Abbott cutting 700 from workforce

(Crain's) — Abbott Laboratories announced today that it is cutting jobs, including in Illinois, as part of a restructuring effort.

The medical device and drugmaker said it will eliminate 700 jobs in the United States and Puerto Rico, according to the Chicago Tribune. "Fewer than 200" of those cuts will come from the Chicago area.
Abbott's workforce in the six-county Chicago area totals an estimated 13,000, according to Crain's list of the largest local employers. Its worldwide workforce is an estimated 90,000.

The job cuts announcement came after Abbott reported a 12 percent increase in fourth-quarter profit Wednesday, as the blockbuster anti-inflammatory drug Humira continued to dominate the company's performance with double-digit sales growth.

Company shares were down $1.19, or 2.1 percent, at $54.79 in midday trading.
In October, Abbott surprised investors and analysts with the announcement that it would spin off its branded drug business, including Humira. Company executives said the split would allow investors to separately value Abbott's businesses, which also include baby formula, generic drugs and medical implants.
Wednesday's results highlighted the rationale for the split, with top-selling drug Humira dominating the company's results, contributing $2.18 billion, or over 20 percent, of sales.

While Humira has been the key to Abbott's growth, it has also a weighed on the company's stock, overshadowing performance of its other businesses. The drug, which is used to treat psoriasis and rheumatoid arthritis, loses patent protection in 2016, and no obvious successor has appeared in the company's pipeline. The split-up frees Abbott from the risks and obligations of developing innovative pharmaceutical drugs, leaving the company with a more predictable business built around nutritional formula, generic drugs and heart stents.
Abbott earned $1.62 billion, or $1.02 per share, up from $1.44 billion, or 92 cents per share, in the prior-year period. Excluding one-time items the company earned $1.45 per share, up from $1.30 in the same period a year earlier. Total company sales grew 4.1 percent to $10.38 billion.
Analysts polled by FactSet expect fourth-quarter earnings per share of $1.44 on revenue of $10.59 billion.
For 2012, the North Chicago company expects to earn $4.95 to $5.05 per share, compared with the average analyst estimate of $5.02 per share.

The company's branded drug business posted sales of $4.78 billion for the period, an increase of 6.7 percent. The business, which includes the cholesterol drugs Trilipix and Niaspan among other treatments, is scheduled to become a separate business before the end of 2012. The new company will have revenue of roughly $18 billion.

Among Abbott's remaining businesses, generic drugs slipped 4.6 percent to $1.39 billion. Nutritionals rose 8.6 percent to $1.56 billion while sales of the company's stents and other heart devices were roughly flat at $826 million.

Abbott to cut 1,900 jobs

(AP) — Abbott Laboratories said Wednesday it would eliminate 1,900 employees to keep profits up, indicating that one of the pharmaceutical industry's few success stories of recent years is not immune to cost pressures squeezing the sector.

The maker of drugs and devices said the terminations involve U.S. marketing and manufacturing positions. The cuts, which represent about 2 percent of the company's work force, are expected to save the company $300 million in coming years. Abbott blamed the cuts on new fees and pricing pressures associated with the health reform law and a "challenging regulatory environment" at the Food and Drug Administration, which approves new drugs.

Abbott has steadily increased its revenue year after year, even as most of its pharmaceutical peers have watched sales fall as patents on blockbuster drugs expire. And while the company's multibillion dollar, anti-inflammatory drug Humira continued to deliver in the latest quarter, Abbott has stumbled in efforts to develop new therapies.

Last week the company halted research on a next-generation psoriasis drug after the FDA indicated additional clinical trials would be needed to win approval.

The company has also wrestled with high profile safety problems in the past year. It pulled its diet drug Meridia from the market in October because of heart risks, only one month after it recalled millions of containers of its best-selling Similac baby formula because of possible contamination from insect parts.

Abbott shares fell 93 cents to $47.03 in morning trading while the broader markets edged higher.

Despite these and other challenges, the company continued to deliver double-digit earnings and profit growth in the fourth quarter, meeting Wall Street's expectations.

Looking ahead to 2011, the company predicted earnings growth between 9 and 11 percent, just below analyst expectations. Abbott expects profit between $4.54 and $4.64 per share in 2011, while analysts expect $4.64 per share.

But Leerink Swann analyst Rick Wise said both those figures may be conservative.

"In 2011, Abbott could begin to realize more fully the benefits of the ongoing Solvay integration with potentially even more operating synergies than currently reflected in Street estimates and guidance," Wise stated in an investment note.

Abbott, based in North Chicago, Ill., earned $1.4 billion, or 92 cents per share, in the fourth quarter, down from $1.54 billion, or 98 cents per share, a year earlier. Excluding costs related to the acquisition of Solvay Pharmaceuticals and Piramel Healthcare Solutions, along with a partnership, Abbott said it earned $1.30 per share. Revenue rose 13 percent to $9.97 billion.

Analysts polled by FactSet expected profit of $1.30 per share on $9.87 billion in revenue.

Pharmaceutical sales drove revenue during the quarter, rising 23 percent to $5.94 billion. The company's rheumatoid arthritis and immune disorder drug Humira led the way with a 15.4 percent boost in sales to $1.88 billion.

Meanwhile, nutritional product sales fell 1 percent to $1.43 billion while diagnostic product sales rose 5 percent to $1.02 billion and vascular product sales rose 14 percent to $822 million.

For the full year, the company earned $4.63 billion, or $2.96 per share, down from $5.75 billion, or $3.69 per share, in 2009. Revenue rose 14 percent to $35.17 billion from $30.77 billion.