Abbott to Become No. 1 Pharmaceutical Company in India with Acquisition of
Piramal's Healthcare Solutions Business

    
    Strategic action will propel Abbott to No. 1 position with annual sales
    growth approaching 20 percent in India, expected to exceed $2.5 billion in
    sales by 2020

    Piramal's comprehensive portfolio of market-leading branded generics spans
    multiple therapeutic areas; combined sales force to become industry's
    largest in India

    India, one of world's fastest-growing markets, generating nearly $8
billion
    in pharma sales this year; expected to more than double by 2015






    
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<p>ABBOTT PARK, Ill., <span class="xn-chron">May 21</span> /CNW/ -- Abbott (NYSE: ABT) announced a definitive agreement with Piramal Healthcare Limited to acquire full ownership of Piramal's Healthcare Solutions business (Domestic Formulations), a leader in the Indian branded generics market, for an up-front payment of <span class="xn-money">$2.12 billion</span>, plus <span class="xn-money">$400 million</span> annually for the next four years, giving Abbott the No. 1 position in the Indian pharmaceutical market. This further accelerates Abbott's emerging markets growth following the recent acquisition of Solvay Pharmaceuticals and announcements last week of Abbott's collaboration with Zydus Cadila as well as the creation of a new stand-alone Established Products Division to focus on expanding the global markets for its leading branded generics portfolio.</p>
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<p>"This strategic action will advance Abbott into the leading market position in <span class="xn-location">India</span>, one of the world's most attractive and rapidly growing markets," said Miles D. White, chairman and chief executive officer, Abbott. "Our strong position in branded generics and growing presence in emerging markets is part of our ongoing diversified pharmaceutical strategy, complementing our market-leading proprietary pharmaceutical offerings and pipeline in developed markets."</p>
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<p>"Emerging markets represent one of the greatest opportunities in health care - not only in pharmaceuticals - but across all of our business segments. Today, emerging markets represent more than 20 percent of Abbott's total business," said <span class="xn-person">Mr. White</span>.</p>
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<p>"With this deal, the combined Healthcare Solutions and Abbott businesses will become the clear market leader in <span class="xn-location">India</span>, with a market share of approximately 7 percent," said Ajay Piramal, chairman, Piramal Group. "This was our collective vision and I am glad that those who are part of Piramal's Healthcare Solutions business will realize this dream."</p>
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    The Indian Pharmaceutical Market
    
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<p><span class="xn-location">India</span> is one of the world's fastest-growing pharmaceutical markets, due in large part to branded generics. The market will generate nearly <span class="xn-money">$8 billion</span> in pharmaceutical annual sales this year, a number that is expected to more than double by 2015. Abbott estimates the growth of its Indian pharmaceutical business with Piramal to approach 20 percent annually, with expected sales of more than <span class="xn-money">$2.5 billion</span> by 2020.</p>
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<p>Branded generics have significant brand equity in many international markets, providing durable, sustainable franchises for future growth. Piramal markets the products in its Healthcare Solutions business in <span class="xn-location">India</span> only and does not market traditional generic products. 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.</p>
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<p>The Mumbai-based Piramal Healthcare Solutions business has a comprehensive portfolio of branded generics with annual sales expected to exceed <span class="xn-money">$500 million</span> next year in <span class="xn-location">India</span>, and market-leading brands in multiple therapeutic areas, including antibiotics, respiratory, cardiovascular, pain and neuroscience. This business grew  23 percent in 2010 (fiscal year ended <span class="xn-chron">March 31</span>, 2010), faster than the market in <span class="xn-location">India</span>. Piramal has a strong commercial presence, including the largest sales force in <span class="xn-location">India</span> with a unique model that includes dedicated sales personnel in rural areas inhabited by 70 percent of the population. The combined Abbott and Piramal sales forces will be the industry's largest in <span class="xn-location">India</span>.</p>
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<p>Piramal's Healthcare Solutions business will become part of Abbott's newly created, stand-alone Established Products Division. Piramal's Healthcare Solutions business employs more than 5,000 people in <span class="xn-location">India</span>. Abbott, which is celebrating its 100th year in <span class="xn-location">India</span>, has more than 2,500 employees across all of its businesses there.</p>
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    Abbott's Established Products Strategy
    
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<p>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.</p>
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<p>Additionally, a new geographic region focused on <span class="xn-location">Russia</span>, <span class="xn-location">India</span> and <span class="xn-location">China</span> was created, which resulted in the doubling of Abbott's growth rate in those countries.</p>
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<p>Most recently, the company acquired Solvay Pharmaceuticals, obtaining a diverse branded generics portfolio and providing significant critical mass in key emerging markets.</p>
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<p>As a result of these combined actions, Abbott is now among the leading multinational health care companies in numerous emerging markets. Approximately 20 percent of Abbott's pharmaceutical sales today are in emerging markets.</p>
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<p>"We have assembled a market-leading branded generics portfolio tailored to the unique needs of emerging markets, strongly positioning Abbott to meet the current and future geographic and market dynamics in pharmaceuticals," said Olivier Bohuon, executive vice president, global pharmaceuticals, Abbott. "Piramal has built a reputation for high-quality, well-known and trusted pharmaceutical brands. We look forward to welcoming the accomplished staff of Piramal's Healthcare Solutions business to Abbott."</p>
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<p>Pharmaceutical sales in emerging markets are expected to grow at three times the rate of developed markets and account for 70 percent of pharmaceutical growth over the next several years. This explosive growth is occurring as demographics, rising incomes, modernization of health systems and an increase in the treatment of chronic disease create greater demand for medicines.</p>
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    Financial Highlights
    
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<p>Under terms of the agreement, Abbott will purchase the assets of Piramal's Healthcare Solutions business for a <span class="xn-money">$2.12 billion</span> up-front payment with payments of <span class="xn-money">$400 million</span> annually for the next four years, beginning in 2011. The transaction will not impact Abbott's ongoing earnings per share guidance in 2010. Abbott plans to fund the transaction with cash on the balance sheet.</p>
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<p>This transaction is subject to shareholder approval of Piramal Healthcare Limited and other customary closing conditions, and is expected to close in the second half of 2010. This transaction is being conducted by a wholly-owned subsidiary of Abbott, resulting in full ownership of the assets of Piramal's Healthcare Solutions business (Domestic Formulations).</p>
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    Abbott Conference Call
    
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<p>Abbott will conduct a special conference call today at <span class="xn-chron">7:30 a.m. Central time</span> (<span class="xn-chron">8:30 a.m. Eastern time</span>) to provide an overview of the transaction. The live Web cast will be accessible through Abbott's Investor Relations Web site at <a href="http://www.abbottinvestor.com">www.abbottinvestor.com</a>.</p>
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<p>For more information on today's announcement, please go to Abbott's press kit at <a href="http://www.abbott.com/PHSMediaKit">www.abbott.com/PHSMediaKit</a>.</p>
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    About the Piramal Group
    
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<p>The Piramal Group, led by Ajay G. Piramal is one of India's foremost business conglomerates. Driven by the core values of Knowledge Action Care, the Piramal Group has interests in a myriad of industries that encompass healthcare, drug discovery & research, diagnostics, glass, real estate and financial services. The Piramal Group steadfastly pursues inclusive growth while adhering to ethical and value driven practices. The Group's turnover exceeded US <span class="xn-money">$1 billion</span> in FY2010.</p>
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    About Abbott
    
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<p>Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs approximately 83,000 people and markets its products in more than 130 countries.</p>
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<p>Abbott's news releases and other information are available on the company's Web site at <a href="http://www.abbott.com">www.abbott.com</a>.</p>
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    Abbott Forward-Looking Statement
    
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<p>Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, "Risk Factors," to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended <span class="xn-chron">Dec. 31, 2009</span>, and in Item 1A, "Risk Factors," to our Quarterly Report on Securities and Exchange Commission Form 10-Q for the period ended <span class="xn-chron">March 31, 2010</span>, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments.</p>
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For further information: Media, Melissa Brotz, [phone], [email protected], or Scott Stoffel, [phone], [email protected], or Investors, Larry Peepo, [phone], all of Abbott Web Site: http://www.abbott.com