AbbVie and Abbott under StockCall Scrutiny: Major Drug Manufacturers Look to Emerging Economies
LONDON, January 28, 2013 /PRNewswire/ --
Last year, the U.S. Supreme Court upheld President Obama's Affordable Care Act, which is expected to have a significant impact on major drug manufacturers. In order to minimize the impact of Affordable Care Act, drug manufacturers have implemented new strategies. One such company is Abbott Laboratories (NYSE: ABT), which recently spun off its proprietary drug business into AbbVie (NYSE: ABBV). StockCall has compiled comprehensive technical analysis on these two drug companies, and these reports are available for free at http://www.stockcall.com/report
Implications of Affordable Care Act
The Patient Protection and Affordable Care Act (PPACA), which was signed into a law by President Obama in his first term, represent a major overhaul of the U.S. healthcare system.
The Affordable Care Act is expected to have a significant impact on major drug manufacturers in the U.S. While drug manufacturers can expect new business as a result of PPACA, they are also likely to see increased costs. According to some estimates, the act will cost drug manufacturers over $80 billion in the next 10 years. Although higher drug sales due to expanded coverage will offset some of these costs, it will not be sufficient. This has led major drug companies re-think their strategy.
Abbott looks to Emerging Economies
Abbott Laboratories is looking to minimize the impact of Affordable Care Act in the U.S. by focusing on emerging markets. Earlier last week, the Illinois-based company reported its fourth quarter financial results. Excluding one-time items, the company reported a profit of $1.51 per share. Download the complete technical analysis on Abbott at http://www.StockCall.com/ABT012813.pdf
In a conference call with analysts following the release of quarterly results, Abbott CEO Miles D. White said that the global population is growing and living longer and the company sees significant opportunities ahead. Mr. White believes that the company's mix of diversified healthcare businesses and pipeline is favorably aligned with key healthcare and emerging market trends and well positioned to deliver top-tier growth this year.
The New Abbott
Earlier this year, Abbott completed the separation of its research-based pharmaceutical business. The new independent biopharmaceutical company, AbbVie Inc. [Free Report on ABBV] [(1)], began trading on the New York Stock Exchange under the ticker symbol ABBV. Abbott had announced the spin off back in October 2011 as the company's business evolved into two different investment identities.
AbbVie will operate as a research-based specialty biopharmaceutical company. The company already has a broad portfolio of medicines and a pipeline of breakthrough therapies. The new Abbott, meanwhile, will focus on four businesses, which include diagnostics, medical devices, nutritionals and branded generic pharmaceuticals. The revenue from these businesses is well balanced in terms of geography, with about 40% of the revenue generated from the fastest-growing economies of the world, including Brazil, China, India and Russia. By 2015, Abbott expects these markets to account for 50% of its sales.
Commenting on the spin-off, Mr. White earlier this month said that Abbott has taken the most transformative action in its 125-year history. He added that the company has had enduring success precisely because of reinventing itself for changing times and creating new ways to serve millions of patients, customers, communities and shareholders who depend on the company.
The new Abbott certainly is well-positioned to deliver growth.
- AbbVie Inc. Technical Analysis [ http://www.StockCall.com/AbbVieInc012813.pdf ]
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