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Abbott Makes Deal for Kos

The acquisition is valued at $3.7 billion.

Abbott Laboratories

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is moving to broaden its offerings through the acquisition of specialty drugmaker

Kos Pharmaceuticals


in a deal worth $3.7 billion.

"Kos Pharmaceuticals is an excellent strategic fit for Abbott, both scientifically and commercially," said Miles White, Abbott's chairman and CEO. "This acquisition expands Abbott's presence in the lipid-management market and will provide several on-market and late-stage pipeline products."

Through the acquisition, which amounts to $78 a share, Abbott gains a stronger presence in the $20 billion market for cholesterol treatments by taking over the Kos drugs Niaspan and Advicor.

Kos is also in late-stage development with Simcor, a combination of Niaspan and a generic version of


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cholesterol drug Zocor, which is expected to be submitted to the Food and Drug Administration for regulatory review in the first half of 2007.

Abbott already makes the lipid-management drug TriCor and is working on a combination of TriCor and


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Kos is also developing, among other treatments, asthma drug Flutiform and an inhaled insulin product.

Abbott expects the transaction to reduce earnings by 2 or 3 cents a share in 2007, be neutral to accretive in 2008 and lead to a significant profit addition thereafter.

Once the deal closes, Abbott expects to take one-time charges, primarily for in-process research and development and integration expenses.

Abbott's shares fell 0.8% to $47.27, while Kos' shares jumped 53.5% to $76.90 Monday.