Tue, Mar. 10, 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)
Thu, Mar. 5, 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.
Thu, Mar. 5, 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).
Wed, Mar. 4, 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)
Wed, Mar. 4, 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)
- Press release
Wed, Feb. 25, 1:43 PM
Aug. 12, 2013, 11:11 AM
- Royalty Pharma says that pursuant to its collaboration with Aisling Capital and Clarus Ventures, it has sold the two companies around 20% of its royalty interest in Ibrutinib it recently acquired from Quest Diagnostics (DGX -0.2%).
- In payment, its will receive a pro rata percentage of the $485M it paid to Quest for the royalty.
- Pharmacyclics (PCYC +0.1%) and Johnson & Johnson (JNJ +0.3%) subsidiary Janssen Pharmaceuticals filed Ibrutinib with the FDA in July 2013 for the treatment of lymphoma and relapsed/refractory chronic lymphocytic leukemia, and currently has received three of the eight Breakthrough Therapy Designations granted by the FDA to date in oncology.
Jul. 18, 2013, 8:19 AM
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