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Abbott Spinoff Unlikely to Attract Takeover Bid, Bernstein Says

Abbott Laboratories’ prescription-drug spinoff may fail to attract a takeover bid from a pharmaceutical company because the business doesn’t offer enough potential growth, Sanford C. Bernstein Co. analysts said.

Revenue is unlikely to increase much at Abbott’s drug business in coming years as products lose patent protection, the analysts, including Tim Anderson in New York and Jack Scannell in London, wrote in a research report.

Humira, an anti-inflammatory with $6.5 billion in annual sales, is Abbott’s biggest-selling product. The drug may face competition in the second half of 2012 if a new treatment from Pfizer Inc., tofacitinib, reaches the market, the analysts wrote. A generic version of an existing Pfizer product, the biological drug Enbrel, may arrive in 2014 or 2015, adding to the competition, they said.

“With the long-term future of Humira likely tailing off, we are hard-pressed to see the U.S. and European major drug companies we cover wanting to snatch up Humira and the other $10 billion worth of Abbott products,” the analysts wrote.

Planned Split

Abbott, based in Abbott Park, Illinois, said Oct. 19 that it will split next year, with one company selling medical products and the other prescription medicines. Merck & Co., Roche Holding AG or Bayer AG may be interested in bidding for the prescription-drug business, said Jeffrey Holford, a Jefferies Group Inc. analyst. Those companies declined to comment yesterday.

Merck and Roche have therapies similar to Humira that probably would prevent them from bidding, the Bernstein analysts said.

Abbott’s late-stage experimental medicines also don’t provide a rationale for a bid, the analysts wrote. “There are some interesting prospects, but too much uncertainty remains for the moment,” they said.

Big mergers between drug companies also seem to be out of fashion, in part because they have hurt research productivity, the Bernstein analysts said.

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