- Pharmacyclics' stock surged last week on news that pharma giants like Johnson & Johnson and Novartis were eyeing the biotech for acquisition—but on Thursday morning, AbbVie announced that it had beat both of those companies to the punch.
- AbbVie will buy Pharmacyclics for $21 billion, representing a 13% premium over the biotech's closing price on Wednesday and just over $261 per share in a cash and stock deal. Analysts had expected J&J or Novartis to strike a deal in the $17 billion to $18 billion range.
- Once finalized, AbbVie will win the rights to Pharmacyclics' almost-certain blockbuster cancer medication Imbruvica (ibrutinib). That gives the Humira-maker a critical boost in its pipeline, with Imbruvica picking up more cancer indications.
AbbVie's motivation for the acquisition boils down to this: It's the pipeline, stupid!
After the company's very public M&A debacle with Ireland-based Shire last year, AbbVie has been wandering the biopharma landscape in search of a strong purchase that would bolster (and, preferably, diversify) its pipeline.
The company's struck gold with its Pharmacyclics deal, which will give AbbVie the rights to Imbruvica. That's crucial given the reality that sales of Humira, currently the top-selling drug in the world, will begin dwindling over the next several years as it loses patent protection.
Imbruvica is expected to exceed $1 billion in sales this year and reach $5.8 billion globally by 2020.