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With the blatantly obvious fact that the people of the world are aging, contracting or developing new diseases, and generally more concerned with their health and well being, it's apparent that the demand for quality pharmaceutical companies is on the rise. Not only do these companies provide the vaccines, medications, and medical tools that are needed on a daily basis, but also conduct medical research that has proven vital to breakthroughs in cures and treatments.

One of the top healthcare and drug manufacture companies is Abbott Laboratories (ABT), which is responsible for the discovery, development, manufacture, and sale of health care products worldwide. According to its company profile, it is most known for its adult and pediatric pharmaceuticals for rheumatoid and psoriatic arthritis, ankylosing spondylitis, psoriasis, juvenile idiopathic arthrisis, and Crohns disease; dyslipidemia; HIV infections; prostate cancer, endometriosis and central precocious puberty.

Recently, Abbott announced a split of the company, which will be sectioned off into a research-based pharmaceutical company named Abbvie, expected to launch by the end of 2012. The other part of the company will remain named Abbott, which currently has an $18 billion annual revenue and is expected to climb after the split. Abbott already has a strong portfolio of market-leading brand names such as Humira, Lupron, Synagis, Kaletra, Creon, and Synthroid.

Abbott's split is expected to separate its research related business from its medical products business, to better focus individually on both and capitalize on growth. With new high trading values of around $61 and a 0.77% increase Wednesday, the proposed split has enforced approval and optimism in investors of the company.

Abbott's biggest competitor right now is Johnson & Johnson (JNJ), currently trading at around $65 with a 0.42% increase Wednesday. Although Abbott is international, Johnson & Johnson benefits largely from its wide geographic diversification in over 170 countries. However, considering that Johnson & Johnson has found itself in several legal situations and product recalls, I would infer that it's their strong, dependable name and reputation that keeps them afloat but not necessarily progressing.

Another rival sneaking up is Merck (MRK), trading at a lower cost of about $39 and a 0.36% increase yesterday. Merk is said to be a good investment due to its heavy investors and also low costs. However, the company may be facing some troubles with expiring patents this year.

Similarly, it has been reported that Abbott may be facing the same issue. It recently sued Watson Pharmaceuticals (WPI) for an alleged patent infringements on one of its top products, Niaspan. There is much debate in this debacle over who is really hurting in this situation, Abbott for suing, or Watson, for trying to copy.

Another legal situation that may still have an affect on Abbott, is an incident with one of its infant formula products that failed to reach China national safety standards, hurting them significantly in sales. Not only did Abbott's Similac Stage 1 milk powder product test worst out of six samples provided, but tested below international and Chinese standards, a shock considering it was initially being tested as a benchmark for quality.

To further worsen the incident in China, media reports exploded last Wednesday with the news of a father in China in the city of Hangzhou who claimed he found half of a condom inside the milk powder package that he bought for his daughter.

With a scandal like that in the news, it's going to make it hard for Abbott to recover in China, and will probably lead to companies like Johnson & Johnson benefiting in international sales, however Abbott still seems to have a fighting chance with the splitting and expansion of the company this year.

It seems that even though there's trouble overseas for Abbott, the excitement of the splitting into its two new companies may keep it from stumbling. I believe the increased focus on one company making nutritional formula, generic drugs, and medical devices, and the other making branded drugs will result in positive product results.

Similarly, Pfizer (PFE) the biggest drug company in the world revenue wise, is also said to be following in the shoes of Abbott, and may be selling or splitting off its animal health and nutrition business. This clearly is a decision that will benefit Pfizer by allowing it room to restructure and bring in additional acquisition and investment flexibility.

Additionally, Abbott may need to watch out for other competing companies who may very well out shine them in the breakthrough drug development category; Sanofi (SNY) and partner Regeneron Pharmaceuticals (REGN) have had several mentions in the news regarding an experimental drug that lowers bad cholesterol by as much at 70%. In Abbotts direct competitor comparison chart, it has a market cap of $96.43 billion while Sanofi has a market cap of $102.72 billion and Merck topping both with $118.11 billion.

Another boost the recent news is giving to Abbott's competitors Johnson & Johnson, and Sanofi, is the hint at buying Oculus Innovative Sciences (OCLS) products, which apparently are too affective and too large of a market for the big pharmaceutical companies to ignore. Oculus' prized product, Microcyn is said to eradicate difficult to treat infections, reduce inflammation, pain and itch, and may often eliminate the need for topical and systematic antibiotics and steroids. This product would be fast and easy for any of the pharmaceutical companies to buy, and will most likely benefit them in the long one with its break-through capabilities.

One reason why Abbott may not directly benefit from the purchase of Microcyn is because its whole purpose is to develop and produce medical treatments and products, however, with Microcyn's high popularity and success rate, they may want to reconsider.

Microcyn is actually preferred over other products for wound care by physicians because of its superior antimicrobial properties and ability to leave healthy cells undamaged, an important factor in the healing process. Aside from its speedy affect on the healing process, it is also one of the most cost effective products on the market for all levels of wound treatment.

I predict that Abbott is going to be stepping up its game immensely, not just due to its international fallout with China, but also because of its rising competition with other pharmaceutical companies, especially in a time when new discoveries and improved products are constantly being produced. Either way, I believe Abbott will see strong gains and increase its dividends this year, and even more so after it splits next year.

Source: Abbott: Expect Strong Upside Movement, Both Pre And Post Research Division Spin-Off