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player ready...The “atmosphere” may finally be right for Abbott Laboratories to finally sell its 50 percent stake in a Lake Forest drugmaker, says Abbott Chief Executive Miles White.
With Abbott shedding low-margin businesses to focus on higher growth, Wall Street is focusing on the next possible divestiture: Abbott’s TAP Pharmaceutical Products Inc. venture with Japan’s largest drugmaker, Takeda Pharmaceutical Co. of Osaka.
Abbott agreed last week to sell a large part of its diagnostic test-making business to General Electric Co. for $8.13 billion in cash. The deal is part of Abbott’s ongoing effort to shed low-margin businesses and focus on higher growth drugs and medical devices.
White talked openly recently about TAP and Abbott’s discussions with Takeda over unloading its 50 percent stake. The talks have been on and off in the past, but White said the relationship between the Japanese company and Abbott is cordial, something that Abbott and Takeda insiders say has not always been the case.
“The atmosphere is right if we can come to an agreement on structure,” White told analysts in a Jan. 18 conference call discussing strategy in the wake of the GE announcement. “Both of us would ultimately like to resolve it in some way. We just have not been able to come to a final conclusion.”
Some Abbott observers believe a decision to sell TAP could bring in several billion dollars.
Takeda also has a desire to increase revenue in a market such as the U.S., which unlike Japan does not have pharmaceutical price controls.
Some also believe Takeda would be able to gain cost efficiencies with its nearby U.S. headquarters, which opened a new building just south of Baxter International Inc. along the Tri-State Tollway in Deerfield. TAP has about 3,000 employees, most of whom are in the company’s sales operation.
For Takeda, “nothing has been decided yet regarding that matter,” said company spokesman Seizo Masuda. “The discussion about Abbott and Takeda regarding TAP has taken place for some years now; however, as in the past, we don’t share detailed information about [whether] the talks are ongoing or not.”
TAP has long been considered a likely divestiture of Abbott’s because sales growth of TAP’s Prevacid heartburn drug and prostate cancer drug Lupron have slowed in recent years in the face of increasing competition. Full-year 2006 sales for TAP were $3.3 billion, up only 2 percent over 2005.
Meanwhile, TAP has faced delays in getting other products to market.
For example, the FDA last summer said TAP’s experimental treatment for gout known as febuxostat needed more tests. TAP will begin a new six-month clinical trial of febuxostat this year, said TAP spokeswoman Amy Allen-Martin.
If TAP does win FDA approval for febuxostat, the company believes the drug will be the first new treatment for the painful arthritis-like condition in more than 40 years. Analysts project it could be on the market in 2009.
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