AbbVie to buy leukemia drugmaker Pharmacyclics for $21 billion

On Wednesday, pharmaceutical major AbbVie announced that it has entered into a deal worth $21 billion with cancer biotech Pharmacyclics Inc. AbbVie Inc. will buy Pharmacyclics in a cash and stock deal.

The deal, which would be a mix of cash and stock, would allow AbbVie to have its presence in the multibillion-dollar blood-cancer market. Secondly, the deal would reduce AbbVie's dependence on an aging rheumatoid-arthritis drug, which makes most of its sales.

Last year, AbbVie had an agreement worth $54 billion as per which it would buy Irish drug company Shire PLC. But it walked away after the Obama administration increased the strictness level in order to deter such tax-lowering deals.

AbbVie stated that the deal is expected to close by the middle of this year. Pharmacyclics, of Sunnyvale sells a drug called Imbruvica with partner Johnson & Johnson. The drug has been permitted for two types of blood cancer, lymphoma and a form of leukemia.

In January, the US Food and Drug Administration allowed the drug to be used for a rare form of cancer that affects the immune system. In its first year, the pill led to $548 million world-wide net product revenue.

It is expected that the pill sales will reach $1 billion this year. Some analysts were of the view that its sales could peak at $5 billion a year. They affirmed the same after knowing about its performance in clinical trial.

These expectations will prove highly beneficial for AbbVie. As per experts, the deal would provide AbbVie an experienced sales force for marketing to doctors who treat blood cancers. AbbVie has partnership with Roche Holding AG to co-develop venetoclax meant for patients with chronic lymphocytic leukemia.

AbbVie may file for the regulatory approval of the drug by the end of this year.