AbbVie Inc plans to purchase Pharmacylclics Inc. for approx. US$21 billion to beef up its pipeline and make available to it one of the leading blood cancer treatment drugs, Imbruvica, and eventually broaden its scope in the oncological medicine.

Anticipated to be closed by mid year, the deal is predominantly a cash buy at 58% and the rest is for AbbVie common stock. This entitles Pharmacyclics stakeholders to either cash, Abbvie shares or a mix of both.

Like Us on Facebook

AbbVie will pay US$261.25 per share in cash and stock, 13 percent above market price to the biotech firm Pharmacyclics's closing priceon Wednesday.

The buyout allows the drug maker to expand beyond its popular rheumatoid arthritis drug Humira, a big revenue driver, whose sales unfortunately are seen to go downhill in the coming years. AbbVie regards the deal as "highly accretive" to its revenues and earnings by 2017.

"Imbruvica is not only complementary to AbbVie's oncology pipeline, it has demonstrated strong clinical efficacy across a broad range of hematologic malignancies," notes Richard Gonzales, AbbVie Chief Executive.

A poll by Reuters show analysts see Imbruvica reaching US$1 billion in U.S. sales for 2015 and US$5.8 billion in worldwide sales by 2020.

While there are people in favor of the deal, like Robyn Karnauskas, a Deutsche Bank analyst who believes it is beneficial for Abbvie as it diversifies the business beyond the Humira, there are those who think otherwise.

Some are surprised to find that it was not Johnson & Johnson (J&J) taking over. In fact, media reports indicate that the multinational J&J was eyeing the company and quite near acquiring it with Novartis AG as a likely contender to the purchase.

J&J and Pharmacyclics co-market the blood cancer treatment drug and have three products in development.

"We're looking forward to continuing our collaboration with the team at AbbVie to further develop and commercialize this important therapy for patients and their health care teams," remarks J&J.

TagsAbbVie, Pharmacyclists, Acquisition, Imbruvica, Cancer treatment