|This article needs additional citations for verification. (July 2013)|
|Traded as||NYSE: ABT
S&P 500 Component
|Founded||1888(as Abbott Alkaloidal Company)|
|Founder(s)||Dr. Wallace Calvin Abbott|
|Headquarters||North Chicago, Illinois, United States|
Animal health products
|Revenue||US$ 39.874 billion (2012)|
|Operating income||US$ 8.085 billion (2012)|
|Net income||US$ 5.963 billion (2012)|
US$ 42.953 billion (2013)US$ 67.235 billion (2012)
|Total equity||US$ 26.813 billion (2012)|
Abbott Laboratories is an American pharmaceuticals and health care products company. It has 90,000 employees and operates in over 130 countries. 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 test. 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.
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 emergency room.
In 1888 at the age of 30, Dr. Wallace C. Abbott (1857–1921), 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.
In 1967, the company successfully challenged the FDA on labeling regulations before the Supreme Court in Abbott Laboratories v. Gardner.
In May 2014 the company entered into a binding agreement to acquire Chilean generic pharmaceutical company CFR in a deal worth $2.9 billion which the company said would more than double its branded generic drugs business in Latin America.
In June 2014 the company entered into a definitive agreement to take over Russian pharmaceutical manufacturer Veropharm, in a deal worth $631 million. Abbott, which already employees 1,400 people in Russia, said it planned to set up a manufacturing presence in the country once the deal closed.
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 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 billion to become the biggest drug company in India.
On May 16, 2014, it was announced that Abbott would acquire the holding company (Kalo Pharma Internacional S.L.) which owns 73% of Chilean pharmaceutical company, CFR Pharmaceuticals, for $2.9 billion.
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 York 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.
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).
Miles D. White (CEO), oversees the executive vice presidents of every internal division. 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.
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.
Along with being ranked 75th[when?] on the Fortune 500 list of largest U.S.-based corporation, today, Abbott has been placed fourth[when?] on the "Best Places to Work in Industry" list by The Scientist and one of the "Best Companies for Women" (100 Best).
In March 2003, British company Cambridge Antibody Technology (CAT) stated its wish to "initiate discussions regarding the applicability of the royalty offset provisions for Humira" (Adalimumab) with Abbott Laboratories in the High Court of London. In December 2004, the judgment ruled for CAT.
Abbott was required to pay CAT US$255 million, some of which was to be passed to its partners in development. Of this sum, the Medical Research Council (United Kingdom) (MRC) received US$191M, and in addition, Abbott was asked to pay the MRC a further US$7.5M over five years from 2006, providing that Humira remains on the market. The MRC was also
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. Shareholders then brought derivative suits against the company directors for breach of fiduciary duty which Abbott objected to, but the court ruled against Abbott's motions to dismiss and reconsider, and in favor of the shareholders.
On October 2, 2012, the company was charged with a $500 million fine and $198.5 million forfeiture for illegal marketing, and in a plea agreement was assessed the second-largest criminal fine in U.S. history for a drug company. 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 additionAbbott 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. The court also ordered Abbott to a five-year term of probation and court supervision for its CEO and Board of Directors.
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.
Notes and references
- "Form 10-K/A, Amendment No. 1". United States Securities and Exchange Commission. Retrieved December 27, 2013.
- "Annual Report Form 10-K". United States Securities and Exchange Commission. February 21, 2014.
- "Abbot Laboratories Worldwide Fast Facts and Statistics", Abbott Laboratories. Retrieved March 13, 2009.
- "Abbott Laboratories", Abbott Laboratories. Retrieved July 07, 2014.
- "Abbott Laboratories Company History". Funding Universe. Retrieved April 17, 2013.
- "Medical-products giant Abbott to acquire CFR Pharmaceutical for $2.9bn". Business Sun. Retrieved May 17, 2014.
- "Russian drug maker Veropharm being acquired by Abbott for $631mn". Russia News.Net. Retrieved 24 June 2014.
- Layne, Rachel; Lopatto, Elizabeth (July 11, 2007). "GE, Abbott End $8.13 Billion Diagnostic Sale Deal (Update2)". Bloomberg News.
- Abbott Press Release (February 16, 2010). "Abbott Completes Acquisition of Solvay Pharmaceuticals". Retrieved March 22, 2012.
- "Abbott Laboratories Feb 2010 Current Report, Form 8-K, Filing Date Feb 16, 2010". secdatabase.com. Retrieved Dec 27, 2012.
- Abbott Press Release (March 22, 2010). "Abbott Completes Acquisition of STARLIMS Technologies". Retrieved March 22, 2012.
- Abbott Press Release (April 21, 2010). "Abbott Completes Acquisition of Facet Biotech". Retrieved March 22, 2012.
- Abbott 2011 annual report, p43
- Abbott Press Release (May 21, 2010). "Abbott to Become No. 1 Pharmaceutical Company in India with Acquisition of Piramal's Healthcare Solutions Business". Retrieved March 22, 2012.
- Bloomberg Release (May 16, 2014). "Abbott to acquire CFR Pharmaceuticals". Retrieved May 16, 2014.
- Abbott Press Release (October 19, 2011). "Abbott to Separate into Two Leading Companies in Diversified Medical Products and Research-Based Pharmaceuticals". Retrieved March 22, 2012.
- Abbott Press Release (March 21, 2012). "Abbot Selects AbbVie as New Name for Future Research-Based Pharmaceutical Company". Retrieved March 22, 2012.
- Frost, Peter (October 17, 2012), "Abbott lays off 550", Chicago Tribune, retrieved November 16, 2012
- Abbott Press Release (January 2, 2013). "Abbott Completes Separation of Research-Based Pharmaceuticals Business". Abbott Laboratories. Retrieved January 2, 2013.
- AbbVie Press Release (January 2, 2013). "AbbVie Celebrates Launch As New Biopharmaceutical Company With Employees, Patients". AbbVie Pharmaceuticals. Retrieved January 2, 2013.
- "Annual Top Employers Survey: Stability in the Face of Change".
- "Cambridge Antibody Wins Lawsuit Against Abbott Labs (Update5) - Bloomberg".
- "Abbott Said to Agree to Pay $1.3 Billion for Depakote Suits". Bloomberg. October 22, 2011.
- U.S. ex rel. McCoyd v. Abbott Laboratories, 1:07-cv-00081 (W.D. Va.); U.S. ex rel. Mulcahy v. Abbott Laboratories, 1:08-cv-0054 (W.D. Va.); U.S. ex rel. Dietzler v. Abbott Laboratories, 1:09-cv-00051 (W.D. Va.); U.S. ex rel. Spetter v. Abbott Laboratories, 1:10-cv-00006 (W.D. Va.).
- Memorandum Opinion And Order denying Abbotts' Motion to Dismiss, In Re Abbott Depakote Shareholder Derivative Litigation, No. 11 C 8114, US Dist. C., N.D. Illinois, Eastern Div., Jun. 5, 2013. Accessed Aug. 17, 2014.
- Memorandum Opinion And Order denying Abbotts' Motion for Reconsideration, In Re Abbott Depakote Shareholder Derivative Litigation, No. 11 C 8114, US Dist. C., N.D. Illinois, Eastern Div., Sep. 12, 2013. Accessed Aug. 17, 2014.
- Abbott Labs to Pay $1.5 Billion to Resolve Criminal & Civil Investigations of Off-label Promotion of Depakote, Press Release, United States Department of Justice Office of Public Affairs, May 7, 2012. Accessed Aug. 17 2014.
- "Abbott Laboratories Irish subsidiary paid no tax on €15.8 billion profit". The Irish Times. May 31, 2013.
- "Abbott subsidiaries paid no tax on €2.9 billion profits". Sligo Today. 2013-05-29.
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