Until, that is, its acquisition of Piramal Healthcare's formulation business in May last year. Until then, the US multinational drug firm was nowhere in the list of big pharma suitors for Indian generic companies specialising in reverse engineered versions of patented drugs.
Abbott's current Indian businesses have a history dating back almost 100 years. Despite that, stand-alone sales for the year ended November 2009 were only Rs 760 crore (Rs 7.6 billion).
Not a large figure, considering the Indian drug market size of Rs 55,000-60,000 crore (Rs 550-600 billion). A year before that, Abbott's sales were only Rs 665 crore (Rs 6.65 billion).
If other businesses are added, Abbott's sales in 2009 totalled Rs1,130 crore ($250 million), a majority of which came from pharmaceutical products, explained US spokesperson Scott Stoffel.
But with the surprising acquisition of Piramal Healthcare's domestic formulation business worth Rs 2,000 crore (Rs 20 billion), Abbott has emerged the largest drug maker in India in terms of marketshare. It was a prize catch.
Piramal's domestic formulation business is the fourth largest in India, with 350 brands across various therapies, 5,500 employees and manufacturing units in the tax haven of Baddi in Himachal Pradesh. Compared with this, Abbott had less than 450 products in the domestic market.
"There is a scarcity of assets available to gain full ownership as we did with Piramal in this market, and we acquired one of the very best. I think we did the deal in six months," said Michael J Warmuth, senior vice-president (established products) at Abbott.
With that single deal, the company overtook market leaders like homegrown Ranbaxy Laboratories, Cipla and GlaxoSmithkline (the largest multinational drug company in India with a marketshare of over seven per cent).
Abbott's Indian operations were ranked only 18th with a domestic marketshare of about 2.5 per cent until 2009. Its global acquisition of Solvay Pharma helped add another 0.5 per cent marketshare last year, as Solvay's business was ranked 35th.
Abbott now has more than 10,000 employees in India, its largest base outside the US, including the largest field force in the country at around 7,000 people.
Many eyebrows were raised when Abbott decided to pay $3.72 billion (Rs 17,500 crore) for Piramal's business, almost nine times its worth. But Abbott had done its calculations, says Warmuth.
"We anticipate Piramal's sales to exceed $500 million in 2011, growing 20 per cent over the next several years. Abbott's pharmaceutical sales in India, including Abbott's base and Piramal's, will exceed $2.5 billion in the next ten years," he said.
The India pharma market is expected to quadruple over the next decade, growing to $55 billion in 2020 from more than $12 billion, according to an October 2010 report by McKinsey & Company.
Abbott's current businesses started independent operations in India only since August 1944 with the birth of Boots Pure Drug Company. Its name was changed to The Boots Company in 1971 and thereafter to Boots Pharmaceuticals in 1991.
In 1995, the name was again changed to Knoll Pharmaceuticals and thereafter to Abbott India since July 1, 2002. This followed the global takeover of Knoll's majority stakeholder - German firm BASF Pharma - by Abbott Laboratories of the US.
Combining Piramal's local expertise with Abbott's global resources will allow the combines entity to grow big in India, says Warmuth. Abbott introduced 30 new drugs in the Indian market last year and plans to add another 30 in 2011.
The company also has a strategic alliance with Zydus Cadila for 24 products in 15 high-growth emerging markets, with an additional option of another 40 products.
These products will hit markets by 2012. Globally, Abbott expects sales of over $5 billion from emerging markets and a majority is expected to come from the new established products division.
Abbott's plans are not to disturb the current structure of Piramal healthcare's business, but allow it to operate as a standalone business, led by its current management team.
While Piramal's businesses report to Abbott's established products division under Warmuth, Abbott's existing India pharmaceutical business continues to operate independently.
"A key to Abbott's success in India, as in many markets around the world, is that we become truly part of each market, not merely in it. We understand that our structure, focus and presence need to be local, shaped by the market," said Warmuth.
Further, Abbott has also merged Solvay's India business with Abbott India, as part of the integration process. For the time being, Abbott is busy completing the integration of Solvay and Piramal's businesses and reach its goals set by 2020.