AbbVie managed to win the bidding war that would decide the fate of PharmacyclicsInc. in a $21 billion deal that left Johnson & Johnsonoutside looking in on one of the most promising blood cancer therapies. The company’s newest cancer drug, Imbruvica, is expected to become a top-selling compound for the treatment of various cancer types. Novartis also expressed interest in Pharmacyclics’ product.
Imbruvica, Pharmacyclics’s flagship product, has received approval in more than 40 countries and is currently being used in the treatment of various cancer types, from leukemia to rare forms of lymphoma. As Pharmacyclics’s reports show, the drug already generated over $540 million in revenue in 2014 and experts believe that the drug would continue its growth trend this year.
The details of the transaction state that AbbVie will pay a whopping $261.25 per share, a 39 percent increase from what Pharmacyclics’s closing share price had been on February 24th, when the company had announced they were considering a deal. The price, according to the transaction terms, would be comprised of both cash and AbbVie equity.
“The acquisition of Pharmacyclics is a strategically compelling opportunity,”
Richard Gonzalez, AbbVie chairman and CEO said during a statement.
And while the opportunity would allow AbbVie to improve its position as an active player when it comes to cancer treatments, as the drug proved to not only be clinically efficient but has also raised care standards for oncologic patients, the company is surely also pleased to no longer have to rely solely on Humira, its best-selling rheumatoid arthritis compound.
Imbruvica comes in the form of an oral pill and represents a $100,000 yearly cost for patients and their healthcare insurers. With such figures, AbbVie could be looking at annual sales of over $3 billion within the following three years.
“[Imbruvica] is the only therapy to have received three breakthrough therapy designations by the FDA,”
AbbVie officials said when during the statement meant to announce the deal it had made with Pharmacyclics, a company that had an$86 million net income in 2014.
It’s true that some analysts fear that the newly acquired drug will most likely overlap with AbbVie’s ABT-199, a top pipeline oncology product, the company is certain that neither drug will interfere with the other’s performance. In fact, Bloomberg analyst AsthikaGoonewardene believes that having two dogs in the race could only work in AbbVie’s benefit.
Close to mid-year, 58% of the deal should be already paid (in cash) while the remaining 42% are due in stock, AbbVie said.
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