AbbVie is to buy Pharmacyclics Inc for about $21 billion. As Hayley Platt reports it continues a growing M&A trend in the sector and will give the drugmaker access to what is expected to be one of the world's top-selling cancer drugs.
A strategic move that will give AbbVie access to important cancer drugs. It's agreed to buy US drugmaker Pharmacyclics - which makes the blockbuster drug Imbruvica. The deal worth $21 billion will help AbbVie broaden its pipeline. And make it less reliant on its best seller Humira - which helps sufferers of rheumatoid arthritis. Mike Ward is pharmaceuticals expert at Script Intelligence SOUNDBITE: Mike Ward, Global Head of Content. Script Intelligence, saying (English): "When that goes off patent the value of the drug disappears dramatically. So therefore that can be a big hole, so for example when Humira goes off patent, that's 12.5 billion dollars, a lot of that is going to disappear within the first year." The move follows AbbVie's failed $55 billion dollar bid last October for Dublin-based Shire. It reportedly beat-off stiff competition from rivals Johnson & Johnson and Novartis. Pharmacyclics' star cancer drug is already approved in more than 40 countries. And is expected to make sales of $1 billion in the US alone this year. Worldwide its could make $5.8 billion by 2020 JP Morgan's David Stubbs says he's not surprised by the deal. SOUNDBITE: David Stubbs, "I think it shows that there is a lot of innovation happening in the sector and owning those assets, the research assets which fund that pipeline for your revenue is so important. It also shows that the finance for this kind of deal is there and the credit systems are working for the corporations in this space." The deal is the latest in a spate of big pharma tie-ups this year by companies seeking to improve their drug portfolios as patents expire. Last month Pfizer agreed to buy Hospira for around $15 billion. And Canada's Valeant Pharmaceuticals is buying Salix for $10 billion. AbbVie will pay $261 per share in cash and stock. That's 13 percent above Pharmacyclics closing stock's price on Wednesday.