AbbVie to acquire Pharmacyclics for $21 billion

AbbVie will fund the transaction with a mix of cash and AbbVie common shares; the deal is expected to close in the middle of this year

Kelsey Kaustinen
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NORTH CHICAGO, Ill. & SUNNYVALE, Calif.—AbbVie is giving its pipeline a boost with the announcement of a definitive agreement to acquire cancer drugmaker Pharmacyclics for $261.25 per share, which will be paid with a mix of cash and AbbVie equity, for a total transaction value of approximately $21 billion. Both companies' boards of directors have approved the transaction.
"Team Pharmacyclics is honored and enthusiastic to join the AbbVie organization. We share a common purpose. Together and as one, our focus remains to create a remarkable difference for patient betterment around the world," Bob Duggan, chairman and CEO of Pharmacyclics, commented in a statement on the deal.
Per the terms of the agreement, AbbVie will acquire all outstanding shares of Pharmacyclics common stock through a tender offer, which will be followed by a second-step merger. In the tender offer, AbbVie will offer to acquire all of Pharmacyclics' outstanding shares for $261.25 per share, paid for in a mixture of cash and AbbVie common stock. Pharmacyclics stockholders can choose cash, AbbVie common stock or a combination, subject to proration, and the aggregate consideration will consist of roughly 58 percent cash and 42 percent AbbVie common stock. The closing of the offer is subject to customary closing conditions, including regulatory approvals and the tender of a majority of Pharmacyclics' outstanding shares. Whatever shares aren't tendered to the offer will be acquired by AbbVie through a second-step merger, which will take place after the tender offer expires and without a vote by Pharmacyclics' stockholders. The deal is expected to close in mid-2015.
With this acquisition, AbbVie gains Pharmacyclics' Imbruvica, a Bruton's tyrosine kinase (BTK) inhibitor approved in four indications for the treatment of three different types of blood cancers, including chronic lymphocytic leukemia, mantle cell lymphoma and Waldenstrom's macroglobulinemia. The drug received initial U.S. Food and Drug Administration (FDA) approval in 2013, and so far stands as the only drug to have received three Breakthrough Therapy designations from the FDA.
"The acquisition of Pharmacyclics is a strategically compelling opportunity. The addition of Pharmacyclics' talented and innovative team will add enormous value to AbbVie," Richard A. Gonzalez, chairman and CEO of AbbVie, said in a press release. "Its flagship product, Imbruvica, is not only complementary to AbbVie's oncology pipeline, it has demonstrated strong clinical efficacy across a broad range of hematologic malignancies and raised the standard of care for patients."
Pharmacyclics' pipeline also includes Abexinostat HCI, a histone deacetylase inhibitor, which is being advanced in hematologic cancer; a Factor VIIa inhibitor; and a BTK inhibitor, which is being advanced in autoimmune diseases. Pharmacyclics is also seeking approval for Imbruvica in additional indications, including diffuse large B-cell lymphoma, follicular lymphoma, marginal zone lymphoma, multiple myeloma, graft-vs.-host disease, acute myeloid leukemia and acute lymphoblastic leukemia.

Kelsey Kaustinen

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