UPDATE 3-Abbott Labs to buy Isis unit in $215 mln deal

(Adds company comment, analysts' comments, share movement)

By Vidya L Nathan

BANGALORE, Dec 17 (Reuters) - Drug-maker Abbott Laboratories (ABT.N) will buy smaller firm Isis Pharmaceuticals Inc's (ISIS.O) unit, Ibis Biosciences Inc, in a deal worth $215 million, to expand in the field of molecular diagnostics, the companies said, sending Isis shares up as much as 6 percent.

Abbott, which operates a medical diagnostic segment, will pay $175 million to buy Ibis. The suburban Chicago drug-maker had invested $40 million in the firm earlier this year.

Abbott spokesperson Don Braakman said the company did not see the deal impacting earnings per share in 2008 and 2009 and Abbott intended to retain all Ibis employees.

"Isis gets a better income statement from divesting Ibis. The unit was a loss for Isis and it was actually a contributing a larger loss to the entire company than what the drug development segment was producing," BWS Financial analyst Hamed Khorsand said.

BWS Financial's Khorsand and Boenning & Scattergood analyst Debjit Chattopadhyay see the deal being positive in terms of cash that Isis would be receiving and expect the company to focus in its pipeline after the deal.

"I am glad the sales has gone through because now Isis can focus on being a biotech company as opposed to being a biotech/hybrid-diagnostic company," Chattopadhyay said.

Abbott said it was interested in Isis' Ibis T5000 Biosensor System -- a research device capable of detecting infectious agents -- particularly, as it was capable of detecting hospital-acquired infections, a key area of interest for Abbott.

"This is a technology that we will be developing once the transaction closes. So our intention is to commercialize this technology," Braakman said.

He also added that Abbott would be looking to file for regulatory approval of T5000 in 2010 in the United States and launch the product in the following year.

Under the deal, Isis will also receive earn out payments from Abbott tied to post-closing sales of Ibis systems, including instruments and assay kits.

Abbott shares were down 2 percent at $52.28 Wednesday on the New York Stock Exchange, while those of Isis were trading up 73 cents at $12.82 on Nasdaq. (Editing by Pratish Narayanan, Jarshad Kakkrakandy)