Boston, MA 10/24/2013 (wallstreetpr) – An investigation has been launched by a law firm into potential violations of securities laws concerning the demerger of Abbott Laboratories (NYSE:ABT) and AbbVie Inc (NYSE:ABBV). Abbott had announced the demerger in October 2011 as the businesses had evolved in two separate entities. Abbott would continue to focus on drug manufacturing and marketing while AbbVie would concentrate on its research based pharmaceutical business. The company announced on January 02, 2013 that the separation had been completed. Abbott closed at $37.23 per share while AbbVie closed at $48.33 per share at the end of trading on October 23, 2013. The move was seen as a good strategic inittiave as Abbott would be shielded from patent expiration of AbbVie’s top selling drug, Humira. The patent is due to expire in 2016. It also meant that Abbott sacrificed growth over stability, by concentrating on businesses like nutritional products and medical devices.
Abbott is already facing several lawsuits regarding the marketing practices adopted in sales of Depakote. Depakote is an anti-seizure medication and its use during pregnancy resulted in birth defects. The company has also been issued a putative class action in California over illegal recording of customer’s conversations without their permission.
Abbott had announced good quarterly results on the back of strong demand for its diagnostics devices. Revenues were $5.37 billion, a rise of 2% over the same period last year. Revenues in dollar terms were affected by a strong dollar, on same dollar rates, the rise would have been 4.3%. The third quarter earnings were $773 million translating to $0.49 per share. Sales of nutritional products were $1.64 billion. Sales were affected due to unfounded fears of contamination in one of the products in China and Vietnam. This cost the company approximately $90 million revenues in the third quarter. Diagnostics contributed to $1.13 billion in revenues, Medical devices contributed $1.34 billion, and Established Pharmaceuticals division contributed $1.24 billion. The company also announced a dividend increase of 57%.
