Abbott a Step Closer to FACT – Analyst Blog

Abbott (ABT) recently announced the expiry of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) for its cash tender offer for Facet Biotech Corporation’s (FACT) outstanding shares.

Abbott had announced its plans to acquire Facet earlier in March 2010. The company is acquiring Facet for $27 per share. The total purchase price is approximately $722 million, including Facet’s projected cash and marketable securities of approximately $272 million.

This acquisition should help enhance Abbott’s early and mid-stage immunology and oncology pipeline. Facet’s lead pipeline candidate, daclizumab, which is being developed in collaboration with Biogen Idec (BIIB), is being studied for the treatment of multiple sclerosis. Besides daclizumab, Facet has several compounds in its oncology pipeline that are being developed for different types of cancer, including multiple myeloma and chronic lymphocytic leukemia.

The acquisition is scheduled to close in the second quarter of 2010. The agreement with Facet is the latest in a series of deals executed by Abbott to strengthen its pipeline. Earlier this year, Abbott signed an exclusive worldwide licensing agreement with Pierre Fabre SA for the development and commercialization of a cancer compound, h224G11. Abbott also completed its acquisition of the pharmaceuticals business of Belgian company Solvay Group earlier this year.

Last year, Abbott acquired Advanced Medical Optics. Besides this, the company also acquired eye care companies Visiogen and Evalve, Inc., which focus on the development of devices for minimally invasive repair of cardiac mitral valves. Abbott also acquired global rights to a pain drug in 2009.

With these deals, we believe Abbott is looking to diversify its product portfolio so that it can reduce its dependence on Humira, which contributed $5.5 billion to sales in 2009. We currently have a Neutral recommendation on Abbott.