At AbbVie, new name, same team

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The latest SEC filing from Abbott Labs shows that even as the firm splits in two, the players will, for the most part, remain the same.

The executive lineup includes a host of familiar faces: Richard Gonzalez, 57, as chairman and CEO; Laura Schumacher, 48, as general counsel and corporate secretary; William Chase, 44, as CFO and Timothy Richard, 45, as chief human resources officer. All are current Abbott employees.

Although the company announced its intent to split in October 2011, this month's SEC filing presents AbbVie as a company that has been there all along, as seen by its Humira (adalimumab) origin story that says AbbVie made the rheumatoid arthritis drug global in 2003. It also lays out retrospective revenues for the nascent company and says AbbVie had $17.4 billion in sales last year.

Continuity also comes with baggage – of note is the May 7, 2012 Corporate Integrity Agreement Abbott entered into with the Office of the Inspector General for promoting off-label uses for its bipolar, epilepsy and migraine drug Depakote. Abbott settled lawsuits with the US and 49 states, but the independent AbbVie will bear the brunt of compliance. The CIA agreements will be in force for the next five years.

The two companies will divide their responsibilities as follows: Abbott will house medical devices, nutritional products, diagnostics and branded-generic pharmaceuticals sold outside the US. AbbVie will focus on research. Its start-up drug portfolio includes RA drug Humira, HIV drug Kaletra (Lopinavir/ritonavir), testosterone treatment AndroGel (testosterone) and prostate cancer drug Lupron (leuprolide acetate).

Barclays analyst Anthony Butler said in a research note that the 10-12B filing provides a peek at what's to come, but that it “stopped short of providing granular details of capital structure.” Butler also noted that the new company has some challenges waiting for it, among them, the 120% freefall in sales of Depakote from $300 million in 2009 to $150 million last year, which was triggered by generic competition. Butler also said Tricor, Niaspan and Triplix are all hitting their patent expiration dates. Butler noted this means Humira will have to work even harder – he expects the drug to account for 75% to 85% of AbbVie's net in 2013 and 2014.
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