Is Abbott Planning an Acquisition?
Abbott Laboratories Inc., a historically conservative giant in the global health-care field, is titillating Wall Street with expectations of acquisitions sometime soon.
Since a younger chief executive was installed at Abbott in January, Wall Street has seen signs of new energy in the company, which makes everything from baby formula to drugs to blood-testing devices but rarely makes a big public splash.
“They have been the definition of conservative,” said analyst Glenn Reicin of Morgan Stanley Dean Witter & Co. “Things are for sure changing.”
Abbott’s stock has been hovering near its 52-week high, closing Tuesday at $50.81, up 13 cents, on the New York Stock Exchange.
Rumors of all sorts of possible targets have swirled through the stock and options markets this year, most recently centering on medical device firm Boston Scientific Corp. Boston Scientific calls--contracts giving the right to buy stock at a specific price--have been active. Company officials could not be reached for comment.
Analysts have said Abbott’s drug pipeline is thin and could use support, leading to talk of a deal in the pharmaceutical industry.
In January, Abbott Park, Ill.-based Abbott quietly suspended its stock repurchase program, signaling to many analysts that it was gearing up for a stock swap.
Abbott’s chief executive, Miles White, 43, joined the company in 1984 and had been head of the diagnostics division. Former CEO Duane Burnham, who retired at the end of last year, preferred to grow the company internally and through licensing agreements.
The company, which derives about 30% of its $12.5 billion in annual sales from pharmaceuticals, has some well-known drugs, including the antibiotic Biaxin. But nothing on the order of Eli Lilly & Co.’s Prozac antidepressant or Pfizer Inc.’s Viagra impotence blockbuster is in the works.
Abbott has declined to comment on the acquisition speculation. Spokeswoman Rhonda Luniak confirmed the suspension in the stock repurchase program, saying it aimed “to allow us greater flexibility.”
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