AbbVie’s businesses were worth about $17.4 billion, based on 2011 sales, with a $3.4 billion bottom line. Abbott will retain its medical devices, diagnostics and nutrition units, which accounted for more than $21 billion in sales.
"The separation of our company into 2 distinct investment identities reflects long-term changes in the healthcare market that have led us over time to create distinctly different business models for these 2 businesses," CEO Miles White said in a letter to shareholders. "Both companies will have everything needed to be leaders in their respective industries on day 1 of independent operation."
Miles expects AbbVie to be a higher-margin business with a more intense research focus, while Abbott’s units will have a higher growth rate with more tendrils in emerging markets, White wrote.
The move received a mixed reaction from Wall Street, but has recently gained admiration from prominent analysts who see benefits to smaller, more focused companies in the health space.
Goldman Sachs analysts recently advised new Johnson & Johnson (NYSE:JNJ) CEO Alex Gorsky to think small in planning for the future, suggesting that healthcare goliath J&J may be worth more in pieces than as a whole.
Earlier this month Biomet Inc. announced that it’s exploring strategic options to spin out its 3i dental devices division, although it hadn’t made any final decisions to pursue a split just yet.
Theragenics announces $10M share repurchase program
Theragenics (NYSE:TGX) announced a $10 million modified "Dutch Auction" share buyback program for common stock. TGX shareholders will have the option to tender some or all of their shares at a price in the range of $2 to $2.40 apiece, and Theragenics will determine the price based on the number of shares tendered and the prices specified by tendering stockholders.
Syneron sinks on Spain speculations
Continued concerns about Spain’s bailout created uncertainty for Israel stocks, including for device maker Syneron Medical Ltd. (NSDQ:ELOS) . ELOS shares were down 1.5% to $10.52 around 12:00 p.m. today.
- Systagenix nabs wound diagnostics maker O2 Insights for an undisclosed amount
- Medical device software maker iMDsoft goes private with equity firm TPG Growth
GPOs: RF Surgical Systems signs contract with HealthTrust Purchasing
Washington-based RF Surgical Systems, maker of systems for the prevention and detection of retained surgical items, signed an agreement with HealthTrust Purchasing Group. Read more
- C8 MediSensors closes $19M preferred stock round
- Alphatec Spine expands credit facility to $40M, with $10 mezzanine
- Nasseo wins UCSD entrepreneur challenge top prize, $57k, for dental implants
- Seventh Sense Biosystems closes $10M Series A round for touch-activated phlebotomy systems
- JustRight Surgical raises $6.5M for low-power tissue-sealing devices
- Becton Dickinson & Co. (NYSE:BDX): Standard & Poor’s raises short-term rating to "A-1+"
- Hill-Rom Holdings (NYSE:HRC): Bank of America raises from "underperform" to "neutral," lowers price target from $24 to $23 on declining growth
- Hologic (NSDQ:HOLX): Standard & Poor’s maintains "BB" rating on Gen-Probe acquisition news
- Johnson & Johnson (NYSE:JNJ): JP Morgan raises from "neutral" to "overweight" rating, increases price target from $69 to $74; Leerink Swann maintains "outperform" rating; Jeffries upgrades from "hold" to "buy" rating, raises price target from $68 to $72
- Synergetics (NSDQ:SURG): Benchmark maintains "buy" rating, lowers price target to $7
- St. Jude Medical (NYSE:STJ): Morgan Stanley maintains "overweight" rating