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Jan 2, 2013

AbbVie Spins Off from Abbott

  • Abbott Laboratories today spun off its branded biopharmaceutical operations into AbbVie, an $18 billion-a-year business focused on building a broad portfolio anchored by what had been Abbott’s top-selling drug, the anti-TNF biologic Humira.

    Humira is likely to account for about half of AbbVie’s total sales, having generated nearly $6.6 billion during the first three quarters of 2012, up 14% from about $5.8 billion in Q1 through Q3 of 2011. For all of 2011, the drug racked up $7.9 billion in sales, up 21% from $6.5 billion in 2010.

    Earlier this year, Abbott said its scientific experience with Humira served as a strong foundation for continuing research in immunology—R&D that AbbVie is expected to continue since the spinoff’s portfolio includes several immunology and virology drugs. In addition to Humira, AbbVie’s pipeline includes Synagis, the respiratory drug developed by MedImmune; as well as Lupron, Creon, Synthroid, Kaletra, Norvir, Zemplar, and AndroGel.

    Of those drugs, AndroGel (testosterone gel) finished second highest in sales for Abbott, with $811 million in the first nine months of 2012, up 27% from 2011 when AndroGel was launched. Next highest was the HIV-1 drug Kaletra (lopinavir/ritonavir), which generated $763 million during January–September 2012, down 13.5% from $882 million in Q1–Q3 2011. Abbott has blamed declining sales of Kaletra on the quadrupling in price of one of the combination drug’s two components, Norvir. However, Kaletra poses a more basic challenge for AbbVie going forward, since the combo drug’s patent is set to expire this year, clearing the way for more competition from generics.

    Lupron—whose indications range from advanced prostate cancer in men, to endometriosis or fibroid tumors in women—made $589 million in the first three quarters of 2012, down 2.2% from $602 million for the first nine months of 2011.

    AbbVie said it will generate long-term growth through its pipeline of more than 20 mid- to late-stage clinical programs, as well as new drugs to be discovered, for a broad mix of diseases that include Hepatitis C, rheumatoid arthritis, psoriasis, multiple sclerosis, Alzheimer's disease, Parkinson's disease, spondyloarthropathies, multiple myeloma, and endometriosis.

    "AbbVie launches with an outstanding portfolio, a solid pipeline, and enthusiastic people who will serve patients and deliver growth," said Richard A. Gonzalez, AbbVie’s chairman and CEO, in a statement.

    The spinoff will be headquartered in North Chicago and employ 21,000 people worldwide, doing business in 170 nations. Gonzalez previously served as executive vp of Abbott’s Pharmaceutical Products Group, a post he held since 2010. Soon after his appointment was announced, Gonzalez survived the embarrassment of disclosures that he had not received bachelor’s and master's degrees once claimed in his biography, after Abbott’s chairman and CEO Miles D. White publicly stated he and Abbott’s board were confident in Gonzalez’ ability to lead AbbVie.

    AbbVie’s launch narrows Abbott’s focus to diagnostics, medical devices, nutritionals, and branded generic pharmaceuticals. The newly-slimmed Abbott will begin its 125th year in 2013 with about $22 billion in revenues generated in 150 countries.

    “We have had enduring success precisely because of what we're doing now—reinventing ourselves for changing times and creating new ways to serve the millions of patients, customers, communities, and shareholders who depend on us,” Miles D. White, Abbott’s chairman and CEO, said in a statement.


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