AbbVie Announces Plan to Acquire Allergan in "Transformational" Move

Drug maker AbbVie today announced that it has reached a $63 billion transaction agreement under which it will acquire Allergan.

Drug maker AbbVie today announced that it has reached a $63 billion transaction agreement under which it will acquire Allergan.

“This is a transformational transaction for both companies and achieves unique and complementary strategic objectives,” said Richard A. Gonzalez, chairman and chief executive officer (CEO) of AbbVie, in a statement announcing the deal. “The combination of AbbVie and Allergan increases our ability to continue to deliver on our mission to patients and shareholders. With our enhanced growth platform to fuel industry-leading growth, this strategy allows us to diversify AbbVie’s business while sustaining our focus on innovative science and the advancement of our industry-leading pipeline well into the future.”

Under the deal, which is expected to close by early 2020, AbbVie will continue to be led by Gonzalez, and 2 members of the Allergan board, including chairman and CEO Brent Saunders, will join the AbbVie board.

According to AbbVie, the combination of the 2 companies’ portfolios and platforms will result in approximately $48 billion in combined 2019 revenue. The combined company should produce enough cash flow to continue growth and investment in its pipeline as well as reduction of debt.

The acquisition comes as AbbVie faces pressure on its flagship drug, Humira, which faced competition in Europe from biosimilar adalimumab for the first time in late 2018. While no adalimumab biosimilars are slated for US launches prior to 2023, the Humira maker has sought to mitigate the impact of biosimilars through the sales of novel agents.

Earlier this year, Michael Severino, vice chairman and president of AbbVie, told investors that non-Humira sales will be driven by AbbVie’s hematologic oncology drugs, as well by upadacitinib and risankizumab in the immunology space.

Allergan, too, has faced setbacks in the form of oncoming competition. The drug maker notably attempted to transfer its patents covering its dry-eye drug, Restasis, to the Saint Regis Mohawk Tribe for a bulk payout, plus the promise of annual royalties, in exchange for invoking sovereign immunity from inter partes review (IPRs). A United States Court of Appeals later ruled that sovereign immunity does not extend to IPRs, opening Allergan to patent challenges and subsequent competition for the top-selling drug.

Notably, Allergan also has a hand in biosimilar development; together with partner Amgen, Allergan recently announced positive topline results from a combined phase 1 and phase 3 study of a proposed biosimilar rituximab, and the partnership has received FDA approvals for a biosimilar trastuzumab, Kanjinti, and a biosimilar bevacizumab, Mvasi.

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