Abbott plans to wrap up St. Jude Medical deal

abbott announced it intends to close the acquisition of St. Jude Medical, Inc. recently. The announcement follows receipt of all regulatory clearances necessary for closing. 

The transaction establishes Abbott as a leader in the medical device arena and provides expanded opportunities for future growth. The addition of St. Jude Medical is an important part of the company's ongoing effort to develop a strong, diverse portfolio of devices, diagnostics, nutritionals and branded generic pharmaceuticals.  

"We continue to deliberately shape our business for long-term success by securing leadership positions in attractive markets and focusing on customer needs," said Miles D. White, chairman and chief executive officer, Abbott. "This philosophy has served as the foundation for significant and sustainable value creation for our shareholders. The addition of St. Jude Medical creates one of the broadest medical device portfolios in the world and provides a steady stream of new technologies and therapies for many years to come."

St. Jude Medical's strong positions in fast-growing areas such as atrial fibrillation, heart failure, structural heart and chronic pain complement Abbott's leading positions in coronary interventions and mitral valve disease. Together, the company will compete in nearly every area of the $30 billion cardiovascular market and hold the No. 1 or 2 positions across large and high-growth cardiovascular device markets. This leading combined portfolio will have the depth, breadth, scale and innovation to help patients restore their health, improve outcomes and deliver greater value to customers and payors. Furthermore, the acquisition balances and strengthens the Abbott portfolio, which includes leading positions across all of its four core businesses. 

Abbott will have a powerful pipeline across cardiovascular and neuromodulation patient care ready to deliver next-generation medical technologies and offer improved efficiencies for health care systems around the world. In fact, Abbott will continue to bring numerous new products to key markets during the coming years, including:

EnSite Precision (which received US FDA approval this month) next-generation cardiac mapping system to visualize and navigate catheters in the heart during ablation procedures

ConfirmRx Implantable Cardiac Monitor to help physicians remotely diagnose and treat the most difficult to detect cardiac arrhythmias

HeartMate 3, which offers physicians more options for patients with advanced stage heart failure

Portico Transcatheter Aortic Heart Valves for patients with severe aortic stenosis – the narrowing of the aortic valve that obstructs blood flow from the heart

Proclaim DRG system and other stimulation waveform technologies to provide more options for patients with chronic pain

Absorb, the world's first bioresorbable coronary stent and MitraClip, the world's first transcatheter mitral-valve repair device in additional countries.

"Customers today want partners who offer breakthrough technologies along with a broad portfolio of solutions to help them better care for their patients," said White. "Our powerful and complementary medical device portfolio and industry-leading new product pipeline will help us be that partner, uniquely positioning us to win in the marketplace."

Together, the combined cardiovascular and neuromodulation portfolio has annual sales of approximately $8.7 billion.

The acquisition of St. Jude Medical is expected to be accretive to Abbott's adjusted earnings per share in the first full year and increasing thereafter, with approximately 21 cents of accretion in 2017 and an estimated 29 cents in 2018. The combination is anticipated to result in annual pre-tax synergies of $500 million by 2020, including both sales and operational benefits.


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Abbott to set up innovation hub in India

Abbott has its existing innovation and development centres in Chile and Columbia for the regional needs in Latin America and one in Russia.

Mike Warmuth, Executive VP, Established Pharmaceuticals division of Abbott said the proposed investments will result in doubling of its local scientific manpower

Global drug maker Abbott is setting up an innovation and development center (I&D) in Mumbai aimed at developing new drug formulations, new indications, dosing, packaging and other differentiated offerings to feed into its global branded generics business that clocked sales of $3.7 billion last year. The centre will act as a “hub” and ship products to at least 30 countries that will further develop the products to suit local needs. Abbott officials did not divulge the amount it is planning to invest.

Speaking to ET, Mike Warmuth, Executive VP, Established Pharmaceuticals division of Abbott said the proposed investments will result in doubling of its local scientific manpower like packaging technologists, formulation development specialists and clinicians. The centre will also have a pilot scale plant, he added. “We are investing in innovation and scale and we are doing it in areas where people have needs. It is not about getting sales for the sake of getting bigger,” Warmuth, who is based in Basel, Switzerland, told ET on his second trip to India in the last two weeks.

Abbott has its existing innovation and development centres in Chile and Columbia for the regional needs in Latin America and one in Russia. The Indian I&D hub is expected to become its biggest center in the next few years.

The drugs-to-devices giant drew over a fifth or $850 million (Rs. 5673 crore) of its global branded generics business from India in 2015. Warmuth described India as a “cornerstone of success” making specific reference as a “talent exporter” and how it helped Abbott gain a scientific edge in its other countries of operations.

Warmuth said he expects the India business to outperform the market consistently as in the case of its other 15 priority markets that together contribute 75% of the total sales. “We do the heavy lifting, providing products at a rate that is affordable and not price gouging,” he noted. He said his company will explore about 20 to 30 products that are likely to come off-patent in near future. Beyond that, Warmuth said part of his “model” includes in-licensing drugs that may include biosimilars. It exists in the “realm of the possibility” but not necessarily of a big scale in India.

Abbott is uniquely positioned in the global branded generics business. It carved out the business and separated AbbVie, its innovation products business. Abbot has been among the most aggressive investors in India. Last year in one of the biggest deals in the real estate space, it acquired commercial property in Mumbai’s business district Bandra Kurla Complex at Rs 1479 crore.

The drug maker had leapfrogged to the number one position India after it snapped up Piramal Healthcare’s prescriptions business for $3.7 billion in 2010. Last year Abbott slipped to second position with Sun Pharma acquiring Ranbaxy to gain the top spot.

Asked about the overall regulatory and economic environment in India, Warmuth said the regulators are trying to do the right things but he maintained it would be good to see the environment a little more stable when making investment decisions. “Overall that does not really change our view on the market itself,” Warmuth added.

 Source: etimes

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