AbbVie Inc (NYSE:ABBV) Extends Expiration Of Exchange Offer

AbbVie Inc (NYSE:ABBV) disclosed its decision to extend the deadline date of its exchange offer to acquire Pharmacyclics, Inc. (NASDAQ:PCYC). The company had initially announced to purchase Pharmacyclics by March 2015, in a deal valued at $21 billion. However, now it extended the date to take over Pharmacyclics until May 1 this year.

Why is momentum shifting in ABBV?  Read this analyst breakdown.

The plans

AbbVie intends to increase its oncology drugs portfolio and boost its presence in the cancer drugs market. The acquisition of Pharmacyclics would allow AbbVie to get the right over potential cancer drug, Imbruvica. It has been already approved by the U.S. FDA for treating four major indications. The list of approved indications covers three types of blood cancers Waldenstrom’s macroglobulinemia, mantle cell lymphoma and lymphocytic leukemia.

The significance of deal

Moreover, the drug is approved in over 40 nations cross the world and is anticipated to cross $1 billion in sales in 2015. The sales are expected to surge to as high as $3.56 billion by year 2018. The inclusion of Imbruvica to cancer drugs portfolio will help AbbVie to boost its sales. The company had been struggling to post strong sales from past few years. The deal will become highly accretive for the company by 2017.

The agreement details

As per the terms of the deal, AbbVie Inc (NYSE:ABBV) accepted to pay $261.25 for each of PCYC shares in a transaction comprising 58% of cash and 42% of AbbVie’s shares. The acquisition deal’s value represents a premium offered by the company of almost 20.5% compared to the closing price of PCYC stock of $216.76 before AbbVie disclosed its final acquisition offer. The company’s decision to extend the final exchange offer until May 1 will have no impact on the other terms and conditions of the deal that had been finalized before. If everything goes as planned, the deal is expected to conclude by 2Q2015.

Scott Sally

Scott Sally

Sally joined the US Markets Daily News Team in April 2011 as a Multimedia Journalist.