Abbott spinoff Abbvie opens trading, shares of both gain
By David Roeder firstname.lastname@example.org January 2, 2013 7:26PM
Abbott Laboratories located in the 1400 block of Sheridan Road North Chicago. | Thomas Delany Jr.~Sun-Times Media
Updated: February 4, 2013 2:46PM
Abbott Laboratories and its corporate spinoff got a positive reception from investors Wednesday, the first day the companies’ shares were traded independently.
Prices for Abbott and the spinoff, AbbVie Inc., rose nearly 3 percent amid higher prices in the broader market.
Investors were buying the thesis that AbbVie, which owns the blockbuster anti-inflammatory drug Humira, has prospects for higher growth compared with the new Abbott.
With annual revenue of about $18 million, AbbVie shares closed Wednesday at $35.12, up 96 cents, or 2.8 percent.
Abbott, which now has $23 billion in annual revenue, has a lower share price. At Wednesday’s close of trading, it stood at $32.05, up 72 cents, or 2.3 percent.
Some financial Web sites didn’t catch up with the change immediately and erroneously listed Abbott shares as falling more than 50 percent.
Before the split, the stock traded at $65.50.
Analysts have given mostly good reviews to the split because it created companies that appeal to investors with different goals.
In a report to clients Wednesday, analysts at William Blair & Co. LLC said Abbott should enjoy sales growth through 2015 that’s 50 percent higher than its competitors’, mostly because it has higher penetration in the emerging markets of China and India. Blair has a bullish “outperform” rating on the stock.
Analysts at BMO Capital Markets initiated coverage of both companies with an “outperform” rating. They said they would be “opportunistic buyers” of AbbVie because Humira’s patent protection should last long enough for the company to develop new drugs.
AbbVie leaders and other employees from 40 countries celebrated the company’s launch by ringing the opening bell for 2013 trading at the NYSE Wednesday morning. A video feed from New York of the opening bell was shown to employees in Lake County.
“AbbVie launches with an outstanding portfolio, a solid pipeline and enthusiastic people who will serve patients and deliver growth,” said Richard Gonzalez, AbbVie chairman of the board and chief executive officer. “With those assets and a relentless focus on innovation we intend to create significant value for our shareholders.” AbbVie’s mailing address will be 1 N. Waukegan Road, North Chicago.
Abbott Laboratories retains the Abbott Park business address.