It has become a commonplace that emerging markets, with increasingly affluent and aging populations, are where pharmaceutical companies want to be. Abbott Laboratories' two largest transactions in recent history -- the deals themselves were not spectacularly large -- helped propel the drugmaker solidly into that desired ground.

Abbott's $6.6 billion acquisition in 2010 of Solvay Pharmaceuticals SA gave it almost $3 billion in sales in top markets such as Russia, Brazil and India. Its second acquisition, also in 2010, was the $3.72 billion deal for Piramal Healthcare Ltd.'s healthcare solutions business, which helped make Abbott the top-selling pharma in India.

Abbott is now the second-largest pharmaceutical company by sales in emerging markets, continuing to narrow Sanofi's role as the leader in these high-growth countries. It now has 25% of emerging-markets sales, up from 19% previously, compared with Sanofi's 31% market share. It is that record of growth that led a majority of respondents to name Abbott the winner of The Deal magazine's Most Admired Corporate Dealmaker award in bio-pharma for the fourth consecutive year.

Of course, Abbott's dealmaking has been in more than just emerging markets. Over the past three years, it has announced a dozen acquisitions and licensing agreements -- deals valued between a few hundred million dollars and into the billions -- that have helped the company expand its worldwide sales from $29.5 billion in 2008 to more than $35 billion in 2010. Abbott's escalating sales have outdone some of its peers, such as Johnson & Johnson, which saw total sales decline during that period by $2.2 billion, to $61.6 billion. Pfizer Inc. and Merck & Co., on the other hand, increased sales in the same manner as Abbott: acquisitions. Pfizer, for example, gobbled up Wyeth in 2009 for $68 billion, increasing its sales from $48.3 billion in 2008 to $67.8 billion in 2010.

"Investors have been reacting positively to deals, especially when they are done for positive reasons," Miller Tabak + Co. LLC analyst Les Funtleyder says. "Speaking as an analyst, you can never have enough pipeline in pharma."

Abbott has tried to establish effective incorporation as its bread-and-butter. Bill Chase, vice president of licensing and new business development at Abbott, says the company is able to incorporate new businesses successfully because it looks to add segments in areas where it already has business operations.

A 50-person group searches for assets, performs due diligence and screens deals. The group is divided into teams dedicated to each of Abbott's divisions, such as pharmaceuticals, medical devices and nutrition. Within those teams, scientists and researchers analyze the pipeline and products within an acquisition candidate. Financial experts examine the potential market and strategic needs that a target could fill in Abbott's pipeline. Members of the licensing and acquisition team take part in the negotiating and contract-writing process. The interest in developing countries, meanwhile, has meant that some members of the team are now being assigned to specific geographic areas. "We now have dedicated resources in some of these markets," Chase says.

"We do very, very detailed in-depth due diligence, from a scientific standpoint, a clinical standpoint," he says. "No stone goes unturned."

Abbott also has a strong post-merger integration program. In the case of the Solvay deal, Morningstar Inc. analyst Damien Conover notes that Abbott was able to examine the company and pinpoint duplicate roles -- a "nice way to get Solvay integrated," Conover says. Overall, Abbott has reduced its workforce by 5% since September 2010, Conover notes, one of the highest rates among Big Pharma companies.

Since 2008, Abbott has spent almost $15 billion (more than $16 billion if you include future milestone payments) on eight acquisitions, building its pharmaceutical and medical-device pipeline. Abbott has more recently started rebuilding its cash stockpile, which had reached nearly $9 billion at the beginning of 2010. After its acquisitive 2010, Abbott's cash and cash equivalents fell as low as $3.6 billion. As of June 30, Abbott had added $500 million to that number. "When I look at Abbott, I look more at this as a cash-building year -- rebuilding the stockpiles after a lot of acquisitions," Conover says.

Chase says transactions are still ongoing, even if they aren't getting as much public attention.

"I think you've got to look at the level of activity that goes on versus the number of deals that hit the press. We are every bit as active as we have been," he says. "I'm as busy as ever."

The company has announced only two licensing agreements in 2011: one with Biotest AG to develop an antibody for rheumatoid arthritis and another with Seattle Genetics Inc. to develop an antibody for cancer. Chase says Abbott's strategy is the same as it was in prior years when deal volume was higher and that the company is constantly screening M&A and licensing opportunities.

"I don't think one should infer anything about Abbott's core strategy from the mix of licensing and acquisition transactions during any given period," he says. "We look at both types of transactions as part of a comprehensive licensing and acquisition strategy and apply either of them as the specifics of a situation demands. We like the concept of disruptive technologies."

While moving into emerging markets is widely accepted as a wise decision, some acquisitions have been riskier and have yet to be proved a success. In April 2010, for example, Abbott closed the acquisition of Facet Biotech Corp. -- a clinical-stage biotechnology company with no approved products -- for $722 million. Outright acquisitions of biotechs with assets not yet approved by the Food and Drug Administration are no longer as popular as they once were, and even when they do happen, a large portion of the value is typically based on contingencies: Shareholders get a milestone payment if a drug candidate passes Phase 2 trials, for example. Sanofi's $20 billion acquisition of Genzyme Corp. included a contingent value right related to multiple sclerosis drug Lemtrada, which would spark future payments to Genzyme shareholders if the drug was successful in late-stage trials and in earning FDA approval.

Chase says Abbott felt comfortable with the Facet acquisition after extensive due diligence. Examining Facet's management team, as well as studying how Facet's scientific and clinical work would fit within Abbott, provided the buyer with confidence that the deal was worthwhile, he says.

The deal may be close to paying off. Facet had partnered with Biogen Idec Inc. on a multiple sclerosis drug, known as daclizumab, a monoclonal antibody being considered for uses ranging from the prevention of organ rejection in transplants to treatment of multiple sclerosis. Abbott assumed the partnership with Biogen, and the two companies revealed positive Phase 2b data in August. The drug was more efficacious than other MS treatments that reel in billions in annual sales.

Abbott already has experience with biotech acquisitions. In 2001 it acquired Knoll Pharmaceutical Co., then part of German-based BASF AG, for $6.9 billion. With that acquisition, Abbott gained a Phase 3 drug known at the time as D2E7, which went on to become known as Humira, now Abbott's flagship product for treating rheumatoid arthritis, among other diseases. In 2010 alone, Humira earned Abbott $6.5 billion in sales.

"When you buy a company that doesn't have any approved products, it can be a home run," says Conover.