AbbVie Inc (NYSE:ABBV) Place The Highest Bid For Pharmacyclics, Beats Johnson & Johnson (NYSE:JNJ)

Until Wednesday evening, it looked like Johnson & Johnson (NYSE:JNJ) had grabbed one of the most ambitious deals of US biotech industry by beating their rivals such as Goldman Sachs. But things suddenly changed the last moment. According to reports, JNJ’s offer for Pharmacyclics was outmaneuvered by AbbVie Inc (NYSE:ABBV). The latter placed a higher bid of $21 billion, which was something more than what JNJ could afford to execute.

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Pharmaceutical Deal Making On Newer Heights:

Various companies were trying for over a year to grab this deal, but none of them could go as high as AbbVie. It was probably the highest bid that pharmaceutical field witnessed in the recent past. According to Rick Gonzalez, it was one of the most difficult and competitive price wars that he had experienced ever. There were many other companies that wanted to own the maker of the Imbruvica leukaemia drug, but they couldn’t beat the bid amount of AbbVie.

Gonzale stated that a lot of companies were in the race and kept on bidding against each other till last moment. AbbVie Inc (NYSE:ABBV) was committed to grabbing this deal; hence, it decided to place the highest bid. If taken into consideration the entire pharmaceutical industry, one can easily note that the industry witnessed more than $300 billion worth of M&A deals in the last one year. The current deal is one of the biggest amongst all of them. This number is way higher than the mega-mergers that took place during the late 1990s and early 2000s.

The race started when the Forest Laboratories was bought by Actavis for $25 billion in the first half of the last year. One of the senior bankers says that all the companies feel pressure if they don’t indulge in M&A deals, which are getting expensive, with each bid.



Erica is a graduate of New York University's school of Journalism. She joined US Markets Daily as a general assignment reporter in January of 2008.