AbbVie, the pharmaceutical giant is all set to acquire Pharmacyclics Incorporated. The deal is going to cost $21 billion in company treasury. There is a lack of consensus among the shareholders of the company about the price paid by official for this acquisition.
Pharmacyclics Incorporated has produced Imbruvica, a blood cancer treatment which is marketed by Janssen Biotech, A Johnson & Johnson operated firm. As per the estimate by the AbbVie officials, the profitable blood cancer treatment will give business of $7 billion annually to the company.
Imbruvica is a capsule which stops protein, results in stopping cancer to multiply and grow if taken once in a day. The application of drug is sanctioned in 40 countries worldwide. Three types of blood cancer can be treated by Imbruvica along with most common leukemia in adults called chronic lymphocytic leukemia.
The company plans to add new uses of Imbruvica in addition to present uses. The aim is to make its first preferred treatment. If the Doctors are using the drug in most initial phases, then it will definitely generate more profit to the firm.
However, the move comes after realizing that the company is going to face difficult times in the year 2016 as its arthritis drug patent will expire in the same year.
AbbVie’s large chunk of revenue comes from the same drug. For more revenue, the company is dependent on Imbruvica. This can also help them to survive in the market after the patent for high selling arthritis drug Humira. Humira has given around $13 billion sale to the firm last year.
Many experts are surprised by the cost of the deal with some calling it an ‘overpriced’ deal. The investors have reacted by bringing the cost of the AbbVie’s stock down on Thursday.
AbbVie has left Johnson & Johnson behind in the bidding which was offering $250 per share for Pharmacyclics.