Abbott Laboratories

Abbott Laboratories traces its beginnings to 1888 when Dr. Wallace C. Abbott operated a small pharmaceutical facility in the kitchen of his apartment. He manufactured pills called "dosimetric granules," which provided a uniform quantity of drugs. He sold his products to other physicians, and in 1900 the business was incorporated in Illinois as Abbott Alkaloidal Company. By 1905 annual sales grew to $200,000. The name was changed to Abbott Laboratories in 1915. During World War I, Abbott prospered by developing anesthetics that were previously only available from Germany. These included procaine, a replacement for German novocaine, and barbital, a substitute for veronal. After the war Abbott built a manufacturing plant in North Chicago and continued to develop its research capacity by establishing a research facility in Raleigh, North Carolina. It purchased Dermatological Research Laboratories in 1922 and John T. Milliken in 1928. In 1929 Abbott went public on the Chicago stock exchange with an offering of 20,000 shares at $32 per share. During World War II, Abbott was one of five pioneers in the United States to start commercial production of penicillin. After World War II, the company directed its attention to the development of antibiotics, a move that would make Abbott the world's leading immunodiagnostics business. In 1952 Abbott developed erythromycin, which represented a significant portion of Abbott's prescription drug business for several decades. In the 1960s Abbott began to pursue a new strategy that would place less emphasis on the pharmaceutical business by diversifying into other fields such as consumer goods. In 1964 it merged with M&R Dietetic Laboratories, maker of Similac infant formula. Abbott also developed Murine eye drops, Selsun Blue hair shampoo, the adult nutritional product Ensure, Faultless golf balls, Glad Hands rubber gloves, and Pream non-dairy creamer. One product, Sucarcyl, a cyclamate sugar substitute that was initially marketed to diabetics in the 1950s, became phenomenally successful in the 1960s as an ingredient in diet foods. In 1969 sales from this product accounted for about one-third of all consumer product revenues. The FDA banned sale of this product in 1970, saying it might be carcinogenic. Since the 1970s Abbott has continued to invest heavily in R&D and has continued to introduce new products such as Depakane (an anticonvulsant) in 1979, Hytrin (a cardiovascular drug for treatment of hypertension) in 1987, and Depakote (a manic- depression treatment) in 1995. It has also expanded through acquisitions. In 1996 it purchased Medisense, a biosensor technology company, and in 1999 it acquired the arterial-devise-closure maker Perclose and part of the anesthesia business of Glaxo Wellcome. In recent years, Abbott Laboratories has continued to perform well. In the period from 1991 to 2001, revenues grew from $6.9 billion to $16.3 billion and operating income rose from $1.6 billion to $3.5 billion.