Corporate venture investing has become an increasingly important source of capital as traditional venture firms remained squeezed. In devices, the latest entrant into the field is Abbott Ventures, which sees itself as an extension of Abbott's internal efforts to build its device pipeline, favoring mid-stage deals in technology and therapeutic areas that fit strategically with Abbott's existing device businesses.
Abbott Ventures: Building A Venture Portfolio in Devices
Article preview from IN VIVO- April 2010
For the past decade or so, arguably no company has been more active in creating a major presence in medical devices than Abbott Laboratories Inc. Beginning in the late 1990s, the company has built a leading cardiovascular device franchise through a series of acquisitions, large and small – most notably with the purchase of the Guidant Corp. interventional cardiology business – while, serially, entering spine, only to exit and swap it out for an important stake in the ophthalmology market through its recent acquisition of Advanced Medical Optics Inc.
All of these moves were built on a major strategic planning initiative in medical devices that Abbott undertook a decade ago. Now, Abbott has supplemented its aggressive M&A strategy with the launch of a dedicated venture investment arm, headed by one of the chief architects of that original plan: former president and COO of Abbott, Richard Gonzalez.
Formed in June of 2009, Abbott Ventures Inc.'s charter, says Gonzalez, "is to focus on therapeutic devices, diagnostics, drug/device combinations, and some unique drug delivery technologies." (A separate, but related venture arm, Abbott Biotech Ventures, focuses on biotech and early-stage pharma opportunities.) Minority equity investments are hardly new to Abbott. In the past, the company was an early investor in both Boston Scientific Corp. and Amgen Inc. But those kinds of deals, says Gonzalez, "were typically driven by some strategy within an operating unit or at the corporate level, by a need or a desire in the operating unit to have some access to the company."
For Abbott, the venture operation extends the company's technology horizon beyond what it typically would get within each individual operating unit. Talking about the creation of the venture group, Gonzalez notes, "I think Abbott has reached a point where we need to focus not just on opportunities that drive growth over the course of the normal long-range plans in R&D and strategic acquisitions, but on long-term plans even beyond that, five to 10 years from now. That's really what venture activity allows you to do."
- David Cassak
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