Abbott restructuring drags down Q2 profits

Restructuring charges and costs related to Abbott's ongoing efforts to split itself into two separate companies dragged its second quarter net profits down by 11 per cent, despite a slight increase in sales.

The US firm announced in October, 2011, that it was planning to spin out its pharmaceuticals business as a distinct company named AbbVie, while its diversified medical products, such as generic medicines and medical devices, would be part of a separate organisation retaining the Abbott name.

Related overheads, in addition to more general restructuring costs, meant the company saw over $218m wiped off its net earnings after tax, where Abbott recorded $1.94bn for the second quarter of 2012 on the back of sales that rose 2 per cent to $9.81bn.

Abbott's soon-to-be-renamed global pharmaceuticals division had superior growth to the company overall, and climbed by 3.9 per cent, helped by increased sales for such products as arthritis treatment Humira (adalimumab), which was up 16.5 per cent $2.33bn, and testosterone gel Androgel, which grew 24.7 per cent to $276m.

Humira is not only Abbott's top-selling product, it is also among the world's top-selling drugs. However, it set to soon face stiff competition from rival arthritis products such as a new patient-friendly version of Roche's RoActemra (tocilizumab) and Pfizer's oral treatment tofacitinib.

The success of Abbott's new pharmaceuticals-focused company will depend largely on how Humira fairs against these competitors once they reach market, although a recent positive decision in Europe for its use in patients with non-radiographic axial spondyloarthritis has put the drug on course to expand its reach.