Abbott to split into two public cos. — medical devices and pharmaceuticals
ABBOTT PARK, Ill. — Abbott on Wednesday morning announced plans to separate into two publicly traded companies, one in diversified medical products and the other in research-based pharmaceuticals.
"Today's news is a significant event for Abbott, and reflects another dynamic change in our company's 123-year history, strengthening our outlook for strong and sustainable growth and shareholder returns," Abbott chairman and CEO Miles White said.
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 diversified medical products company has approximately $22 billion in annual revenue today and a durable mix of products balanced across four major businesses. Abbott will continue to target double-digit ongoing earnings-per-share growth, with opportunities for geographic expansion, particularly in high-growth emerging markets, the company stated.
The research-based pharmaceutical company will include Abbott's current portfolio of proprietary pharmaceuticals and biologics and will be named later. The company has nearly $18 billion in annual revenue today and will have a sustainable portfolio of market-leading brands, including Humira (adalimumab), Lupron (leuprolide acetate injection), Synagis (palivizumab), Kaletra (lopinavir/ritonavir), Creon (pancrelipase) and Synthroid (levothyroxine). A pipeline of innovative research and development assets in important specialty therapeutic areas, such as Hepatitis C, immunology, chronic kidney disease, women's health, oncology and neuroscience will help drive future growth, the company stated.
White will remain chairman and CEO of Abbott, the diversified medical products company. Richard Gonzalez, currently EVP global pharmaceuticals, will become chairman and CEO of the research-based pharmaceutical company. Gonzalez is a more than 30-year Abbott veteran and was previously president and COO of Abbott.
The transaction is intended to take the form of a tax-free distribution to Abbott shareholders of a new publicly traded stock for the new pharmaceutical company. The transaction is expected to be completed by the end of next year, but is subject to final approval by the Abbott board of directors, receipt of a favorable ruling from the Internal Revenue Service on the tax-free nature of the transaction, and the effectiveness of a Form 10 registration statement that will be filed with the Securities and Exchange Commission that will include information about the distribution and related matters. Abbott expects to incur one-time charges related to the transaction during the periods preceding the separation, to be quantified at a later date.