AbbVie (NYSE: ABBV) and Pharmacyclics (NASDAQ:PCYC) entered into an agreement where AbbVie would acquire the drug manufacturer in a $21 billion dollar deal. News of the deal rocked the stock market Thursday sending investors into a frenzy. Many analysts expressed concern with the high stock price paid – $261.25 – which put the value of Pharmacyclics at $21 billion.
Known for the prescription medicine Imbruvica, Pharmacyclics has been the top drug for treating hematological malignancies. The prescription is known as a BTK (Bruton Tyrosine Kinase) inhibitor that was approved for use in select types of blood cancers including lymphocytic leukemia, mantle cell lymphoma and Waldenstrom’s macroglobulinemia. Approved by the FDA in the United States, Imbruvica received three breakthrough therapy designations by the FDA. The drug is also approved in more than 40 countries around the world for treatment.
“The acquisition of Pharmacyclics is a strategically compelling opportunity. The addition of Pharmacyclics’ talented and innovative team will add enormous value to AbbVie,” said Richard A. Gonzalez, chairman and chief executive officer, AbbVie.
The deal will allow AbbVie to purchase all the outstanding common stock of the Pharmacyclics company for $261.25 per share. AbbVie will use both cash reserves and their stock for the purchase. The company makes the acquisition just after they attempted a takeover of Shire Pharmaceuticals in 2014 which fell through after U.S. government scrutiny.
In Thursday trading, Pharmacyclics stock rose over ten percent to $254.76 after the announcement was made this morning.
“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,” said Bob Duggan, chairman and chief executive officer of Pharmacyclics.
AbbVie is the Chicago-based manufacturer of Humira, an autoimmune blocker prescription drug.