Abbott licenses 24 pharmaceutical products from Zydus Cadila

Abbott licenses 24 Zydus pharmaceutical products for 15 high-growth emerging markets; holds option for more than 40 additional products Abbott also announces the creation of new stand-alone Established Products Division with $5 billion in current pharmaceutical sales; business focused on fast-growing emerging markets Emerging markets expected to grow at three times the rate of developed markets, accounting for 70 percent of global pharma industry growth in next several years

Further strengthening its global competitive position, Abbott (NYSE: ABT) today announced a licensing and supply agreement with Zydus Cadila of India for a portfolio of pharmaceutical products that Abbott will commercialize in 15 emerging markets, enabling the company to further accelerate its emerging markets growth.

Abbott also announced the formal creation of a stand-alone Established Products Division (EPD) concentrated on expanding the market for Abbott's established pharmaceutical portfolio outside of the U.S., particularly focused in emerging markets. EPD will be led by Michael J. Warmuth, an Abbott leader with significant experience in Abbott's pharmaceutical business, who most recently led Abbott's Diagnostics Division.

"Our new Established Products Division, with $5 billion in sales, will focus on expanding our presence and product offerings in the world's fastest-growing emerging markets," said Olivier Bohuon, executive vice president, Pharmaceutical Products Group, Abbott. EPD is part of the Pharmaceutical Products Group reporting to Bohuon.

Abbott's growing portfolio of established products consists of branded generics - products that have significant brand equity in many international markets - providing durable, sustainable franchises for future growth. This complements Abbott's successful proprietary products business and proprietary pharmaceutical pipeline.

The Zydus Cadila Collaboration

Under the Zydus agreement, Abbott will gain rights to at least 24 Zydus products in 15 key emerging markets where Abbott has a strong and growing presence. The agreement also includes an option for the addition of more than 40 Zydus products to the collaboration.

"The Zydus agreement complements our established products strategy, augmenting this business with a broad portfolio of branded generics," said Bohuon.

The collaboration includes medicines for pain, cancer and cardiovascular, neurological and respiratory diseases. The partnership will leverage Abbott's powerful emerging markets infrastructure to commercialize the Zydus products, with product launches beginning in early 2012.

"We have always believed in working with partners for win-win alliances that look at new opportunities for growth and expansion," said Chairman and Managing Director Zydus Cadila, Pankaj R. Patel. "In this alliance we see tremendous opportunity to participate in multiple ways in a market that is growing and expanding rapidly. Building on our mutual strengths we are creating a considerable competitive advantage for value creation for both partners over the long term."

The financial terms of the agreement were not disclosed. Abbott's Established Products Strategy

Abbott's new Established Products Division will market Abbott's established products portfolio outside of the U.S., with a focus on accelerating growth in emerging markets.

Throughout the past decade, Abbott has built a leading portfolio of branded generics, through its own products as well as those acquired with the 2001 acquisition of Knoll's pharmaceutical business. In 2007, the company established a separate business unit within its international pharmaceutical division dedicated to established products.

Additionally, a new geographic region focused on Russia, India and China was created which resulted in the doubling of Abbott's growth rate in those countries.

Most recently, the company acquired Solvay Pharmaceuticals, obtaining a diverse branded generics portfolio and providing significant critical mass in key emerging markets.

As a result of these combined actions, Abbott is now among the leading multi-national health care companies in numerous emerging markets. Approximately 20 percent of Abbott's pharmaceutical sales today are in emerging markets.

Emerging Markets Opportunity

Pharmaceutical sales in emerging markets are expected to grow at three times the rate of developed markets and account for 70 percent of the industry's growth over the next several years. Branded generics represent the most significant growth opportunity in emerging markets. Today, branded generics account for 25 percent of the global pharmaceutical market, have the majority of market share in the largest emerging markets, and are expected to outpace growth of patented and generic products.