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Abbott to split into two as Q3 profit falls

Abbott is to split into two companies covering diversified medical products and research-based pharmaceuticals as Depakote costs hit Q3 profit

US-based Abbott is to split into two companies covering 'diversified medical products' and 'research-based pharmaceuticals'.

The diversified medical products company will retain the Abbott name and focus on existing generic and nutritional products as well as medical devices and diagnostics.

The as yet unnamed research-based pharmaceuticals company will concentrate on Abbott's portfolio of proprietary pharmaceuticals and biologics, including Crohn's disease treatment Humira (adalimumab), Lupron (leuprolide) for the treatment of prosate cancer symptoms and Synagis (palivizumab) to prevent respiratory syncytial virus (RSV) infections.

According to Abbott, the products to be included in the research-based pharmaceutical business have almost $18bn in annual revenue. This company will also include R&D assets in therapeutic areas such as Hepatitis C, immunology, chronic kidney disease, women's health, oncology and neuroscience. The majority of revenue will be generated in developed markets, such as the US and EU.

The diversified medical products company currently has about $22bn in annual revenue, with the company aiming to make 40 per cent of its sales in emerging markets, with further expansion planned soon.

The announcement comes at the same time the company publishes its financial results for the third quarter of 2011, with net profit for the company down by 66 per cent to $303m.

This fall was due mainly to a $1.5bn charge to cover potential settlements in ongoing legal battles over claims that the company marketed epilepsy drug Depakote (divalproex sodium) for unapproved uses.

Revenue for the company saw positive growth, however, with worldwide sales increasing 13.2 per cent to $9.8bn.

Emerging markets sales were $2.6bn, up 21.0 per cent from 2010 and representing 26.1 per cent of total sales.

20th October 2011

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