Abbott Labs ( ABT - Analyst Report ) recently announced its collaboration with Johnson & Johnson’s ( JNJ - Analyst Report ) Janssen Biotech, Inc. and Pharmacyclics, Inc. to explore Abbott's proprietary FISH (fluorescence in situ hybridization) technology for further use.

Abbott’s FISH technology will be primarily investigated for developing a molecular companion diagnostic test.

The prime aim of this diagnostic test will be to identify patients with a genetic subtype of chronic lymphocytic leukemia (CLL).

FISH technology can identify whether excessive or scarce copies of a particular gene are present in the cells. It can also detect whether certain genes have rearrangements that activate disease progression. It is particularly useful for identifying genetic markers in solid tumors thereby enabling the diagnosis of cancer.

These CLL patients have a deletion within a specific chromosome and may respond to ibrutinib.

We remind investors that Janssen Biotech entered into a worldwide collaboration with Pharmacyclics, Inc in Dec 2011 to co-develop and co-commercialize ibrutinib for several B-cell malignancies, including chronic leukemia and lymphoma.

In 2011, the US Food and Drug Administration (FDA) cleared Abbott’s Vysis CLL FISH Probe Kit, which enables to determine prognosis for patients with CLL. Nonetheless, Abbott plans to use its Viysis CLL FISH Probe Kit only for determination of genetic marker status as per the co-development agreement among Janssen, Pharmacyclics and Abbott.

We note that Abbott separated its business into two publicly-traded companies on Jan 1, 2013 – one in diversified medical products and the other in research-based pharmaceuticals.

Abbott is keen to further develop its diversified medical products business with renewed focus. The stock current carries a Zacks Rank #4 (Sell). Large-cap pharma companies that currently look attractive include Eli Lilly ( LLY - Analyst Report ) and Bayer ( BAYRY - Analyst Report ) . Both are Zacks Rank #2 (Buy) stocks.