Magazine
#12. Abbott Laboratories
100 Abbott Park Rd.
Abbott Park, IL 60064
Tel: (847) 937-6100
Fax: (847) 937-9555
www.abbott.com
| Headcount | 65,000+ | |
| Year Established | 1888 | |
| Pharma Revenues* | $13,300 | +16% |
| Total Revenues* | $22,779 | +14% |
| Net Income | $3,372 | +4% |
| R&D Budget | $1,821 | +7% |
* Includes TAP Pharmaceutical Products JV income
| Drugs Approved/Launched | |
| Drug | Indication |
| humira | ankylosing spondylitis (EU), psoriatic arthritis, early rheumatoid arthritis |
| depakote ER | mania in bipolar disorder |
| kaletra | HIV, tablet form |
| zemplar | kidney disease, caplet form |
| Drugs Pending approval | |
| Drug | Indication |
| humira | ankylosing spondylitis (U.S.) |
| Drugs in Phase IIB and Beyond | |
| Drug | Indication |
| febuxostat | gout |
| adalimumab | chronic plaque psoriasis, ankylosing spondylitis, Crohn’s disease |
| depakote ER | adolescent migraine, dementia |
| abt-335 | dyslipidemia |
| divalproex sodium ER | bipolar I or bipolar II depression |
| clarithromycin | Crohn’s disease |
| Top Selling Drugs | |||
| Drug | Indication | Sales | (+/- %) |
| humira | rheumatoid arthritis | $1,400 | 64% |
| mobic* | osteoarthritis | $1,232 | 108% |
| depakote | bipolar disorder | $1,096 | 7% |
| biaxin | antibiotic | $1,065 | -10% |
| kaletra | HIV/AIDS | $1,005 | 12% |
| tricor | cholesterol | $927 | 19% |
| ultane/sevorane | anesthetic | $874 | 13% |
| synthroid | hyperthyroidism | $554 | -20% |
Account for 61% of total pharma sales, up from 59% in 2004.
* Last year recording revenue for Mobic.
PROFILE
Abbott continued to diversify in 2005, transitioning away from a reliance on pharma sales and building its Medical Products division. The company posted tremendous growth in drug revenues in 2005, but a good amount of that derived from Mobic, which fell out of Abbott’s lineup in 2006.
In June 2005, Abbott’s agreement with Boehringer-Ingelheim for Mobic converted from co-promotion to distribution. This led to large payments back to BI, and reduced Mobic’s margins severely. In January 2006, Abbott ceased to distribute Mobic, Flomax and Micardis, and instead will receive a commission based on U.S. sales. While revenues will drop (Mobic posted $1.2 billion in 2005), the company’s margins on its remaining sales will improve. Fortunately, Humira is carrying its weight in its third full year: +39% to $392 million in 1Q06. The company predicts that Humira will reach $1.9 billion in 2006 sales.
With the loss of Mobic, generic competition wearing down Biaxin and Synthroid sales, and a key Depakote patent expiring in 2008, Abbott could use a major new release to complement Humira. Tricor and Ultane are on a pace to cross the billion-dollar mark in 2006, but prostate cancer treatment Xinlay was rejected by the FDA in September 2005. Abbott is working on a new submission for the drug, which analysts once predicted could be a billion-dollar product.
Depart I Will From Old Brazil . . .
When Abbott complained about the volatility of the pharma business, it wasn’t just talking about pipeline failures. Last summer, Abbott was forced into a major confontation with Brazil’s health ministry, which threatened to strip Abbott’s patent for HIV drug Kaletra, license it generically, and even start competing with Abbott in other markets.
The flashpoint was in June 2005 when Brazil’s outgoing health minister announced that, under the World Trade Organization’s intellectual property agreement, Brazil could approve domestic production of generic versions of patented drugs during emergency public health situations, if the country failed to reach a pricing agreement with the patent holder. Brazil’s rhetoric swelled to the point at which it threatened to sell cheap, generic Kaletra to other “developing” countries.
Eventually, the two parties reached an agreement in which Abbott lowered the cost of Kaletra (already the lowest outside of Africa) and promised to manufacture the drug inside Brazil, starting sometime between 2009 and the drug’s patent expiration in 2015.
Pharma Out, Device In?
So how is Abbott dealing with the demands of the pharma industry? By empahasizing its Medical Products (device and diagnostics) business! The company has spent years building its device business, and capped it off with a major acquisition initiated in January 2006.
Abbott’s big buy was the purchase of Guidant’s vascular business. Abbott spent $4.1 billion for the unit, along with a pair of $250 million milestones for approval of Guidant’s drug-eluting stent in the U.S. and Japan, a $900 million loan, and $1.4 billion in Guidant stock. The acquisition concluded in April 2006.
| THE LOWE DOWN Now, Abbott is a strange beast. They're probably the only company up this high on such a list that hasn't had a megabillion dollar drug or two in their engine room to put them there. Nope, they've been doing it the old-fashioned way, selling all kinds of medium-level stuff all over the place, including an awful lot of diagnostics and the like. It keeps them out of the papers (well, except when they're arguing about the pricing of HIV medication) but it also keeps them from the risks of going over the cliff with a single huge patent expiration. But perhaps that's about to change. They seem to be doing mighty well with their Humira antibody, which looks like it's going to break all the company records. There are worse problems to have, but it does make you wonder how the company will deal with finally having a blockbuster. And it also brings up the standard party-pooping question: what do they do after that? That'll be interesting to watch over the next few years, because (at least from the outside) the company's drug pipeline isn't particularly full. Hard landing, or soft? Good luck, guys! Don't spend it all in one place. . . --Derek Lowe |
Said chairman and chief executive officer Miles D. White, “The combined Abbott and Guidant business offers a broad line of leading coronary and endovascular products, a pre-eminent sales force, and global manufacturing operations, as well as a state-of-the-art R&D organization, which is developing innovative technologies and devices such as the Xience V and ZoMaxx drug-eluting stents.”
In what may be another sign of the times, Jeffrey M. Leiden, M.D., Ph.D. stepped down as president and chief operating officer of the pharmaceutical products group in March 2006. The company unified that post with the Medical Products group and named Richard A. Gonzalez, who was president and chief operating officer of that unit, as president and COO for all operations.
I’m Still Here!
This isn’t to say Abbott’s getting out of the drug business. The company is still committed to developing its existing products and moving new ones through the pipeline. In October 2005, Humira received U.S. approval for treatment of psoriatic arthritis, and received EMEA approval for ankylosing spondylitis in June 2006. The company also presented positive results from its clinical trial of Humira against Crohn’s disease.
In April 2006, Abbott signed a five-year discovery pact with Myriad Genetics. Myriad will evaluate differences in DNA and the RNA expression between thousands of individuals to identify the genetic basis of a variety of diseases, and Abbott will advance those genes through its chemical genomics platform to identify targets and leads for drug discovery. Myriad will receive 40% of those targets and Abbott will keep the remaining 60%.
But most of Abbott’s drug news appears to be low key. The company has spent a great deal more time publicizing its Medical Products unit than its drug pipeline. Patterning its strategy after Johnson & Johnson (minus the enormous consumer unit) may give Abbott an advantage in the years ahead, when the line between medical devices, diagnostics and drugs grows even blurrier.
