By SmartMoney Staff
Long-term investors in Abbott Laboratories have shown a great deal of patience. As pointed out in SmartMoney’s Dead Stocks Walking story, the firm has more than doubled its profits over the past 10 years, but the company’s shares have essentially remained flat. The stagnation has been annoying — even to some of the firm’s biggest fans.
Perhaps Abbott’s executives observed — or felt — the same frustration. The company announced today that it plans to splitting into two firms.. One company would focus primarily on propietary drugs, particularly the blockbuster drug Humira, which combats rheumatoid arthritis. The second would encompass the rest of Abbott, which includes diagnostics, medical devices and branded generic drugs. That division will keep the Abbott name and be led by current chief executive officer Miles White.
An Abbott spokesman says the separation will “benefit both companies and our shareholders,” but declined to comment further.
Abbott’s shares were up nearly 4% on Wednesday afternoon, providing a nice nudge for its investors’ portfolios. But it remains to be seen whether a divided Abbott can shake the “dead stock” reputation.