Acquisitions by Abbott

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TERM PAPER

Abbott laboratories, Inc. - Mergers and Acquisitions

GLOBAL PHARMACEUTICAL INDUSTRY

HISTORY

The roots of the pharmaceutical industry lie back with the apothecaries and pharmacies that offered traditional remedies as far back as the middle

ages, but the industry as we understand it today really has its origins in the second half of the 19th century. Whilst the scientific revolution of the

17th century had spread ideas of rationalism and experimentation, and the industrial revolution had transformed the production of goods in the

late 18th century, the marrying of the two concepts for the benefit of human health was a comparatively late development.

Merck in Germany was possibly the earliest company to move in this direction. Originating as a pharmacy founded in Darmstadt in 1668, it was

in 1827 that Heinrich Emanuel Merck began the transition towards an industrial and scientific concern, by manufacturing and selling alkaloids.

Similarly, whilst GlaxoSmithKlines origins can be traced back as far as 1715, it was only in the middle of the 19th century that Beecham

became involved in the industrial production of medicine, producing patented medicine from 1842, and the worlds first factory for producing

only medicines in 1859.

Meanwhile, in the USA, Pfizer was founded in 1849, by two German immigrants, initially as a fine chemicals business. They expanded rapidly

during the American civil war as demand for painkillers and antiseptics rocketed. Whilst Pfizer was providing the medicines needed for the

Union war effort, a young cavalry commander named Colonel Eli Lilly was serving in their army. A trained pharmaceutical chemist, Lilly was

an archetype of the dynamic and multi-talented 19th century American industrialist, who after his military career, and trying his hand at farming,

set up a pharmaceutical business in 1876. He was a pioneer of new methods in the industry, being one of the first to focus on R&D as well as


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manufacturing. Another military man in the drugs business was Edward Robinson Squibb, who as a naval doctor during the Mexican-American

war of 18461848 threw the drugs he was supplied with overboard due to their low quality. He set up a laboratory in 1858, like Pfizer supplying

Union armies in the civil war, and laying the basis for todays BMS.

Switzerland also rapidly developed a home-grown pharmaceutical industry in the second half of the 19th century. Previously a centre of the trade

in textiles and dyes, Swiss manufacturers gradually began to realise their dyestuffs had antiseptic and other properties and began to market them

as pharmaceuticals, in contrast to the origin in pharmacies of other enterprises. Switzerlands total lack of patent laws led to it being accused of

being a pirate state in the German Reichstag. Sandoz, CIBA-Geigy, Roche and the Basel hub of the pharmaceutical industry all have their

roots in this boom.

It wasnt just Swiss companies had their roots in the dye trade. Bayer wa s founded in 1863 as a dye making company in Wuppertal, the

hometown of Karl Marxs collaborator Friedrich Engels. It later moved into medicines, commercialising aspirin around the turn of the 20th

century, one of the most successful pharmaceuticals ever at that point.

The unregulated nature of the trade in medicines during this period ensured there was a far less strict delineation between pharmaceutical and

chemical industries than we have nowadays. These companies focused as much on cod liver oil, toothpaste, citric acid for so ft drinks, and hair

gel as on prescription medicines, as well as selling products like heroin on the over-the-counter market.

The national rivalries and conflicts that characterised this period also had their impact on the developing industry; Bayer had the aspirintrademark and its US assets seized during World War One, whilst American Merck (now Merck & Co. in the US or Merck Sharp & Dohme

[MSD] elsewhere) was compulsorily split off from its Germany parent company (Merck KGaA) at the same time. Bayer also had its Russian

subsidiary seized during the Russian revolution. This disruption to Germanys position as the leader in pharmaceuticals in the early 20th century


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by the war meant that others, particularly in the US, could take relative advantage. The beginnings of the globalisation of the industry were seen

both before and after the warin the UK, import duties incentivised many foreign companies such as Wyeth, Sandoz, CIBA, Eli Lilly and MSD

to set up subsidiaries in Britain in the post-war years.

The interwar years also marked two breakthroughs that presaged the arrival of the pharma industry as we know it today. The first was insulin;

Frederick Banting and colleagues managed to isolate insulin that could treat diabetes, up until that point a fatal condition. But it was only in

collaboration with the scientists at Eli Lilly that they were able to sufficiently purify the extract and industrially produce and distribute it as an

effective medicine.

The second was penicillin, a discovery of an impact possibly unparalleled by any other in medicine. After Alexander Flemings initial discovery

of the penicillium moulds antibiotic properties in 1928, and Howard Florey and Ernst Chains further experiment ation, a government-supported

international collaboration including Merck, Pfizer and Squibb worked on mass producing the drug during World War Two, saving thousands of

soldiers lives. The immense scale and sophistication of the penicillin development effort marked a new era for the way the pharmaceutical

industry developed drugs. The war had also encouraged research into everything from new analgesics to drugs against typhus, with a great deal

of collaboration between the companies and government.

After the war, the arrival of social healthcare systems such as the UKs National Health Service (NHS) in Europe created a much more

structured system; both for prescription of drugs and their reimbursement. In 1957, the NHS brought in what was essentially a price fixingscheme to allow reasonable return on investment for drug manufacturers, solidifying the incentive to invest in new medicines. This greater role

for the state in healthcare was paralleled on both sides of the Atlantic in increasing government regulation of medicine production. The

Thalidomide scandal of 1961 prompted an increase in the regulation and testing of drugs before licensing, with a new amendment to US Food


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and Drug Administration (FDA) rules demanding proof of efficacy and accurate disclosure of side-effects for new medications (the Kefauver

Harris Amendment) being implemented in 19624. Likewise, the 1964 Declaration of Helsinki put greater ethical structures on clinical research,

clearly cementing the difference between production of scientific prescription medicines and other chemicals.

Fordian methods enabled more rational methods of mass production, and increasing understanding of biology and chemistry enabled drug

candidates to be chosen systematically rather than discovered serendipitously. This golden age of drug development took place in the broader

landscape of the post-war boom; a general context of massive improvements in standards of living and technological optimism that characterised

the 40s to the early 70s, as well as the science-boosting competition of the cold war. As the barriers to entry in drug production were raised, a

great deal of consolidation occurred in the industry. Likewise, the processes of internationalisation begun before the war were continued in

1951 alone Pfizer opened subsidiaries in nine new countries.

The list of novel drugs from the post-war era speaks for itself. The contraceptive pill, introduced in 1960, had an impact on society almost as

massive as that of penicillin, enabling women to effectively control their fertility and enabling sexual equality for the first time. Valium

(diazepam) was brought to the market by Roche in 1963, followed by the introduction of the monoamine oxidase inhibitor (MAOI) class of anti-

depressants and antipsychotic haloperidol. These drugs ushered in a new era of psychiatric treatment, adding effective biological treatments to

the psychoanalytic ones that had previously characterised psychiatry in this era. The 1970s provided a wave of cancer drugs, as part of the US

governments war on cancer; a recent report from Cancer Report UK showed that survival rates have doubled since the early 70sdue in large

part to the massive innovation in oncology medicines that has occurred since then. ACE inhibitors arrived in 1975, improving cardiac health; and

even drugs as ubiquitous as paracetamol and ibuprofen were developed in 1956 and 1969 respectively.


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As the 1970s drew to an end, a shift began in the way the pharma industry focused its energies. In 1977, Tagamet, an ulcer medication, became

the first ever blockbuster drug, earning its manufacturers more than $1 billion a year and its creators the Nobel Prize. This marked a new

departure as companies competed to be the developer of the next big blockbuster, and many achieved great success. Eli Lilly released the first

selective serotonin reuptake inhibitor (SSRI), Prozac, in 1987, once again revolutionising mental health practice. The first statin was also

approved in 1987, manufactured by Merck (MSD).

But whilst there were some breakthroughs, the enormous expense and risks involved in R&D caused many to merely ape their competitors,

trying to get a cut of market-share using me too formulations rather than innovating novel medications. For example, AstraZenecas popular

proton pump inhibitor Nexium (esomeprazole), released in 2001, is merely a purified single isomeric version of an older drug which happened to

be losing patent protection. Patents, or the lack of them, became a problem for the industry. The Hatch-Waxman Act of 1984 regularised generic

production in the US, and some developing countries made policy decisions to ignore medical patents. The industrys focus increased on

marketing to maintain market share, on lobbying politicians to protect commercial interests, and on lawyers to enforce legal claims on

intellectual property rights. These activities have brought a greater suspicion of the industry in the public at large. However, this can be linked to

a wider anti-science feeling and more pessimistic outlook on the possibilities of technology in society, as seen in panics over issues such as

genetically-modified crops and suspicion towards nuclear power.

Companies have tried to overcome some of these problems by outsourcing various aspects of their processes, and through buying up smaller

companies that perhaps retain more of the innovative entrepreneurialism of the pioneers of the 19th century. But new technologies are whatreally promise a positive future for the industry in the 21st century. Both computing and biotechnology have allowed great leaps forward in both

development and production of new drugs. Automation of the drug discovery process through high-throughput screening, and the

computerisation of genomics have allowed breakthroughs at a much higher rate than previously. Starting with insulin in the 1970s, genetic


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modification has allowed production of human proteins by bacteria. And biological drugs such as the monoclonal antibodies, introduced around

the turn of the millennium, hint at a whole new panorama of far more specific drugs that could impact on human health as much as the medicines

of last century.

EXECUTIVE SUMMARY

Dr. Wallace C. Abbott founded Abbott Laboratories in 1888 in northern Chicago. Over the last century, Abbott has developed into a diversified

medical products company, developing, producing and marketing a range of products that are used in prevention, diagnosis, treatment, and care.

The company has two major product groups; the first, diversified medical products include diagnostics, nutritional products, established

pharmaceuticals, and medical devices. The second, research-based pharmaceuticals, has been the core line of business for Abbott and spurred

most of their growth. Abbott currently employs over 60,000 people worldwide and sells its products in 140 countries.

Abbott Laboratories is classified in the brand pharmaceutical industry, a highly competitive industry in which the firms rely on research and

development to create innovative drugs. Through securing patents for these discovered drugs brand pharmaceuticals are able to protect their

drugs against replicas. In this industry patent protection lasts for twenty years, but the long development process necessary to bring drugs to

market makes their effective lifespan a little over a decade. Once these patents expire generic pharmaceutical companies can immediately begin

duplicating the drug and offering it at a substantial discount, undercutting the branded pharmaceuticals and eroding their sale volume and

revenue. Although research-based pharmaceuticals have been Abbotts main line of business throughout the past century, in recent years they

have shifted more of their focus on to the diversified medical product sector. The culmination of this shift came in October of 2011 when they

announced the spinning off of their research-based pharmaceutical business and the intention to keep the diversified medical products under the

Abbott name. This shift comes at a time when big pharmaceutical companies face an extremely murky landscape going forward. Research and


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development costs for new drugs have skyrocketed in recent years and increased government regulation projected to shorten patent protection

periods has made it increasingly difficult for pharmaceutical companies to produce high enough revenues to cover their costs of production.

Griffin agrees with Abbotts decision to shift their focus away from branded pharmaceuticals towards other pillars of their business. They will,

however, need to focus on increasing their margins in these lines of business, especially as they expand internationally in to high-growth

emerging markets. Abbott has already begun expanding overseas and 2011 saw 60% of Abbotts net sales generated abroad. This trend should

continue with the bleak outlook for American pharmaceutical demand and the increased demand, especially for branded generic products, in

emerging market countries. While they still operate both lines of business it is in Abbotts best interest to develop synergies between their

product lines. Currently, although it is a diversified company, Abbott operates its product lines fairly independently. If they instead restructured

slightly to incorporate aspects of each of their lines in their products they might be able to produce more cutting edge, innovative products. An

example of this is Xience, Abbotts blockbuster drug-eluting stent. This product was developed jointly between Abbotts medical devices and

pharmaceutical branches. Abbott is one among few companies diversified and developed enough to produce such a product, and as such as seen

the stent become a best-selling product with essentially no viable competitors. By creating more synergies within the branches of its business

Abbott can take advantage of economies of scope and create novel products that carve out their own distinct niches in the marketplace. The final

aspect Griffin believes Abbott can pursue its further diversifying their product line through acquisitions of biotech companies. Biotech products

tend to be produced using microorganisms and DNA, making them much more difficult to copy than traditional pharmaceutical compounds.

This complexity will allow Abbott to retain more market share of their products after the patent expires, reducing their exposure to generic

erosion, the main threat for all big pharmaceutical companies. In this same vein, increasing focus on Abbotts branded generics product line will

allow the company to retain some of that erosion, and perhaps get a leg up on other generic manufacturers since they will already have the

infrastructure and scientific knowledge in place to produce the drugs efficiently.


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HISTORY

Abbott got its name and start from Dr. Wallace C. Abbott, a practicing physician and pharmacy proprietor at his Peoples Drug Store in Chicago.

In 1898, Dr. Abbot began producing tiny pills called dosimetric granules using alkaloid to improve his patients medications. Soon the demandfor these granules grew beyond that of his patients and so began the Abbott Alkaloidal Company in 1900. Abbott Laboratories had modest

origins, bringing in just $2000 its first year, but by 1910, Abbott had expanded into New York, San Francisco, Seattle and Toronto with over 700

products in its catalog. Five years later, Abbott Alkaloidal Company officially changed its name to Abbott Laboratories to reflect the companys

new direction into research and synthetic compounds. The company went public in 1929, and now Abbott has more than 120 facilities

worldwide and has become a global innovator in healthcare and new products. With a long, rich history, Abbott has been a major player in

innovation, health care expansion and development of new products since its inception. During WWI, Abbotts antiseptic agent Chlorazene

helped soldiers clean wounds. Seven years later, Abbott developed Butyn, a butyl alcohol-based anesthetic, which began Abbotts pioneering

role in the development of anesthesia products. In 1930, Abbott introduced Nembutal, used to treat seizures, preoperative sedation and insomnia;

today, the anesthetic is still one of Abbotts best-known and widely-used products. In the early 1930s, Abbott doctors Ernest H. Volwiler and

Donalee L. Tabern created anotheranesthetic, Pentothal, which is now on the World Health Organizations Essential Drug List. The invention

of Pentothal began Abbotts expansion into the I.V. segment.Fifty years after Pentothals introduction, Volwiler and Tabern were inducted into

the U.S. Inventors Hall of Fame. Throughout the rest of the century, Abbott introduced groundbreaking products that have led to them becoming

a global leader in pharmaceutical, medical, and nutritional products. Since Abbots inception, the company has grown and entered new segments

through acquisitions. In 1964, Abbott acquired Ross Laboratories, turning it into a wholly owned subsidiary of Abbott and renaming it Abbott

Nutrition in 2007. Since 2001, Abbott has purchased Knoll, the pharmaceutical division of BASF; TheraSense, a diabetes care company; the

vascular device division of Guidant; and Advanced Medical Optics, giving Abbott a Vision Eye Care division in 2009. All acquisitions served to

improve Abbotts standing as a leader in global, broad-based health care and an innovator in new medicines, technologies and health


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management. The acquisition of the pharmaceutical arm of BASF Knoll has proven especially beneficial to Abbott. BASF created and owned

the drug Humira, which treats rheumatoid arthritis, until the Abbott acquisition. Humira has proven to be a highly profitable drug and has

potential to add $10 billion in sales for 2012. In 2010, acquisitions continued with the purchases of Solvay Pharmaceuticals, expanding Abbotts

presence in emerging markets and enhancing its portfolio of pharmaceutical products; STARLIMS, a LIMS company based in Hollywood and

Florida for an all-cash transaction valued at $123 million; and Facet Biotech Corporation, strengthening its oncology and immunology divisions.

Recently, Abbott acquired Piramal Healthcare Ltds Healthcare Solutions unit for $3.72 billion to become Indias largest drug company. To

refine Abbotts focus, it has also sold several subsidiaries. In 2002, Abbott sold the Selsun Blue, Clear Eyes and Murine brands. These

acquisitions and divestitures have helped position Abbott as a leader in six targeted sectors: pharmaceutical products, nutritional products,

diagnostic instruments & tests, medical & surgical devices, animal health, and vision technologies.

PRODUCT OVERVIEW

Pharmaceutical product

Abbott laboratories pharmaceutical products include a broad line of adult and pediatric medicines which are manufactured marketed and sold

worldwide. Most of these products are only available through prescriptions or physicians recommendations. Generally, pharmaceutical products

are sold directly to wholesalers, government agencies, health care facilities, speciality pharmacies and independent retailers.

Pharmaceutical products made up about 60% of total sales revenue for Abbott laboratories in 2012. Medicines the segment treat a wide range of

problems including: HIV/AIDS, rheumatoid arthritis, crohns disease, autoimmune disorders, migraines, epilepsy, bipolar disorder, obesity,

thyroid disorder, high cholesterol, hypertension, dyslipidemeia and all type of cancers. Though a few key products drive sales in the

pharmaceutical segment, Abbott offers over 100 medicines in the pharmaceutical area.


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Key Products:

Humira

Humira is used to reduce the signs and symptoms of moderate to severe rheumatoid arthritis in adults. The drug is intended to preventfurther damage to bones and to help patients more easily perform daily activities. Humira can also be used to reduce signs and symptoms of

certain types of moderate to severe juvenilie arthritis in children over 4 years of age. In addition to treating rheumatoid arthritis, Humira also is

used to reduce the signs and symptoms of Crohns disease in adults who have not responded positively to traditional treatment s.

Kaletra

Kaletra is used for adults and children 2 years of age or older who are infected with the HIV virus, the virus that causes AIDS. Kaletra

works by inhibiting an enzyme that the HIV virus needs to multiply. The drug is known as Aoluvia or Norvir in areas outside the United States.

Synthroid

Synthroid has several different use, all stemming from problems with the thyroid gland. It can be used to treat hypothyroidism, a

condition where the thyroid glands does not produce enough of a certain hormone. The drug can also help to decrease the size of an enlarged

thyroid gland, a condition known as goitre. Finally, synthroid is effective in treating thyroid cancer.

Nutritional Products

Abbott laboratories nutritional products include a broad line of adult and paediatric products, which are manufactured, marketed, and sold

worldwide. The company produces some of the worlds most trusted names in adult, paediatric, and healthy living products. Nutritional products

are generally marketed and sold to institutions, wholesalers, retailers, health care facilities, and government agencies.


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Nutritional products are made up about 17% of total sales revenue for Abbott Laboratories in 2008. Total sales in the nutritional products

segment were up 12.2% in 2008 compared to 2007. Products in the segment include several popular consumer brands. The company also offers

nutritional products and feeding devices to patients with special feeding needs due to food allergies, injury, illness, respiratory conditions, and

gastrointestinal impairment. Though most sales in the nutritional products segment are driven by a few consumer brands, Abbott offers 9

products in this segment.

Key Products:

Similac

Similac is an entire line solely dedicated to infant nutrition. 3 products ( regular, iron enchanced, and omega-3 / omega-6

enchanced) are available for infants ages 0-6 months that are intended to replace or supplement regular breast feeding. 2 products (regular and

omega-3 / omega-6 enchanced) are available for infants ages 6-24 months. These products are intended to promote continued growth as well as

bridge nutritional gaps common in making the nutrients infants need for growth and development. Products are offered for infants with special

needs such as lactose intolerance and multiple allergies, as well.

Ensure

Ensure is a nutritional drink intended for adults that offers complete, balanced nutrition with essential vitamins and minerals thatpromotes improved overall health and energy. Ensure is lactose-free and comes in many different variations including Ensure Plus, Ensure high

Protein, Ensure Fibre, and Ensure Pudding.


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Key Products:

ARCHITECT

ARCHITECT is a diagnostic instrument capable of testing for many different health issues in the areas of drug abuse/toxicology,general chemistry, metabolic, specific proteins, and therapeutic drug monitoring. In all, ARCHITECT can conduct over 85 specific tests.

ARCHITECT is able to conduct about 1200 tests per hour, enough to meet most laboratory testing needs.

m2000

m2000 is an instrument that automates the extraction, purification, and preparation of DNA and RNA samples from patients. The

instrument is also capable of detecting and measuring infectious such as HIV and HPV. m2000 has multiple validity checks to ensure improved

accuracy.

Vascular Products

Abbott Laboratories vascular products include a broad line of coronary, endovascular, and vessel closure devices, which are manufactured,

marketed, and sold worldwide. Abbotts vascular products are known for their safety, effectiveness, and ease of use in treating patients. The

company is focusing on improving patient care by combining the latest medical device innovations, world class pharmaceuticals, and research

and development.

Vascular products do not currently make up a huge amount of Abbott Laboratories total sales revenue (Around 7%). Total sales in the vascular

products segment, however, have risen dramatically in the past few years. Sales rose 32.8% in 2006, 54% in 2007, and 35% in 2008. So far, in


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2009, vascular products are accounting for nearly 10% of total sales revenue for Abbott. Products in the segment include a wide range of devices

used in the treatment of patients with vascular disease. Though most sales in the vascular products segment are driven by a few key products,

Abbott offers 25 products in the segment.

Key Products:

Xience v

Xience v is Abbott Laboratories most recent, technologically advanced stent for the treatment of coronary artery disease. The

Xience v stent uses the proven technology of the MINI VISION stent along with an effective drug coating that helps to open and prevent re-

narrowing of narrowed arteries. Though still a very young product, the Xience v stent has been billed as technologically superior to its

competitors and is already seeing a huge increase in its market share.

MINI VISION

MINI VISION is Abbott Laboratories first cobalt chromium stent for small vessels. The device features thinner s truts, which

have been proven to lower vessel injury. The alloy is also much stronger than stainless steel, which allows the MINI VISION to have 45%

reduced metal volume as compared to its competitors.


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StarClose

StarClose is a vascular closure system that features innovative design ideas in the clip. The system is designed to promote the

primary healing process to achieve a secure close of femoral artery access sites following vascular procedures.

Abbotts Business and Growth Strategies

For fiscal year 2012, Abbott Laboratories focus on several key areas. First, the company plans to continue leveraging its staple drug, Humira.

Sales in the drug have increased from $2.0 billion in 2010 to $4.5 billion in 2011, and Abbott forcasts sales of Humira to increase 25% in 2012.

The increased revenue will stem from continued research and development as well as selling support dedicated to maximizing the worldwide

potential of the drug. In addition, Abbott is studying two possible extra applications for the drug.

Abbott Laboratories also plans on maximizing its market share in new worldwide markets. Over half of the companys total sales revenue comesfrom international markets and much of its recent growth has been due to increased international sales. International sales rose 23.9% in 2011

and 24.1% in 2012. So far in 2011, international slaes have only risen 0.7%, but this is more of a reflection of a relatively stronger U.S. dollar.

Net international sales increased 8.0% in the first six months of 2011, including a 10.5% increase in the second quarter. The relatively stronger

U.S. dollar has decreased international sales in 2011 by 13.0%. with this taken into account, Abbott expects to see steady continued increase in

sales revenue from international markets.

Abbott Laboratories also hopes to continue its growth in the vascular products segment. Research is being performed on new devices in the

segment, including a drug eluting stent and a bioabsorbable stent. After huge gains in 2009-2011, the vascular products segment has been a

38.3% sales revenue increase in the first nine months of 2011.


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In February 2009, Abbott Laboratories acquired the outstanding shares of Advanced Medical Optics, Inc (AMO). AMO is a marketer of

ophthalmic surgical technology and devices as well as eye care solutions. AMO was acquired for approximately $1.4% billion, and was financed

through long-term debt. Abbott also acquired $1.5 billion in debt from the transaction. Abbott acquired AMO in hopes of taking advantage of

increasing demand for vision care technologies due to population growth and demographic shifts.

Abbott Laboratories has recently engaged in acquiring several smaller health care services companies. In October 2009, Visiogen Inc. was

acquired for $400 million. Visiogen Inc. specializes in eye care products for patients with cataracts. Also in October 2009, Abbott bought

Evalve, which specializes in non-surgical treatments for patients with heart disease. Evalve was acquired for $410 million. Of perhaps more

importance, in September 2009, an agreement was reached to obtain Solvays pharmaceutical business. So lvay has the capabilities to produce a

vaccine for the recent outbreak of the swine influenza. The agreement was for $6.6 billion and is expected to close in the first quarter of 2010. In

2010, Abbott acquired Piramal health care.

Acquisitions by Abbott in India:

The Indian Pharmaceutical Market

India is one of the world's fastest-growing pharmaceutical markets, due in large part to branded generics. The market will generate nearly $8

billion in pharmaceutical annual sales this year, a number that is expected to more than double by 2015. Abbott estimates the growth of its Indian

pharmaceutical business with Piramal to approach 20 percent annually, with expected sales of more than $2.5 billion by 2020.


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Branded generics have significant brand equity in many international markets, providing durable, sustainable franchises for future growth.

Piramal markets the products in its Healthcare Solutions business in India only and does not market traditional generic products. Today, branded

generics account for 25 percent of the global pharmaceutical market, have the majority of market share in the largest emerging markets, and are

expected to outpace growth of patented and generic products.

The Mumbai-based Piramal Healthcare Solutions business has a comprehensive portfolio of branded generics with annual sales expected to

exceed $500 million next year in India, and market-leading brands in multiple therapeutic areas, including antibiotics, respiratory,

cardiovascular, pain and neuroscience. Piramal has a strong commercial presence, including the largest sales force in India with a unique model

that includes dedicated sales personnel in rural areas inhabited by 70 percent of the population. The combined Abbott and Piramal sales forces

will be the industry's largest in India.

Piramal's Healthcare Solutions business will become part of Abbott's newly created, stand-alone Established Products Division. Piramal's

Healthcare Solutions business employs more than 5,000 people in India. Abbott, has more than 2,500 employees across all of its businesses in

india.

Piramal healthcare Ltd:

About the Piramal Group:

The Piramal Group, led by Ajay G. Piramal is one of India's foremost business conglomerates. Driven by the core values of Knowledge Action

Care, the Piramal Group has interests in a myriad of industries that encompass healthcare, drug discovery & research, diagnostics, glass, real


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estate and financial services. The Piramal Group steadfastly pursues inclusive growth while adhering to ethical and value driven practices. The

Group's turnover exceeded US $1 billion in FY2012.

Acquisition by Abbott:

On September 8, 2010, Abbott acquired Piramal Healthcare Limiteds Healthcare Solutions business, a leader in the Indian branded generics

market, for $2.2 billion, in cash, plus additional payments of $400 million annually in 2011, 2012, 2013 and 2014. Abbott recorded a $1.6 billion

liability for the present value of the additional payments at the acquisition date. The acquisition was financed with cash. The allocation of the fair

value of the acquisition resulted in the recording of $2.7 billion of deductible acquired intangible assets and $1.0 billion of deductible goodwill.

Acquired intangible assets consist primarily of trade names, customer relationships and associated rights and are amortized over an average of

19 years.

Strategic action will propel Abbott to No. 1 position with annual sales growth approaching 20 percent in India, expected to exceed $2.5 billion

in sales by 2020. Piramal's comprehensive portfolio of market-leading branded generics spans multiple therapeutic areas ; combined sales force

to become industry's largest in India, one of world's fastest-growing markets, generating nearly $8 billion in pharma sales this year; expected to

more than double by 2015.

And also Abbott's collaboration with Zydus Cadila as well as the creation of a new stand-alone Established Products Division to focus on

expanding the global markets for its leading branded generics portfolio.


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This strategic action will advance Abbott into the leading market position in India, one of the world's most attractive and rapidly growing

markets. Abbott's strong position in branded generics and growing presence in emerging markets is part of their ongoing diversified

pharmaceutical strategy, complementing their market-leading proprietary pharmaceutical offerings and pipeline in developed markets.

Emerging markets represent more than 20 percent of Abbott's total business.

With this piramals acquisition, the combined health care solutions and Abbott business became the clear market leader in India, with a market

share of approximately 7%.


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Abbott's Established Products Strategy

Throughout the past decade, Abbott has built a leading portfolio of branded generics, through its own products as well as those acquired with the

2001 acquisition of Knoll's pharmaceutical business. In 2007, the company established a separate business unit within its international

pharmaceutical division dedicated to established products.

Additionally, a new geographic region focused on Russia, India and China was created, which resulted in the doubling of Abbott's growth rate in

those countries. Most recently, the company acquired Solvay Pharmaceuticals, obtaining a diverse branded generics portfolio and providing

significant critical mass in key emerging markets.

As a result of these combined actions, Abbott is now among the leading multinational health care companies in numerous emerging markets.

Approximately 20 percent of Abbott's pharmaceutical sales today are in emerging markets.

Abbott have assembled a market-leading branded generics portfolio tailored to the unique needs of emerging markets, strongly positioning

Abbott to meet the current and future geographic and market dynamics in pharmaceuticals.

Pharmaceutical sales in emerging markets are expected to grow at three times the rate of developed markets and account for 70 percent of

pharmaceutical growth over the next several years. This explosive growth is occurring as demographics, rising incomes, modernization of health

systems and an increase in the treatment of chronic disease create greater demand for medicines.


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Financial Highlights

Under terms of the agreement, Abbott will purchase the assets of Piramal's Healthcare Solutions business for a $2.12 billion up-front payment

with payments of $400 million annually for the next four years, beginning in 2011. The transaction will not impact Abbott's ongoing earnings

per share guidance in 2010. Abbott plans to fund the transaction with cash on the balance sheet.


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This transaction is subject to shareholder approval of Piramal Healthcare Limited and other customary closing conditions, and is expected to

close in the second half of 2010. This transaction is being conducted by a wholly-owned subsidiary of Abbott, resulting in full ownership of the

assets of Piramal's Healthcare Solutions business (Domestic Formulations).

Solvay:

About Solvay Pharmaceuticals

Solvay Pharmaceuticals is a research driven group of companies that constitutes the global pharmaceutical business of the Solvay Group.

These companies seek to fulfill carefully selected, unmet medical needs in the therapeutic areas of neuroscience, cardiometabolic, influenza

vaccines, gastroenterology and men's and women's health. Its 2010 sales were EUR 2.7 billion, and it employs more than 9,000 people

worldwide.

Acquisition by Abbott :

In February 2010, Abbott acquired Solvays pharmaceuticals business for EUR 4.5 billion ($6.6 billion) in cash, providing Abb ott with a large

and complementary portfolio of pharmaceutical products and a significant presence in key global emerging markets. The acquisition also

includes full global rights to the fenofibrate franchise. Currently Abbott has Solvay U.S. right to fenofibrate and pays royalties to Solvay.

Belgium-based Solvay pharmaceuticals will add more than $3 billion in annual sales, the majority outside the U.S. Solvay has significant

presence and infrastructure in key high-growth emerging markets, including Eastern Europe and Asia. Emerging markets are growing faster and

increasing in importance due to demographics, rising incomes and expanded treatment of chronic disease.


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The acquisition added approximately $500 million to Abbotts annual pharmaceutical R&D investment, providing Abbott with the opportunity

to further accelerate near and long term pharmaceutical growth.

The acquisition of Solvay Pharmaceuticals further diversifies Abbott pharmaceutical portfolio, expands their presence in key high-growth

emerging markets, enhances their investment in R&D and accelerates their long-term earnings-per-share growth outlook.

In anticipation of future market needs, Abbott ensures about the technologies, products, infrastructure and reach to serve patients globally and

continue to deliver sustainable industry-leading growth. These acquisitions, as well as the others they have announced contribute them to achieve

their long-term goal.

With this transaction Solvay Pharmaceuticals has found a new strong home, within a respected company with a solid and committed position in

the industry.

Solvay's pharmaceutical portfolio complements Abbott's presence and expertise in specialty markets such as cardiovascular disease,

neuroscience and gastroenterology. Solvay has treatments for Parkinson's disease, Mnire's disease (abnormality of the inner ear), vertigo, and

irritable bowel syndrome. Solvay also offers products to treat men's and women's hormonal health, and exocrine pancreatic insufficiency

(inability to properly digest food), which is associated with several underlying conditions including cystic fibrosis and chronic pancreatitis.

The acquisition also includes Solvay's vaccines business, which will provide Abbott entry into the expanding global vaccines market. Solvay has

a small molecular diagnostics unit that will become part of Abbott's diagnostics organization upon the transaction close.

Abbott's international pharmaceutical business has grown significantly over the past several years, driven by specialty products in developed

markets. In emerging markets where chronic disease is being treated more aggressively, the combined Abbott and Solvay portfolio of branded


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generics expands the global reach of these medicines. Solvay's business will also give us a platform to enter the attractive global vaccines

market.

Financial Highlights

The transaction will be approximately $0.10 accretive to ongoing earnings per share in 2010, accelerating to more than $0.20 by 2012,

increasing thereafter, all before one-time transaction-related items, which will be provided at a later date. These one-time transaction-related

items are expected to occur between 2010 and 2012. The transaction also includes payments of up to EUR 300 million if certain sales milestones

are met between 2011 and 2013.

Abbott plans to fund the transaction with cash currently on the balance sheet. This transaction is subject to customary closing conditions and

regulatory approvals and closed in the first quarter of 2010. As a result, the deal will have no impact on 2009 ongoing earnings per share. The

board of directors of both companies have approved the proposed acquisition. Barclays Capital served as an exclusive financial advisor to

Abbott on this transaction.


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STARLIMS

About STARLIMS

STARLIMS Technologies Ltd. (Nasdaq:LIMS) is a leading provider of laboratory information management systems (LIMS), with over 20

years of LIMS experience. The Company's flagship product, STARLIMS, improves the reliability of laboratory sampling processes, supports

compliance with domestic and international regulations and industry standards, and provides comprehensive reporting, monitoring and analysis

capabilities. STARLIMS software is used for quality assurance and control, testing and monitoring, and research and development in

government, manufacturing and life sciences organizations. With operations in the United States, Canada, the United Kingdom, Israel and Hong

Kong, the company serves over 500 organizations in 40 countries.

Acquisition by Abbott

In March 2010, Abbott acquired STARLIMS Technologies for $123 million, in cash, net of cash held by STARLIMS, providing Abbott with

leading products and expertise to build its position in laboratory informatics. A substantial portion of the fair value of the acquisition has been

allocated to goodwill and amortizable intangible assets.

The acquisition provides Abbott with leading products and expertise to build its position in laboratory informatics, an emerging and rapidly

growing field focused on helping to manage the increasing amount of data g enerated in laboratories. STARLIMSs advanced web-based

software applications help laboratories efficiently store, retrieve and analyze data and are designed for a wide variety of laboratory environments

operating across a number of scientific, industrial and clinical disciplines.


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STARLIMS gives Abbott access to innovative technologies and technical expertise for a long-term strategy in laboratory informatics. The

acquisition enables Abbott to provide a common informatics framework across all of their diagnostics businesses and equally important, which

helps to accelerate STARLIMSs growth strategy in the non-diagnostics market segments.

STARLIMS' advanced web-based technologies help Abbotts customers operate efficiently across the core laboratory, molecular and point-of

care segments of the global diagnostics market.

Healthcare informatics is the application of information management and technology to the planning and delivery of high quality and cost-

effective healthcare. Advanced informatics systems are becoming increasingly important to clinical laboratories as a means to automate the

retrieval, communication and management of medical and laboratory data and aid compliance with global regulatory and industry standards.

Informatics systems can help laboratories improve operating efficiency through process standardization, reduced labour costs and increased

capacity. Improved laboratory operations benefit physicians and patients through improved turnaround times and more consistent interpretation

of test results.

As Abbott integrates STARLIMS into its existing portfolio of laboratory information management products, the company continue to support

and expand the non-clinical market segments currently served by STARLIMS.

Under the terms of the agreement, Abbott acquired all outstanding equity of STARLIMS for $14 per share, for a total purchase price of

approximately $123 million.


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Facet biotech:

About Facet biotech:

Facet Biotech is a biotechnology company dedicated to advancing its pipeline of five clinical-stage products, leveraging its research and

development capabilities to identify and develop new oncology drugs and applying its proprietary next-generation protein engineering

technologies to potentially improve the clinical performance of protein therapeutics.


In April 2010, Abbott acquired the outstanding shares of Facet Biotech Corporation for approximately $430 million, in cash, net of cash held by

Facet. The acquisition enhances Abbotts early- and mid-stage pharmaceutical pipeline, including a biologic for multiple sclerosis and

compounds that complement Abbotts oncology program. A substantial portion of the fair value of the acquisition has been allo cated to acquired

in-process research and development that is accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation.

The new Abbott compounds include daclizumab - a Phase II investigational biologic intended to treat multiple sclerosis that is expected to move

into Phase III development in the second quarter 2010 - and oncology compounds in early- to mid-stage development that are being studied to

treat different types of cancer, including multiple myeloma and chronic lymphocytic leukemia.

Facet's depth of biologics experience and sophisticated antibody engineering platforms complement Abbott's current R & D programs in

oncology, immunology and other therapeutic areas.

The final step in the acquisition process was a short-form merger of Amber Acquisition Inc., a wholly-owned subsidiary of Abbott, with and into

Facet Biotech Corporation. As a result of the merger, all outstanding shares of Facet common stock not tendered in the cash tender offer (other


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than those as to which holders properly exercise dissenters' rights) were converted into the right to receive $27 per share in cash, without interest

and subject to any required withholding taxes.

Advanced medical optics:

In February 2009, Abbott acquired the outstanding shares of Advanced Medical Optics, Inc. (AMO) for approximately $1.4 billion, in cash, net

of cash held by AMO. Prior to the acquisition, Abbott held a small investment in AMO. Abbott acquired AMO to take advantage of increasing

demand for vision care technologies due to population growth and demographic sh ifts and AMOs premier position in its field. Abbott acquired

control of this business on February 25, 2009 and the financial results of the acquired operations are included in these financial statements

beginning on that date. The allocation of the fair value of the acquisition resulted in non-deductible goodwill of approximately $1.7 billion, non-deductible definite-lived intangible assets of approximately $900 million and net tangible assets of approximately $400 million. In addition,

Abbott assumed $1.5 billion of debt. Acquired intangible assets consist of established customer relationships, developed technology and trade

names and are amortized over 2 to 30 years (average of 15 years). In addition, subsequent to the acquisition, Abbott repaid substantially all of

the acquired debt of AMO.


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Visiogen:

In October 2009, Abbott acquired 100 percent of Visiogen, Inc. for $400 million, in cash, providing Abbott with a next-generation

accommodating intraocular lens (IOL) technology to address presbyopia for cataract patients. The allocation of the fair value of the acquisition

resulted in non-deductible acquired in-process research and development of approximately $200 million which is accounted for as an indefinite-

lived intangible asset until regulatory approval or discontinuation, non-deductible definite-lived intangible assets of approximately $24 million

and goodwill of approximately $200 million.

Evalve:

About Evalve, Inc. :

Founded in 1999 by The Foundry and Dr. Fred St. Goar, Evalve, Inc., headquartered in Menlo Park, Calif., has developed a proprietary system

which enables percutaneous repair of cardiac valves. The companys initial products are intended to reduce the risks, trauma and costs associated

with current open, arrested heart surgical options.

Previous major investors in Evalve include: New Enterprise Associates; Delphi Ventures; Split Rock Partners; Apothecary Capital; Cutlass

Capital; ABS Ventures / Kearny Venture Partners; Saints Capital; Three Arch Partners; Emergent Medical Ventures; and Integral Capital

Partners.


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Acquisition by Abbott

In 2009 Abbott acquired the outstanding equity of Evalve, Inc., the global leader in the development of devices for minimally invasive repair

of cardiac mitral valves.The acquisition provides Abbott with a presence in the growing area of non-surgical treatment for structural heart

disease, in which physicians use catheter-based devices to repair or replace basic structural components of the heart such as mitral and aortic

valves. The agreement includes an upfront payment of $320 million in cash, plus an additional payment upon completion of certain regulatory

milestones, for a total of up to $410 million.

This acquisition of Evalve provided Abbott with leading technology in the emerging field of minimally invasive heart valve repair and further

broadens. Evalve is on the cutting edge with its nonsurgical approach to treating structural heart disease. With this breakthrough mitral

valve repair technology, physicians were able to offer their patients a minimally invasive alternative to open heart surgery -- not unlike the

opportunity that stents provided more than two decades ago for the treatment of coronary artery disease. Mitral regurgitation, a condition that

prevents the mitral valve from closing completely, is the most common type of heart valve insufficiency in Europe and the United States, and

affects millions of people worldwide. Traditionally, mitral regurgitation is treated through open heart surgery. However, only about 20 percent of

the 600,000 patients diagnosed in the U.S. and Europe each year undergo surgery. Evalve's minimally invasive catheter-based MitraClip

system, used to clip the leaflets of the mitral valve together to reduce regurgitation, is the first commercially available treatment option approved

in Europe for non-surgical mitral valve repair for patients suffering from the effects of mitral regurgitation. The MitraClip system is an

investigational device in the United States and is currently in clinical trials.

By Combining Evalves first in class mitral valve repair technology with Abbott's global presence, commercial infrastructure and manufacturing

expertise help advance minimally invasive treatment options for the millions of patients with mitral regurgitation. Evalve looks forward by


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becoming a part of Abbott and working together to accelerate the business and expand global reach to patients around the world with Evalves

minimally invasive technologies.

Under the terms of the agreement, Abbott acquired the remaining 90 percent of outstanding equity of Evalve, Inc. that it does not already own

for an upfront payment of $320 million, plus a $90 million payment if certain regulatory milestones are met. The transaction does not impact

Abbotts previously issued earnings-pershare guidance of 2011. The transaction is subject to customary closing conditions, including antitrust

clearances. Abbott closed the transaction in the fourth quarter of 2011.

Ibis Biosciences, Inc. (Ibis):

About Isis Pharmaceuticals, Inc.

Ibis biosciences, inc. is a subsidiary of Isis pharmaceuticals and it is exploiting its expertise in RNA to discover and develop novel drugs for its

product pipeline and for its partners. The Company has successfully commercialized the world's first antisense drug and has 19 drugs in

development. Isis' drug development programs are focused on treating cardiovascular and metabolic diseases. Isis' partners are developing

antisense drugs invented by Isis to treat a wide variety of diseases. Isis is a joint owner of Regulus Therapeutics LLC, a joint venture focused on

the discovery, development and commercialization of microRNA therapeutics. As an innovator in RNA-based drug discovery and development,

Isis is the owner or exclusive licensee of over 1,600 issued patents worldwide.


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In January 2009 Abbott to expand Abbotts position in molecular diagnostics for infectious disease purchased Ibis Biosciences, Inc., an Isis

subsidiary, for a closing purchase price of $175 million. In addition to the closing purchase price, Isis received earn out payments from Abbott

tied to post-closing sales of Ibis systems, including instruments and assay kits.

In 2008, Abbott has acquired 100 percent of the outstanding shares of Ibis. Abbott invested $40 million in Ibis in exchange for approximately

18.6% of Ibis' outstanding equity. This investment, along with the $175 million paid at closing, resulted in a total acquisition price of $215

million plus earn out payments. A substantial portion of the fair value of the acquisition has been allocated to goodwill and amortizable

intangible assets, and acquired in-process research and development which is accounted for as an indefinite-lived intangible asset until

regulatory approval or discontinuation. The investment in Ibis in 2008 resulted in a charge to acquired in-process research and development. In

connection with the acquisition, the carrying amount of this investment was re valued to fair value resulting in recording $33 million of income,which is reported as Other (income) expense, net.

Abbott is the ideal company to move the Ibis technology into larger commercial markets, such as clinical diagnostics, where Ibis' technology can

revolutionize infectious disease detection.

This acquisition enabled Abbott to offer an innovative approach to the detection and characterization of a broad array of pathogens for the

management of infectious diseases.

Documents

Acquisitions by Abbott