Abbott Spinoff AbbVie Begins Trading to Determine Value

Abbott Laboratories’ (ABT) spinoff began trading on a “when issued” basis, with investors valuing the new Abbott at $47.9 billion and the new drug company AbbVie Inc. at $55.3 billion.

The when-issued trading will set stock prices and values for the two companies when they officially split on Jan 1. Abbott when-issued shares, which are trading under the ticker ABT-W (ABT-W), began trading at $29.05 and rose 4.3 percent to $30.30 at 4 p.m. New York time. AbbVie when-issued shares, trading under the ticker ABBV-W (ABBV-W), opened at $37 and fell 5.4 percent to $35.

The secondary market for the when-issued shares is in parallel with regular Abbott stock, which fell less than 1 percent to $65.33. The Dec. 31 closing values of the when-issued shares will set the opening prices for the split companies when the break-up is complete and the two different stocks begin trading on Jan. 2.

Abbott is dividing the Abbott Park, Illinois-based company because the drug unit and other operations have grown into two distinct business lines, Chief Executive Officer Miles White has said. The split will enable investors to better value the two businesses, he said when the decision was announced last year. Stock for AbbVie, the drugmaker, will trade under the ticker ABBV while Abbott will keep its current ticker, ABT.

The company has sought to expand use of the anti- inflammatory injection Humira, the world’s best-selling medicine with $7.93 billion in revenue last year, with new indications beyond rheumatoid arthritis, such as ulcerative colitis and pediatric Crohn’s disease. Abbott also is testing drugs to treat hepatitis C and has a rheumatoid arthritis pill in development with Belgian drugmaker Galapagos NV.

Abbott is the world’s biggest manufacturer of drug-coated stents, including its top product Xience. The new Abbott will also run the current company’s medical-device, diagnostic equipment, baby food and generic drug businesses.

In October, the company announced that AbbVie will pay an annual dividend of $1.60 a share, while Abbott shareholders will get 56 cents a year. Abbott will have a tax rate of 21.5 percent, while AbbVie’s rate will be 22 percent.

To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net;

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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