Abbvie beats J&J to clinch €19bn takeover
AbbVie beat out Johnson & Johnson with a last-minute bid that clinched the $21bn (€19bn) acquisition of Pharmacyclics, gaining control of a blockbuster blood cancer therapy.
AbbVie, based in North Chicago, Illinois, will pay $261.25 a share using a mix of cash and its own stock, the two companies said.
Pharmacyclics was nearing an agreement to be acquired by J&J, which was offering about $250 a share, before AbbVie topped the bid, said a person with knowledge of the matter who asked not to be identified as the details are private.
The purchase would help AbbVie reduce its reliance on Humira, its best-selling rheumatoid arthritis treatment, while expanding into the lucrative area of cancer therapy.
It would gain control of Imbruvica, a pill that costs about $100,000 a year, avoids certain serious side effects of chemotherapy, and is already approved for four different blood cancer uses.
AbbVie's price is 39pc higher than Sunnyvale, California-based Pharmacyclics's closing price on February 24, the day before Bloomberg News reported that the company was considering a deal.
Amy Jo Meyer, a spokeswoman at the New Jersey-based J&J declined to comment. Pharmacyclics had net income last year of $86m, according to data compiled by Bloomberg.
However, sales of Imbruvica are expected to grow to $3.56bn in 2018 from $492m last year, according to an average of estimates by analysts surveyed by Bloomberg, as it's used in more types of cancer.
While Imbruvica will overlap with one of AbbVie's top pipeline products, ABT-199, there should be room for both, said Asthika Goonewardene, an analyst with Bloomberg Intelligence.
It may take until 2016 for ABT-199 to be approved.
While Imbruvica has shown itself to be a preferred drug for many patients, others may benefit from a different therapy.
"Given all this, having two dogs in the race may not be a bad thing," Ms Goonewardene said in an e-mail.
AbbVie was split off from parent Abbott Laboratories in 2013. It said that it expects about 58pc of the purchase to be paid in cash and the rest in stock, with the transaction closing mid-year.