Story of Abbott: From a small operation in the 19th century to the most valuable medical device company in the 21st century

Abbott Laboratories, commonly known as Abbott, was founded in 1888 by Dr. Wallace Abbott, a Chicago physician. He began by producing small pills called “alkaloidal granules,” a breakthrough at the time for ensuring precise medication dosing. In its first year, Abbott recorded $2,000 in sales, a modest beginning for what would later become a global healthcare leader.

Over the following decades, guided by strong leadership, Abbott evolved from a small operation into a global healthcare powerhouse, expanding into pharmaceuticals, nutrition, diagnostics, and medical devices. Abbott’s growth has been driven by a combination of organic growth and strategic acquisitions, including Knoll in 2001 for $6.9 billion (bringing the blockbuster drug Humira), Solvay Pharmaceuticals in 2010 for $6.2 billion, St. Jude Medical in 2017 for $25 billion, and Alere Inc. in 2017 for $5.8 billion.

Alongside its major acquisitions, Abbott has also carried out major spin-offs to sharpen its focus continually. A notable example is the spin-off of Hospira in 2004, which later gained significant value and was acquired by Pfizer for $17 billion in 2015.

Abbott’s most defining moment in modern history came in 2013, when the company decided to split and spin off its research-based pharmaceutical division to create a new company, AbbVie. The separation enabled AbbVie to focus on branded pharmaceuticals, such as Humira, while Abbott refined its strategy to concentrate on medical devices, diagnostics, and nutrition.

Abbott stands out as one of the few, if not the only, medical device companies that have successfully managed large-scale acquisitions and divestitures while maintaining momentum and consistently generating shareholder value.

Today, Abbott generates over $40 billion in annual revenue and holds a market valuation exceeding $230 billion, making it the world’s most valuable medical device company. Meanwhile, its spin-off, AbbVie, has grown into a pharmaceutical powerhouse with nearly $60 billion in annual revenue and a valuation exceeding $400 billion, ranking as the world’s third most valuable pharmaceutical company, after Eli Lilly and Company and Johnson & Johnson, making Abbott’s decision to split as one of the most successful corporate restructurings in healthcare history.

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