AbbVie to buy Pharmacyclics for $21 billion to boost Cancer Drugs Pipeline
Drugmaker AbbVie Inc (ABBV.N) said it will buy Pharmacyclics Inc (PCYC.O), the maker of blockbuster cancer drug Imbruvica, for about $21 billion to broaden its oncology drugs pipeline.
The deal gives AbbVie access to Pharmacyclics’ cancer drugs portfolio, lessening the Chicago-based company’s dependence on its rheumatoid arthritis drug Humira that accounts for most of its sales.
The transaction follows AbbVie’s failed $55 billion bid to buy Dublin-based Shire Plc (SHP.L) last October after the United States took steps to deter tax-lowering deals.
“Imbruvica is not only complementary to AbbVie’s oncology pipeline, it has demonstrated strong clinical efficacy across a broad range of hematologic malignancies,” AbbVie Chief Executive Richard Gonzalez said in a statement.
Pharmacyclics said earlier it expects sales of Imbruvica, which is approved in more than 40 countries and has U.S. approvals for four forms of blood cancer, to touch $1 billion in the United States this year.
AbbVie, which was spun out of Abbott Laboratories in 2013, expects the deal to be “highly accretive” to its revenue and earnings by 2017.
Sunnyvale, California-based Pharmacyclics co-markets Imbruvica with Johnson & Johnson’s (JNJ.N) Janssen unit. Besides Imbruvica, it has three product candidates in development.
Media reports said Johnson & Johnson was close to buying Pharmacyclics. Novartis AG (NOVN.VX) was also interested in the company, a report said.
The acquisition is the latest in a spate of big pharma deals this year as many companies are strengthening their product offerings as old blockbuster drugs go generic. The pace of M&A is expected to continue as companies take advantage of strong capital markets.
Last month, Pfizer Inc (PFE.N) agreed to buy Hospira Inc (HSP.N) for about $15 billion, and Canada’s Valeant Pharmaceuticals International Inc (VRX.TO) (VRX.N) agreed to buy Salix Pharmaceuticals Ltd (SLXP.O) for about $10.1 billion.
AbbVie will pay $261.25 per share in cash and stock, a 13 percent premium to Pharmacyclics stock’s closing price on Wednesday on the Nasdaq.
The deal, expected to close in the middle of the year, comprises about 58 percent cash and 42 percent AbbVie common stock. Pharmacyclics shareholders can opt for cash, AbbVie stock or a combination, AbbVie said.
Morgan Stanley advised AbbVie, while Wachtell, Lipton, Rosen & Katz acted as legal counsel. Centerview Partners LLC and J.P. Morgan Securities were financial advisers to Pharmacyclics. Wilson Sonsini Goodrich & Rosati was its legal counsel.
Source: Reuters
