Back to top

Analyst Blog

Abbott Laboratories (ABT - Analyst Report) recently announced that the company has separated its research-based pharmaceuticals business by creating a new company – AbbVie (ABBV - Analyst Report). 

The decision to spin off the business was taken back in October 2011 when Abbott decided to separate its business into two publicly traded companies – one in diversified medical products and the other in research-based pharmaceuticals.  
The research-based pharmaceutical company, AbbVie, includes proprietary pharmaceuticals and biologics including products like Humira, Lupron, Synagis, Kaletra, Creon and Synthroid. The business generated sales of approximately $17.4 billion in 2011 while sales are expected to exceed $18 billion in 2012. 
The diversified medical products company, with estimated sales of about $23 billion, includes Abbott’s branded generic pharmaceutical, devices, diagnostic and nutritional businesses. 
The existing shareholders of the parent company generally get new shares in the subsidiary when the company spins off one of its business into a separate company. The subsidiary becomes a separate legal entity with its own management team and board of directors. 
On Nov. 28, 2012, Abbott declared a special dividend distribution of all outstanding shares of AbbVie common stock. The shareholders of Abbott received one share of AbbVie common stock on Jan. 1, 2013 for every one share of Abbott common shares held as of close of business on Dec. 12, 2012. 
The company is looking to ensure growth through this split. We are positive on the split which should allow the two separate entities to perform in a more focused manner. 
As expected, the news was well received by investors with Abbott’s shares increasing 2.27% in regular trading to close at $32.05. 
We currently have a Neutral recommendation on Abbott, which carries a Zacks #3 Rank (Hold). Right now, Allergan, Inc. (AGN - Analyst Report) looks attractive with a Zacks #2 Rank (Buy). 

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%