Abbott Laboratories

1
Abbott Laboratories
Abbott Laboratories
Type Public
Traded as
NYSE:ABT
[1]
S&P 500 Component
Industry Pharmaceutical
Founded 1888 (as Abbott Alkaloidal Company)
Founder(s) Dr. Wallace Calvin Abbott
Headquarters North Chicago, Illinois, United States
Area served Worldwide
Products Pharmaceutical products
Medical devices
Diagnostic assays
Nutritional products
Animal health products
Revenue US$ 39.874 billion (2012)
Operating income US$ 8.085 billion (2012)
Net income US$ 5.963 billion (2012)
Total assets US$ 42.953 billion (2013) US$ 67.235 billion (2012)
Total equity US$ 26.813 billion (2012)
Employees
91,000 (2012)
[]
Website
abbott.com
[2]
Abbott Laboratories is an American pharmaceuticals and health care products company. It has 90,000 employees
and operates in over 130 countries.
[3]
The company headquarters are in Abbott Park, North Chicago, Illinois. The
company was founded by Chicago physician Wallace Calvin Abbott in 1888. In 2010, revenues were over $35
billion.
In 1985, the company developed the first HIV blood-screening testWikipedia:Citation needed. The company's drug
portfolio includes Humira, a drug for rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn's disease,
moderate to severe chronic psoriasis and juvenile idiopathic arthritis; Norvir, a treatment for HIV; Depakote, an
anticonvulsant drug; and Synthroid, a synthetic thyroid hormone. Abbott also has a broad range of medical devices,
diagnostics and immunoassay products as well as nutritional products, including Ensure, a line of meal replacement
shakes; and EAS, the largest producer of performance-based nutritional supplements.Wikipedia:Citation needed
The company's in-vitro diagnostics business performs immunoassays and blood screening. Its medical tests and
diagnostic instrument systems are used worldwide by hospitals, laboratories, blood banks, and physician offices to
diagnose and monitor diseases such as HIV, hepatitis, cancer, heart failure and metabolic disorders, as well as assess
other indicators of health.
Abbott Point-of-Care manufactures diagnostic products for blood analysis to provide health care professionals
diagnostics information at the point of patient care. Abbott also provides point-of-care cardiac assays to the
Abbott Laboratories
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emergency room.Wikipedia:Citation needed
History
Dr. Wallace C. Abbott
In 1888 at the age of 30, Dr. Wallace C. Abbott (18571921), an 1885 graduate of
the University of Michigan, founded the Abbott Alkaloidal Company. At the
time, he was a practicing physician and owned a drug store. His innovation was
the use of the active part of a medicinal plant, generally an alkaloid (morphine,
quinine, strychnine and codeine), which he formed into tiny pills which he called
"dosimetric granules". This was successful since it allowed more consistent and
effective dosages for patients. As the company's overseas sales and reputation was
growing, Abbott had to consider new ways to organize its sections. International
expansion began in 1931 when Abbott formed its first international office in
Montreal, Canada (Fact 21). Expansion continued in 1962 when Abbott entered
into a joint venture with Dainippon Pharmaceutical Co., Ltd., of Osaka, Japan, to
manufacture radio-pharmaceuticals. During this year, Abbott's expansion projects
in England, Italy and France were also completed.
With all these developments abroad, Abbott adopted an International Division Structure (Ranjan 41). Under this
organization of management, Abbott added another division to the three product based divisions to be responsible for
all foreign operations. This international division is itself divided regionally, with each country reporting to the
international management.Wikipedia:Citation needed
In 1967, the company successfully challenged the FDA on labeling regulations before the Supreme Court in Abbott
Laboratories v. Gardner.
In 2009, it unsuccessfully attempted to bar other pharmaceutical companies from producing a drug it had a patent on
in Abbott v. Sandoz. However, it was determined that Abbott had patented the drug by a specific process of creation
and the other companies were not infringing on the patent when they used a different process to arrive at the same
final product.Wikipedia:Citation needed
Organization
Abbott's core businesses focus on pharmaceuticals, medical devices and nutritional products, which have been
supplemented through acquisitions. The firm's divisions are:
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 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, the company acquired Knoll, the pharmaceutical
division of BASF. In 2002, it divested the Selsun Blue brand to Chattem. Later in 2002, the company sold Clear
Eyes and Murine to Prestige Brands.
In 2004, it 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 Laboratories
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Abbott purchased the vascular device division of Guidant. In 2007, Ross was renamed Abbott Nutrition.
In January 2007, the company 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 the
parties could not agree on the terms of the deal.
On September 8, 2007, the company 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, the company 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, the company 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 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 $2.2
[4]
billion to become the
biggest drug company in India.
AbbVie
On October 19, 2011, the company announced that it planned to separate into two companies, one in medical
products and the other in research-based pharmaceuticals. Both are now publicly traded. The medical products
company retained the Abbott name. The research-based pharmaceuticals company is named AbbVie. 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. The separation was effective as of January 1, 2013. AbbVie was officially listed in the New
York Stock Exchange on January 2, 2013.
Abbott, located in the north suburbs of the Chicago area, previously announced the splitting of the company. On
November 28, 2012, Abbott stated in the Chicago Tribune that once it splits into two on January 1, the shareholders
of the company would receive one share of AbbVie common stock for each share that they owned of Abbott. The
deal was approved on November 28.
Abbott announced the shareholders of the company will receive their one share of AbbVie common stock beginning
on January 1, the day the company will split. Only the shareholders who are listed as owning a share of Abbott by
December 12 will be able to receive one share of AbbVie. The new company, AbbVie, whose symbols are, ABBV,
is expected to begin trading on the New Year Stock Exchange on January 2. Abbott will continue to be run by Miles
White, the chairman and chief executive of the company. AbbVie will be led by new named CEO, Richard
Gonzalez, previous executive of Abbott. AbbVie will feature the drug Humira.
Abbott Laboratories
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Divisional structure
The company split into three main divisions based on their products: pharmaceuticals, hospital products and
nutritional products (Ranjan). The product division structure worked well for their Chicago headquarters, but when
international expansion began in Montreal, Canada, in 1931, Abbott adopted an international division structure
(Abbott Fact Book). Under this organization, Abbott's international division was responsible for all the foreign
operations.
Each international office reports to the international management division in Chicago. Another division was added in
1973, called the diagnostics division, which manages all the diagnostics business on a global scale, separate from the
international division (Corporate). In 2010, Abbott acquired Solvay SA's pharmaceutical unit (Press). However,
Abbott has had to cut jobs to minimize the costs caused by areas of overlap with Solvay (Reuters).
Management structure
The company's chief executive officer is Miles D. White, who oversees the executive vice presidents of every
internal division (Scussa). The company has implemented a new management structure to provide leadership focus
in the three product divisions, clearly defining the responsibilities of each executive vice presidents. For example,
Jeffrey M. Leiden has been appointed executive vice president of pharmaceuticals and reports to White (Scussa).
Within each division headed by the executive vice presidents, there are senior vice presidents who are responsible
for all departments that compose the division. Directors of the employees within the departments report to the senior
vice presidents and oversee the managers (human resources). This type of company division is called a matrix
structure, which incorporates both divisional and departmental separation within the headquarters. Furthermore, this
type of hierarchy within the divisions allows for a hierarchical control over each employee, with entry level
employees who are constantly reporting to a higher-ranked employee.
Abbott also uses job rotation, the lateral movement of employees within their level of hierarchy, to keep employees
motivated and diversify their work.
Management practices
Along with being ranked 75thWikipedia:Manual of Style/Dates and numbers#Chronological items on the Fortune
500 list of largest U.S.-based corporation, today, Abbott has been placed fourthWikipedia:Manual of Style/Dates and
numbers#Chronological items on the "Best Places to Work in Industry" list by The Scientist and one of the "Best
Companies for Women" (100 Best).
In 2012, the company was ranked 15th in the Top 20 BioPharma employers by Science Careers.
Litigation
Depakote
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 2, 2012, the company 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
Abbott Laboratories
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disorders, attention deficit disorder and autism. For this, Abbott has also been put on a five-year term of
probation.Wikipedia:Citation needed
Tax avoidance
Abbotts Laboratories has been reported to use tax avoidance strategies. In 2011, two Irish subsidiaries of Abbott
Laboratories made a profit of 1.8 billion and 1.1 billion respectively, but paid no tax. This is possible due to the
Double Irish arrangement. While the directors of the company are all US-based, the first one is a direct subsidiary of
an Abbott company in Switzerland which has no staff and has its registered office in Bermuda. It is considered as a
"non-resident Irish entity incorporated in Bermuda" and therefore is exempted of taxes in both US and Irish
jurisdiction.
References
[1] http:/ / www. nyse.com/ about/ listed/ quickquote.html?ticker=abt
[2] http:/ / abbott.com
[3] " Abbot Laboratories Worldwide Fast Facts and Statistics (http:/ / www. abbott. com/ global/ url/ content/ en_US/ 10. 17:17/ general_content/
General_Content_00054.htm)", Abbott Laboratories. Retrieved March 13, 2009.
[4] [4] Abbott 2011 annual report, p43
External links
abbott.com (http:/ / abbott. com) Official website
FreeStyle Navigator continuous blood glucose monitor (http:/ / freestylenavigator. com/ )
Abbott Labs global health care and medical research (http:/ / www. abbott. com/ global/ url/ home/ en_US)
Abbott/GE deal for core lab diagnostics business (http:/ / www. abbott. com/ global/ url/ pressRelease/ en_US/
60. 5:5/ Press_Release_0420. htm/ )
Abbott terminates deal with GE (http:/ / www. abbott. com/ global/ url/ pressRelease/ en_US/ 60. 5:5/
Press_Release_0494. htm/ )
Abbott Hellas (http:/ / www. abbott. gr/ )
NIH Won't Intervene in AIDS Drug Pricing Issue (http:/ / www. washingtonpost. com/ wp-dyn/ articles/
A40430-2004Aug4. html), The Washington Post, August 4, 2004
Abbott Laboratories timeline Abbott: A History of Medical Innovation (http:/ / www. abbott. com/ global/ url/
content/ en_US/ 10. 30:30/ general_content/ General_Content_00069. htm)
CELL-DYN Hematology Analyzer Abbott Laboratories Validate Region (http:/ / www. abbottdiagnostics. com/
Products/ Instruments_by_Platform/ yl. cfm?syscat=Hematology)
2007 annual report win (http:/ / www. lacp. com/ 2007vision/ 6972. HTM)
Abbott Laboratories Analysis on Wikinvest
Abbott Acquired STARLIMS Laboratory Information Systems (http:/ / www. starlims. com/
STARLIMS_ABBOTT. htm)
AbbVie.com (http:/ / www. abbvie. com/ )
Article Sources and Contributors
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Article Sources and Contributors
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