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Abbott Selling Developed Market Generics Portfolio

By BiotechDaily International staff writers
Posted on 29 Jul 2014
Abbott Laboratories (Abbot Park, IL, USA) has sold its developed market generic drugs business to Mylan (Canonsburg, PA, USA) in a deal worth USD 5.3 billion.

The sale to Mylan will be in the form of an equity ownership of a newly formed entity, to be named Mylan NV, in which Abbott will have a stake of 21%. The new entity will be based in the Netherlands to achieve tax savings. Mylan NV will combine Mylan's existing business and Abbott's developed markets pharmaceuticals business, which includes Europe, Japan, Canada, Australia, and New Zealand, as well as manufacturing facilities in France and Japan. The transaction will diversify Mylan's business and strengthen its commercial platform outside the US (the US sector is not included).

The assets, which are being acquired on a debt-free basis, include a portfolio of more than 100 specialty and branded generic pharmaceutical products in five major therapeutic areas—central nervous system/pain, cardio/metabolic, gastrointestinal, anti-infective/respiratory, and women's and men's health—and also includes several patent protected, novel, and hard-to-manufacture products with continued growth potential.

Abbott will retain its branded generics pharmaceuticals business and products in emerging markets, where demographics and growing healthcare systems are combining to create an increased rate of patient access to healthcare, and where the majority of healthcare products are paid for directly by the consumer. Abbott will also retain manufacturing facilities in emerging markets as well as those situated in the Netherlands, Germany, and Canada.

“This transaction provides Abbott with additional strategic flexibility as we continue to actively manage and shape our portfolio, reflecting our commitment to long-term, durable growth,” said Miles D. White, chairman and CEO of Abbott. “Our branded generics pharmaceuticals business will focus on emerging markets, where demographic changes and increasing access to healthcare are expected to drive sustainable growth.”

“We believe Mylan is uniquely positioned to realize improved financial performance and profitability from these assets by leveraging our integrated, efficient operating platform, more effectively distributing the portfolio across channels, and maintaining a greater strategic focus on key products,” said Heather Bresch, CEO of Mylan. “We have experience successfully integrating large, complex transactions such as this one, and we are confident in our ability to deliver the value inherent from this combination.”

Abbott does not expect to be a long-term shareholder in Mylan, and ultimately plans to redeploy the proceeds from the transaction to new opportunities in the devices and diagnostics sectors, with an emphasis on the diabetes, eye care, and vascular markets.

Related Links:

Abbott Laboratories
Mylan



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