Thursday, October 20, 2011

Abbott Spinoff May Fetch $54 Billion as Humira Tempts Rivals - Businessweek

Oct. 20 (Bloomberg) -- The breakup of Abbott Laboratories into two companies will create a prescription-medicine spinoff that may become a $54 billion target for drugmakers looking to rejuvenate their flagging portfolios.

The Abbott Park, Illinois-based company said yesterday it will split next year, with one company selling medical products and the other prescription medicines. Powered by Humira, an anti-inflammatory with $6.5 billion in annual sales, the new drugmaker may attract bids from Merck & Co., Roche Holding AG or Bayer AG, said Jeffrey Holford, a Jefferies Group Inc. analyst.

At a time when many companies face declining sales as patents end on top-selling products, Humira won’t face generic rivals until at least 2017. Abbott also has experimental drugs for kidney disease, hepatitis C and multiple sclerosis nearing the market, though none will likely match Humira’s sales.

The drug spinoff “is likely to be an attractive target,” said the London-based Holford in a telephone interview. “This will be a fairly clean, stand-alone unit, the type that gets picked up.”

The breakup will create a pharmaceutical business with revenue worth about $18 billion this year, led by Humira and the AIDS drug Kaletra, Abbott said in a statement. The second company, which would keep the Abbott name, will sell heart stents, infant formulas, generic drugs and other products expected to bring in $22 billion this year.

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