Abbott has felt that as analysts highlighted the development programs underway that could deliver new drugs designed to compete with Humira, carving out some of the billions it earns every year.
- read the Abbott release
- here's the Forbes column
Special Report: Abbott - Top 15 R&D Budgets