AbbVie boosts cancer drug pipeline with $21 billion Pharmacyclics deal
By Supriya Kurane and Ben Hirschler
(Reuters) - AbbVie Inc (ABBV.N: Quote) is to buy Pharmacyclics Inc PCYC.O for about $21 billion, giving it access to what is expected to be one of the world's top-selling cancer drugs and expanding its reach in the profitable oncology field.
The deal -- the latest example of a big drugmaker swooping on a biotech firm to refill its medicine pipeline -- confounds expectations that Pharmacyclics would sell out to Johnson & Johnson (JNJ.N: Quote).
AbbVie will pay $261.25 per share in cash and stock, a 13 percent premium to Pharmacyclics stock's closing price on Wednesday. Back in 2008 and 2009, the shares dipped below $1.
The acquisition lessens Chicago-based AbbVie's dependence on its blockbuster rheumatoid arthritis drug Humira that accounts for most of its revenue but is expected to start to see sales decline from 2017 or 2018.
AbbVie failed last October to buy Dublin-based Shire Plc (SHP.L: Quote) for $55 billion after the United States took steps to deter such tax-lowering deals.
Deutsche Bank analyst Robyn Karnauskas said the deal was positive for AbbVie as Pharmacyclics' blood cancer treatment Imbruvica would diversify the business beyond Humira.
"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 expects U.S. sales of Imbruvica to hit $1 billion this year and by 2020 worldwide sales are forecast to reach $5.8 billion, according to consensus analyst estimates compiled by Thomson Reuters Cortellis. Continued...