Abbott''s Kos acquisition driven by growth in cholesterol market

Abbott Laboratories' acquisition of Kos Pharmaceuticals, seems to have been driven by the double-digit growth of the market for lipid (cholesterol) management products, a $20-billion segment, in which Kos Pharmaceuticals, has two prominent drugs that help raise the levels of "good cholesterol."

On Monday, 6 November, 2006, the two companies had announced announced a definitive agreement for Abbott to acquire Kos for $78 per share in cash, for a total transaction value of $3.7 billion, net of cash currently held by Kos.

Kos is a specialty pharmaceutical company that develops and markets proprietary medications for the treatment of chronic cardiovascular, metabolic and respiratory diseases. The company has a growing presence in the lipid management market.

"Kos Pharmaceuticals is an excellent strategic fit for Abbott, both scientifically and commercially," said Miles D. White, chairman and chief executive officer, Abbott. "This acquisition expands Abbott's presence in the lipid management market and will provide several on-market and late-stage pipeline products. Kos also complements our existing commercial and research and development expertise, and increases our R&D spending capacity."

Niaspan, an extended release form of niacin which raises levels of HDL, or good cholesterol, and Advicor, a drug that combines the generic form of Merck Mevacor and is used to treat a variety of cholesterol-related disorders.

Since being founded in 1988 by Michael Jaharis, chairnman emeritus and Daniel Bell, chairman, Kos has pioneered the HDL therapy area in the United States and firmly established Niaspan and Advicor as successful and highly differentiated therapies said Adrian Adams, president and chief executive officer, Kos Pharmaceuticals.