Abbott Laboratories Inc. (NYSE: ABT) has not yet completed its acquisition of StarLIMS Technologies Ltd. (Nasdaq:LIMS); TASE: LIMS), and it is already hungry to buy more Israeli companies.
Abbott, a developer of drugs, diagnostic kits, nutritional supplements, veterinary products, and other healthcare products and services, spent more than $7 billion on acquisitions in 2009 alone. Its most recent acquisition was StarLIMS, founded by CEO Itschak Friedman, and his brother, CFO Chaim Friedman. StarLIMS develops laboratory information management systems (LIMS). Abbott paid $123 million for the company.
When the deal is closed, StarLIMS will become a business unit, run by Itschak Friedman, within Abbott's Diagnostics Division. The Diagnostics Division operates in three areas: laboratory kits, molecular diagnostics, and the identification of genetic diseases; as well as Point of Care products for diagnostic and data management products at clinics.
Abbott EVP diagnostics Edward Michael is currently visiting Israel. In an interview with "Globes", he did not rule out possible expansion in Israel, including the acquisition of companies, investments in companies, and the signing of cooperation agreements. He also did not restrict areas of potential business. "We're interested in pharmaceuticals, nutrition, medical devices, and diagnostics, as well as new fields for us," he said.
"Globes": Which Israeli companies are suitable for Abbott?
Michael: "I don’t want to name names, but we're focusing on fields we've identified as interesting. Israel is, of course, not the only place we're looking at, but compared with its market size, Israel has a high level of innovation in fields of interest to us, and there's no reason for us not to grow here."
If you decided to invest in Israeli biomed, you'll find yourselves competing against Teva.
"If we see a good opportunity for investment, we'll seriously consider it. In any event, I don’t want to go into details so as not to give Teva an edge."
One Israeli company with a cooperation agreement with Abbott is BioView Ltd. (TASE:BIOV), which develops automated testing systems. The companies signed their cooperation agreement in late 2006, under which Abbott markets BioView's products in the US. Michael said, "The agreement with BioView was never exclusive. We had business with BioView, and we had business with other companies in the same field. I would call this an intensive cooperation, but it's part of our core business. Nonetheless, our relations are quite good."
Abbott opened a representative office in Israel in 2004, and has more than 100 employees working on pharmaceuticals and nutritional products in Israel. Abbott hired 30 employees in Israel during 2009, despite the economic crisis. One of Abbott's brands marketed in Israel is infant formula Similac.
"Abbott's activity in Israel is progressing step by step," says Michael, "We began in nutrition, we expanded into pharmaceuticals, and into diagnostics via a distributor, Ilex Medical Ltd. (TASE:ILX)."
Michael did not rule out transferring part of the diagnostics unit to a direct distributor in Israel. He stressed, however, that despite Israel's small market, it was good and successful for Abbott.
Abbott Israel's offices are located in Kiryat Atidim in north Tel Aviv, about a kilometer away from StarLIMS' headquarters at Ramat Hahayal. "We'll keep StarLIMS' R&D and management staff in Tel Aviv. We have no intention of changing the team. The objective is to continue to grow here," Michael says.
How will President Barack Obama's healthcare reform affect Abbott?
"At the moment, it's not clear how the healthcare reform bill will look. If it's similar to the current proposal, then there will be both positive and less positive effects on medical devices and pharmaceutical companies. It's hard to say what the overall effect will be, but reform is needed in the US, and this is a step in the right direction."
Published by Globes [online], Israel business news - www.globes-online.com - on January 20, 2010
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