By Nancy Volkers

Special To BioWorld Financial Watch

Abbott Laboratories signed on to market Triangle Pharmaceuticals Inc.'s antivirals last month in a top-shelf agreement worth up to $335 million. Abbott, of Abbott Park. Ill., agreed to U.S. marketing of two protease inhibitors and four products in development for hepatitis B and HIV.

Outside the U.S., Abbott has exclusive sales and marketing rights to the four antivirals. The two companies also intend to enter a manufacturing agreement that would let Abbott manufacture certain Triangle products worldwide.

"This transaction fulfills a strategic objective for Triangle," said Chris Rallis, vice president of finance and general counsel at the Durham, N.C.-based company. "We had anticipated forming some sort of collaboration on a portfolio basis, rather than a singular product basis ­ Abbott fits the bill. We're excited about the collaboration."

Abbott has been on the other side of the counter as well; in June, Abbott and Cephalon Inc., of West Chester, Pa., signed a deal to market and develop Abbott's Gabitril (tiagabine hydrochloride), an anti-epileptic.

That deal gives Abbott access to Cephalon's relationships with sleep specialists and neurologists, on whom Cephalon has been calling to sell Provigil (modafinil), which was approved in December for excessive daytime sleepiness associated with narcolepsy. Cephalon and Abbott will promote Gabitril primarily to neurologists, as well as conduct additional clinical research with Gabitril in epilepsy and other therapeutic areas. Abbott also has the right of first negotiation to develop and promote Provigil, should Cephalon elect to collaborate in the United States.

"With this deal, Cephalon is hiring 40 more sales reps to promote Gabitril, plus Provigil," said Jay Silverman, senior analyst at BancBoston Robertson Stephens Inc. in New York. "This broadens [Cephalon's] portfolio."

Other recent marketing deals on Abbott's plate include an April collaboration with the Japanese company Meiji Seika to market cefditoren pivoxil (cefditoren), a potent, broad-spectrum cephalosporin antibiotic. Abbott received co-marketing rights in Europe and exclusive rights to manufacture and market cefditoren throughout Latin America. Agreements signed in May with Digene Corp., of Beltsville, Md., gave Abbott responsibility for Digene's Hybrid Capture products in Europe, the Middle East and Africa and Digene's Hybrid Capture II chlamydia and gonorrhea tests in the United States. These agreements replace deals between Digene and International Murex Technologies Corp., a company acquired by Abbott for $234 million in 1998.

"Abbott is becoming extremely creative in areas like licensing and [mergers and acquisitions]," Silverman said. "They had been one of the last big health care companies to go externally for growth, vis a vis acquisition."

Acquisitions are all the rage now at Abbott, which announced last month it would purchase Alza Corp., of Palo Alto, Calif., in a deal worth more than $7 billion. A couple of weeks later, the company acquired Perclose, the leading arterial closure device manufacturer, in a $680 million transaction. Abbott will acquire all of Perclose's outstanding shares in a stock-for-stock merger transaction.

The company has been metamorphosing; it's had nearly 100 percent turnover of its management, including a new chairman/CEO and a president/chief operating officer, though both are long-time Abbott employees. The influx of new blood, coupled with a need for filling the pipeline, may have incited the company's flurry of acquisitions and collaborations.

"In retrospect, Abbott probably hadn't spent enough in R&D in the past 10 years and had fallen behind the rest of the industry," said Alex Zisson, senior analyst and managing director of Hambrecht & Quist LLC in New York. "I think the new management team, over the last 12 months, realized that the situation would be coming to a head. Abbott has arguably gone from the worst pipeline to somewhere above average."

Abbott is unique in big pharma, in that "pharma" makes up only one of four facets of its business. Though originally a pharmaceutical company, Abbott also has concentrations in nutrition, hospital products and diagnostics. What's more, the four areas are equally strong: each accounts for about 20 percent of total revenues, with the remaining 20 percent coming from international sales of all four segments combined.

"What we look for [in a deal] are things that make sense for our business strategically," said Rhonda Luniak, an Abbott spokeswoman. "There has to be agreement within our franchise areas, and then we capitalize on that. That's the primary criterion ­ something that we can add value to."

Abbott's agreement with MedImmune Inc., of Gaithersburg, Md., to market Synagis (MEDI-493), MedImmune's drug for respiratory syncytial virus, fits that criterion. The U.S. launch of Synagis in 1998 was one of the most successful new pediatric pharmaceutical launches in history, with the product registering sales of more than $225 million in its first six months.

In addition, Abbott's international division has exclusive rights to Synagis outside the U.S., and will launch in multiple countries in 1999.

"When you take a deal like the one with MedImmune, what was attractive was the expertise we had on the pharmaceutical side, and the expertise we had with pediatricians through our nutrition side," Luniak said. "We can leverage off the relationships we've built in multiple divisions." Abbott's nutritional division is responsible for Similac infant formula and the drink Ensure, among other products.

In 1998, Abbott's total sales surpassed $12.5 billion ­ up 5 percent from 1997 ­ and its commitment to research and development was $1.2 billion. In the last decade, Abbott's share price grew five-fold, its stock split twice, and its market value rose from $15 billion to approximately $75 billion.

In the pharmaceuticals sector, 1998 sales exceeded $4 billion worldwide. Last year, Abbott organized its U.S. pharmaceutical products division into franchises focused in five areas: neuroscience, anti-infectives, vascular medicine, antivirals and urology. Abbott also formed "forward-looking" franchises in oncology and diabetes.

Depakote, originally marketed as an anti-convulsant, achieved worldwide sales of about $650 million in 1998 and is expected to be Abbott's top-selling U.S. drug this year. Depakote is now prescribed for several conditions, including bipolar disorder and prevention of migraines. In the neuroscience pipeline, Abbott has ABT-594, a pain drug in Phase II clinical studies.

Biaxin (clarithromycin), Abbott's anti-infective, had 1998 worldwide sales of more than $1.2 billion. Anti-infectives have historically been a strength at Abbott. The company markets a once-daily formulation of clarithromycin in 35 countries outside the U.S., and expects to file for FDA approval of this formulation this year. ABT-773, a ketolide antibiotic targeted at resistant bacteria, is in early Phase II development.

The vascular medicine franchise is centered on Abbokinase, a clot-dissolving agent, which had worldwide sales of more than $275 million in 1998. Due to FDA regulatory concerns associated with the manufacture of Abbokinase, sale of the product has temporarily been halted. Abbott's next-generation product, r-Pro-UK, a thrombolytic drug initially targeted at the treatment of ischemic stroke, is in development. TriCor, a triglyceride-lowering agent, was launched in June 1998, and the company expects sales of approximately $50 million in 1999.

Abbott's antivirals are anchored by Norvir, an HIV protease inhibitor. Worldwide sales topped $250 million in 1998. The FDA approved a soft-gel formulation of Norvir last month, which should now be available in U.S. pharmacies. Norvir also was approved last month in Switzerland.

Abbott's protease inhibitor, ABT-378, is in Phase III trials. Data presented in February showed 93 percent of patients reached undetectable HIV levels with ABT-378.

In the urology franchise, Hytrin, for hypertension and benign prostatic hyperplasia, had 1998 worldwide sales of approximately $650 million. ABT-232, a compound for urinary stress incontinence, and ABT-980, a drug for benign prostatic hyperplasia, are in early development. *