Humira: Will AbbVie's Patents Keep Out Biosimilars For Its TNF-Blocker Blockbuster?
Markman Advisors • 21 Comments
Markman Advisors • 21 Comments
AbbVie Clearance Sale Going On Now
Chris DeMuth Jr. • 26 Comments
Chris DeMuth Jr. • 26 Comments
Tue, Jul. 19, 10:50 AM
- Prompted by moderating growth from traditional drug sales, large cap drug/biotech firms have their sights set on developers of cancer therapies, in particular immunotherapies, to boost both their top and bottom lines. Roche (OTCQX:RHHBY -1.5%), Amgen (AMGN +0.1%), Sanofi (SNY -1.3%) and Gilead Sciences (GILD -1.2%) are all actively on the prowl for acquisitions.
- Medivation (MDVN +0.1%), with its prostate cancer drug Xtandi (enzalutamide), is currently in play. Sanofi has been the most aggressive with two unsuccessful bids, but Pfizer (PFE) and Celgene (CELG -0.6%) are supposedly interested.
- Analysts say Incyte (INCY -0.4%), with polycythemia vera and myelofibrosis drug Jakafi (ruxolitinib), and Seattle Genetics (SGEN -0.8%), with lymphoma drug Adcetris (brentuximab vedotin), are the most attractive takeover targets.
- Recent transactions include AbbVie's (ABBV -0.3%) buyout of Stemcentryx, Jazz Pharmaceuticals' (JAZZ -0.8%) takeout of Celator Pharmaceuticals and Bristol-Myers Squibb's (BMY -0.2%) acquisition of Cormorant Pharmaceuticals.
Thu, Apr. 28, 7:56 AM
- AbbVie (NYSE:ABBV) acquires South San Francisco-based Stemcentrx for ~$5.8B in cash and stock. The deal includes ~$2.0B in cash and could include an additional $4B if regulatory and clinical milestones are achieved.
- Stemcentrx, founded in 2008, develops cancer therapies that target cancer stem cells. It has five drug candidates in clinical development. Promising results have been observed in small cell lung cancer, triple-negative breast cancer, ovarian cancer and peritoneal cancer.
- The deal will dilute earnings ~$0.20 this year. Accretion should begin in 2020. AbbVie's updated 2016 non-GAAP EPS is $4.62 - 4.82.
- AbbVie will host a conference call this morning at 9:00 am ET to discuss the transaction.
Jul. 28, 2015, 2:38 AM
- So what's Allergan (NYSE:AGN) doing with all that cash from the Teva deal? CEO Brent Saunders plans to use the money to increase the size of the firm's existing drug business, expand into new therapy areas and pursue larger deals.
- When asked if Allergan planned to spend the cash within 18 months, Saunders replied that he would, as long as the company could maintain its investment-grade credit rating.
- Possible targets: Biogen (NASDAQ:BIIB), AbbVie (NYSE:ABBV) and Amgen (NASDAQ:AMGN).
- Previously: Teva to buy Allergan Generics for $40.5B (Jul. 27 2015)
Mar. 10, 2015, 3:51 PM
- Traders spread their love beyond the rumored acquisition target-stoked up move of Acadia Pharmaceuticals (ACAD +17.7%) to Geron (GERN +12.3%). Shares are up on a whopping 24M shares. Speculators are betting that Geron will be taken out, possibly by Johnson & Johnson (JNJ -0.8%), after the latter was outbid by AbbVie (ABBV +0.9%) for Pharmacyclics (PCYC).
- Previously: Geron gets boost from AbbVie-Pharmacyclics deal (March 5)
- Previously: Acadia Pharma now +17.7% as it cancels out of another conference (March 10)
Mar. 5, 2015, 10:07 AM
- On its conference call this morning to discuss the acquisition of Pharmacyclics (PCYC +10.6%), AbbVie (ABBV -2.4%) CEO Rick Gonzalez said that three companies were in the final bidding for the Imbruvica maker in an intensely competitive process. He said that a disclosure will be forthcoming that will provide additional details of the bids.
- The transaction will be accretive to earnings beginning in 2017, adding $0.60 to EPS in 2019 and more than $1.00 by 2021. The incremental sales in 2019 are projected to be >$4B.
- Imbruvica sales should be >$1B in the U.S. this year and peak at >$7B (ABBV's portion). Peak global sales may be ~$11.5B, but J&J's (JNJ +1.1%) contribution is its responsibility so no firm forecast is appropriate.
- Peak sales of the oncology portfolio of both companies could be >$20B by the mid-2020s.
- Mr. Gonzalez said that Humira's status had no bearing on the deal. He was confident with his top seller's long-term prospects, citing two new indications and the pending new formulation that will provide patent protection until the early 2030s. He also said AbbVie will vigorously defend Humira's IP against biosimilars.
- The transaction is 58% in cash and 42% in stock. The final number of ABBV shares will be determined at the time of closing in Q2. About 50% of the stock will be sourced from buybacks and half newly issued. The Board has authorized a $5B increase in its share repurchase program. There will be a 20% dilution to current shareholders. Updated 2015 Non-GAAP EPS is now $4.05 - 4.25 from $4.25 - 4.45.
Mar. 5, 2015, 8:52 AM
- AbbVie's (NYSE:ABBV) extraordinarily generous buyout of Pharmacyclics (NASDAQ:PCYC) is a crystal clear example of how keen big pharma is to boost its prospects with biotech drugs with blockbuster potential. The transaction's $20B tab, backing out PCYC's $1B cash balance, values Imbruvica (ibrutinib) at $40B since Pharmacyclics' commercial partner Johnson & Johnson (NYSE:JNJ) gets 50% of Imbruvica's revenue. This implies a multiple of almost 7x Imbruvica's projected peak sales of $6B. By comparison, Amgen's (NASDAQ:AMGN) takeout of Onyx Pharma and Sanofi's (NYSE:SNY) takeout of Genzyme were both at 5x premiums.
- The looming patent expiration for Humira ($12.5B in sales the past four quarters) undoubtedly provided AbbVie extra incentive to get the deal done.
- Adding 50% of Imbruvica's sales to AbbVie's top line should increase its revenue growth 3 - 7% and EPS growth 8 - 11% through 2020.
- According to RBC analyst Michael Yee, other biotechs on the big ticket acquisition radar are: BioMarin Pharmaceuticals (NASDAQ:BMRN), Dyax (NASDAQ:DYAX), Esperion Therapeutics (NASDAQ:ESPR), United Therapeutics (NASDAQ:UTHR), Vertex Pharmaceuticals (NASDAQ:VRTX), Intercept Pharmaceuticals (NASDAQ:ICPT), Juno Therapeutics (NASDAQ:JUNO), Kite Pharma (NASDAQ:KITE), PTC Therapeutics (NASDAQ:PTCT) and Receptos (NASDAQ:RCPT).
Mar. 4, 2015, 11:39 PM
- Both boards have signed off on AbbVie's (NYSE:ABBV) $21B surprise acquisition of Pharmacyclics (NASDAQ:PCYC), announced a short while ago amid speculation that Johnson & Johnson (NYSE:JNJ) (or, earlier, Novartis (NYSE:NVS)) would be the one to acquire the cancer biotech.
- With the deal, AbbVie gets Pharmacyclics' blockbuster Imbruvica drug for hematologic malignancies -- which logged $548M in revenues in 2014 (Q4 earnings) and might go all the way to $5B/year. Imbruvica has received four indications in less than 15 months -- the latest being for Waldenström's Macroglobulinemia at the end of January.
- And with Imbruvica, AbbVie can lessen its reliance on its key drug Humira, an aging rheumatoid arthritis medication.
- The acquisition is expected to close in the middle of the year.
- Question: What happened to Pharmacyclics' Imbruvica partner JNJ on this deal?
- Previously: Pharmacyclics Q4 revenue up 135%, Imbruvica growing exponentially (Feb. 18 2015)
Mar. 4, 2015, 11:04 PM
- AbbVie (NYSE:ABBV) says it will be the one to acquire cancer biotech Pharmacyclics (NASDAQ:PCYC), with a surprise bid of about $21B: $261.25/share in cash and equity.
- Pharmacyclics closed up 6.3% today to $230.48 (and gained another 2.9% after hours) on rumors that Johnson & Johnson (NYSE:JNJ) was making a bid for the $17B company.
- Previously: Pharmacyclics up on rumored J&J interest (Mar. 04 2015)
- Previously: Pharmacyclics up on potential buyout (Feb. 25 2015)
Feb. 6, 2015, 9:20 AM
- According to some observers, Pfizer's (NYSE:PFE) $17B takeout of Hospira (NYSE:HSP) is only a prelude to a bigger deal(s) considering that it was prepared to spend $120B for AstraZeneca (NYSE:AZN).
- According to Gabelli analyst Kevin Kedra, Actavis Plc (NYSE:ACT) is an attractive target, especially since nabbing Allergan (NYSE:AGN) and its fast-growing drug portfolio. A Pfizer takeover would be big enough to overcome the U.S. Treasury's stricter rules on inversions and lower its tax bill.
- John Boris of SunTrust Banks says GlaxoSmithKline (NYSE:GSK), AbbVie (NYSE:ABBV), Bristol-Myers Squibb (NYSE:BMY) and Mylan (NASDAQ:MYL) may be on the radar as well.
- Pfizer had $33B in cash at the end of September which it will use a portion of plus debt to pay for Hospira.
Jan. 12, 2015, 1:50 AM
- Shire (NASDAQ:SHPG) is buying NPS Pharmaceuticals (NASDAQ:NPSP), a maker of treatments for rare diseases, for $5.2B ($46 per share), a 51% premium to its share price on December 16, before rumors of the deal first surfaced.
- The all-cash acquisition comes just three months after Shire’s proposed $54B sale to AbbVie (NYSE:ABBV) collapsed as a consequence of U.S. government efforts to limit tax-inversions. Shire received a $1.6B breakup fee after AbbVie walked away.
- Previously: NPS Pharma up 20% on takeover buzz (Dec. 17 2014)
Oct. 20, 2014, 5:35 PM
Oct. 20, 2014, 12:43 PM
- The collapse of Abbvie's (ABBV +0.6%) planned takeover of Shire plc (SHPG +2.4%) opens a door for Allergan (AGN +2%) to fend off the hostile bid from Valeant (VRX +2.2%). Institutional shareholder Paulson & Co., which owns stakes in both firms, favors the marriage.
- Allergan CEO David Pyott received a call from Shire last week. If a deal gets done it will make Allergan too expensive for Valeant to acquire. The chances of a deal appear reasonable. Allergan contacted Shire about a combination some time ago.
Oct. 16, 2014, 7:14 AM
- Abbvie's (NYSE:ABBV) Board of Directors recommends that shareholders vote against its proposed ₤32.5B takeover of Shire plc (NASDAQ:SHPG) due to the change in tax rules that no longer justifies the transaction. The deal is dead.
- Shire was down 8% at around noon in London trading after it lost 22% yesterday. This morning in the U.S. it is up 2% premarket on turnover of 128K shares.
Oct. 14, 2014, 9:57 PM
- Score one for the U.S. Treasury whose new rules aimed at discouraging tax inversion deals may have put a halt to the planned purchase of Shire (NASDAQ:SHPG) by AbbVie (NYSE:ABBV). The AbbVie board has not yet withdrawn or modified its recommendation that shareholders approve the merger, but it has notified Shire of its intention to reconsider.
- “AbbVie’s board will consider, among other things, the impact of the U.S. Department of Treasury’s proposed unilateral changes to the tax regulations announced on September 22, 2014, including the impact to the fundamental financial benefits of the transaction."
- ABBV -2.1%, SHPG -8% in after-hours trade
Sep. 23, 2014, 7:45 AM
- U.S. Treasury Secretary Jack Lew says that the Obama Administration is prepared to institute rules to stop tax inversion deals. If so, it will do so without a sliver of Republican support. Barclays analyst Michael Leuchten says, "Washington is playing for time. It makes them look good and it allows Congress to maybe get its act together and maybe do something on the legislative side."
- Mr. Lew's comments have spooked the market a bit. European companies already involved in deals or rumored to be targets are all under pressure due to the perception that some of the deals already announced may be at risk.
- The U.S. firm in the best position is Horizon Pharma (NASDAQ:HZNP). It completed its tax inversion transaction with Ireland-based Vidara Therapeutics last week.
- Related tickers: (MDT -0.4%)(COV -0.5%)(ABBV -0.6%)(SHPG -0.7%)(OTCQB:SHPGF -1.5%)(PFE -0.7%)(AZN -0.1%)(SNN +0.1%)(SYK -0.8%)
Jul. 18, 2014, 6:14 AM
- After many weeks of takeover talks, AbbVie (NYSE:ABBV) has finally closed on a $53B deal with Shire (NASDAQ:SHPG) in the pursuit of a strategic tax inversion and new drug portfolio.
- Under the cash-and-stock deal, AbbVie will pay £52.48 per share for Dublin-based Shire, consisting of £24.44 in cash and 0.8960 of new AbbVie shares.