Abbott India in the green

Abbott India is doing well today. The stock which closed yesterday at Rs.2100, opened higher today at Rs.2198, going on to hit an intra day high at Rs.2216. Currently the stock remains 4% higher at Rs.2180 levels.

The stock has zoomed up on reports suggesting that another pharma company, Mylan is planning to acquire the parent company’s branded specialty and generics business in developed market, outside USA. The price tag for Mylan has been pegged at $5.3 billion. Post this deal, Abbott will continue to sell its branded generics in emerging markets where demand is higher unlike developed countries, where sale of branded generics has actually been on a decline.  Though this sale, in the immediate short run could affect the earnings of Abbott in 2015, it is planning to use the proceeds from the sake to either buy back its own shares or acquire more medical device companies.