Abbott Laboratories - Organization

Organization

Abbott's core businesses focus on pharmaceuticals, medical devices and nutritional products, which have been supplemented through several notable acquisitions. The firm currently divides itself into several divisions:

• Animal Health: anesthesia for animals, Clinicare liquid animal diets and other veterinary products
• Diabetes Care: Glucose monitoring devices and medicine
• Diagnostics: Hematology, immunodiagnostic, oncology and clinical chemistry (including the i-Stat)
• Molecular: analysis of DNA, RNA, and proteins at the molecular level
• Nutrition: baby nutrition (Similac, Isomil, and Gain), adult health products (Ensure and ZonePerfect) and special dietary needs (Glucerna)
• Vascular: stents, vessel closure devices, endovascular and coronary technologies

It has also divested itself of less profitable businesses through sales and spinoffs. In 1964, it acquired Ross Laboratories, making Ross a wholly owned subsidiary of Abbott. In 2001, Abbott acquired Knoll, the pharmaceutical division of BASF. In 2002, Abbott divested the Selsun Blue brand to Chattem. Later in 2002, Abbott sold Clear Eyes and Murine to Prestige Brands. In 2004, Abbott spun off its hospital products division into a new 14,000 employee company named Hospira, and acquired TheraSense, a diabetes care company, which it merged with its MediSense division to become Abbott Diabetes Care. In 2006, Abbott assisted Boston Scientific in its purchase of Guidant Corporation. As part of the agreement, Abbott purchased the vascular device division of Guidant. In 2007, Ross was renamed Abbott Nutrition.

Significant Events

In January 2007, Abbott Laboratories agreed to sell its in vitro diagnostics and Point-of-Care diagnostics divisions to General Electric for more than $8 billion. These units were slated to be integrated into the GE Healthcare business unit. The transaction was approved by the Boards of Directors of Abbott and GE and was targeted to close in the first half of 2007. However, on July 11, 2007, Abbott announced that it had terminated its agreement with GE because both parties could not agree on terms of the deal.

On September 8, 2007, Abbott completed the sale of the UK manufacturing plant at Queenborough to Aesica Pharmaceuticals, a Private equity-owned UK manufacturer. No announcements have been made restricting the movement of staff to Abbott unlike other sell outs. On February 26, 2009, Abbott completed its acquisition of Advanced Medical Optics based in Santa Ana, California. The acquisition gives Abbott a Vision Eye Care division. In February 2010 Abbott completed its $6.2 billion (EUR 4.5 billion) acquisition of Solvay Pharmaceuticals. This provided Abbott with a large and complementary portfolio of pharmaceutical products and also expanding its presence in key emerging markets.

On March 22, 2010, Abbott completed its acquisition of a Hollywood, Florida-based LIMS company STARLIMS. Under the terms of the deal, Abbott Laboratories acquired the company for $14 per share in an all-cash transaction valued at $123 million. On April 21, 2010, Abbott has completed its acquisition of Facet Biotech Corporation, strengthening its pharmaceutical pipeline in immunology and oncology. On May 21, 2010, Abbott Laboratories said it will buy Piramal Healthcare Ltd.'s Healthcare Solutions unit for $3.72 billion to become the biggest drug company in India.

In October 2011, the company agreed to pay at least $1.3 billion for illegally marketing its Depakote epilepsy drug to the U.S. government and 24 states. To date, it is the third largest pharmaceutical settlement in U.S. history.

On October 19, 2011, Abbott announced that it planned to separate into two companies, one in medical products and the other in research-based pharmaceuticals. Both will be publicly traded. The medical products company will retain the Abbott name. The research- based pharmaceuticals company will be named AbbVie. The separation will be effective as of January 1, 2013. In preparation for this reorganization, Abbott has "drastically cut expenses" and taken a US$478 million charge in Q3-2012 to pay for the restructuring.

On October 2, 2012, Abbott Laboratories was charged with a $500 million fine and $198.5 million forfeiture for illegal marketing. This fine is the second-largest criminal fine for a single drug. U.S. District Court Judge Samuel G Wilson of the Western District of Virginia imposed it given Abbott's guilty plea related to its unlawful promotion of Depakote for uses not approved by the FDA. Abbott had advertised Depakote to be used to control behavioral disturbances for patients with dementia and schizophrenia, without FDA approval. In addition, Abbott marketed Depakote for other psychiatric conditions in adults, including depression, anxiety, obsessive-compulsive disorder, post-traumatic stress disorder, alcohol and drug withdrawal and psychiatric conditions in children, including conduct disorders, attention deficit disorder and autism. For this, Abbott has also been put on a five-year term of probation.