Abbott board paves way for split of company
(Reuters) - Abbott Laboratories (ABT.N) said on Wednesday that its board approved the planned split of its branded pharmaceuticals business into a separate company and that Abbott investors would receive one share of the new company's common stock for every share of Abbott stock they own.
The new entity, AbbVie, which will be an independent company with Abbott retaining no ownership stake, will begin trading on the New York Stock Exchange on January 2, under the ticker symbol ABBV, the company said.
Abbott will keep its medical devices, diagnostics and nutritionals businesses, as well as drugs that have lost patent protection.
Most of AbbVie's profit is expected to come from Humira, a nearly $9 billion-a-year rheumatoid arthritis drug whose sales continue to grow by leaps and bounds
Many industry analysts have expressed concern the new company will be too reliant on Humira and that the drug's sales growth could be crimped by new treatments - including Pfizer's recently approved pill Xeljanz.
AbbVie will also take ownership of Abbott's array of experimental drugs, including promising new hepatitis C treatments.
Richard Gonzalez, a long-time Abbott senior executive, will become CEO of the new company. One of his biggest challenges will be to successfully develop AbbVie's experimental drugs and acquire promising medicines that can lessen AbbVie's dependence on Humira.
Abbott shares rose slightly in after-hours trading, from their closing price of $64.57 Wednesday on the NYSE.