Report: Abbott looking to sell Solvay's flu vax unit
Illinois drugmaker Abbott Laboratories is reportedly looking to sell the flu vaccine business it picked up in its recent purchase of Solvay pharmaceutical unit, in a deal potentially worth €500 million ($619 million), according to a Wall Street Journal report. Abbott completed its acquisition of Solvay in February.
"We're exploring the option," according to Abbott spokesman Scott Stoffel, as quoted by the Chicago Daily Herald. Included in the sale would be Solvay's flu vaccine Influvac, which had 2009 sales of $198 million, Stoffel says, declining to comment on a possible price.
"Abbott's decision to sell off the company's flu vaccine business does not come as a surprise, as the company is a niche player without critical mass in the increasingly competitive seasonal flu vaccine market," Hedwig Kresse, head of vaccines & infectious diseases at Datamonitor, says in a research note. "The most attractive selling point is Abbott's established position in the lucrative Russian influenza vaccine market through its alliance with Petrovax Pharm, which could gain a potential buyer easy access to one of the key emerging markets for vaccines," Kresse says, adding that the list of interested parties in the flu unit could include several companies already established in the flu vaccine space.
The Solvay flu vax business already has exposure to eastern Europe, an area that is underserved by vaccine makers and presents opportunities for further growth, the WSJ points out. Abbott is hoping relative scarcity of such assets after a series of takeovers in the group will push up demand from bidders.
However, Brian Orelli of Motley Fool liked Abbott's original purchase of the Solvay unit, as it lessened "the company's reliance on its anti-inflammatory drug Humira, which has gotten a little out of control, making up 18 percent of total revenue last quarter. Selling off part of the acquisition, however, kind of goes back to that model." Abbott declined 53 cents, or 1.1 percent, to $46.65 by Tuesday afternoon, the Daily Herald reports. The shares have dropped 14 percent this year.
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