August 27, 2015
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – Abbott Laboratories will not pursue a deal to acquire St. Jude Medical Inc. , contrary to earlier reports, Reuters reported this morning.
Chicago-based Abbott nixed any acquisition rumors this morning, Reuters said.
Citing anonymous sources “familiar with the matter,” several media outlets, including Reuters, the Irish Times and the Street Insider, reported Abbott was preparing to make a $25 billion bid for the medical device maker. Street Insider reported Abbott had been working with several financial advisers at J.P. Morgan and Citi to line up the financing for the deal.
Miles White, Abbott’s chief executive officer, has a solid reputation as a dealmaker. Abbott’s earnings have increased since it spun off its pharmaceutical unit AbbVie .
In his 13 years helming Abbott, White has been behind several big deals, including the 2006 acquisition of Guidant‘s coronary stent business for $4.5 billion and the $6.9 billion purchase of Knoll Pharmaceuticals in 2001, Chicago Business said. The 2001 acquisition of Knoll placed Humira, which treats a range of ailments, including arthritis and Crohn disease, into Abbott’s portfolio, although, Humira went into AbbVie’s pipeline in 2012 when the company became separate.
Earlier this year, White said he was interested in pursuing a deal in the medical device arena, which helped spur the rumors of the St. Jude acquisition. In April, Debbie Wang of Morningstar Inc. told Chicago Business that Abbott, while having a broadly diversified portfolio, lacked strength in its medical devices pipeline.
Since the 2012 spinoff of AbbVie, Abott has focused on increasing its generic-drug offerings in emerging markets, most particularly China, as well as adding new technology to the company’s device and diagnostics businesses, Bloomberg Business reported in May. Earlier this year Jeff Jonas, a fund manager at Gabelli, told Bloomberg White could be eying St. Jude, which has a value of about $20 billion, to transform Abbott into a “cardiovascular powerhouse.” Another potential acquisition target for Abbott is 161404, which could also boost Abbott’s cardiovascular business, Igor Golalic of Diamond Hill Capital Management, told Bloomberg.
Just two months after those analysts talked about Abbott boosting its cardiovascular offerings, White engineered a $250 million deal to purchase Tendyne Holdings, Inc., a private medical device company focused on developing minimally invasive mitral valve replacement therapies. At the same time, Abbott also acquired Cephea Valve Technologies, a private company developing a catheter-based mitral valve replacement therapy. Financial terms of that deal were not disclosed.
were up slightly this morning, trading at $45.10 per share. was up as well this morning on news of the rumor of the bid. St. Paul, Minn.-based St. Jude was trading at $69.34 this morning, although in premarket trading this morning the stock had jumped about 15 percent to $79.69 per share.
Abbott has increased its value through smart investments, including the backing of Mylan NV’s deal making earlier this year. Abbott is the largest shareholder in Mylan, and the company’s stake has increased in value as Mylan sought an acquisition of Perrigo Company and fended off Teva Pharmaceutical Industries Ltd. ’s takeover attempts.
