AbbVie to buy Pharmacyclics in 21bn deal

AbbVie announced yesterday (March 4th) that it will buy cancer drugmaker Pharmacyclics in a $21 billion (£13.8 billion) deal. The deal – signed off by the board of directors of both companies – is comprised of 58 per cent cash and 42 per cent AbbVie stock, AbbVie said in a press release. It will pay $261.25 per share.

AbbVie will gain access to top-selling cancer drugs, as Pharmacyclics manufactures Imbruvica. "Imbruvica received initial U.S. Food and Drug Administration approval in 2013 and is the only therapy to have received three breakthrough therapy designations by the FDA," AbbVie chief executive Richard Gonzalez said in a statement.

Global sales to hit $5.8bn

"Imbruvica is not only complementary to AbbVie's oncology pipeline, it has demonstrated strong clinical efficacy across a broad range of hematologic malignancies."

Pharmacyclics expects US sales of Imbruvica to hit $1 billion this year, with global sales expected to reach $5.8 billion by 2020, according to Reuters.

AbbVie surprised markets by winning the bid against competitors such as Johnson & Johnson. Several news outlets including Bloomberg News as late as Wednesday evening were reporting Johnson & Johnson would announce a deal for Pharmacyclics.

In a statement, J&J said: "We’re looking forward to continuing our collaboration with the team at AbbVie to further develop and commercialise this important therapy for patients and their health care teams."

The deal – which comes less than three years after Abbott Laboratories spun off its proprietary drug business into a new company, Abbvie – expected to close in the middle of the year.

Last October, AbbVie failed to buy Dublin-based Shire Plc.The Chicago company's shareholders voted against the $54 billion takeover offer after the US government's decided to reduce tax benefits for firms merging overseas.