Chicago-based pharmaceutical company AbbVie won a late-night bidding war for a California biotech firm, taking the value of healtcare deals to nearly US$500 billion in the past 15 months.
AbbVie offered US$21 billion for Pharmacyclics, a biotech company that makes a single cancer drug, beating two other bidders, the Financial Times reported Friday.
Johnson & Johnson, which has had a partnership with Pharmacyclics since 2011, was confident about winning the contest as late as a day before one of the most competitive bidding wars for years.
On Thursday, AbbVie unveiled details of its US$261.25-a-share winning bid, which narrowly beat both J&J and a third unidentified bidder.
The deal, funded 58 per cent in cash with the remainder in shares, values the 18.1 per cent stake held by Robert Duggan, Pharmacyclics’ chief executive and largest shareholder, at US$3.5 billion.
The final offers was more than double the level at which Pharmacyclics shares were trading in early January.
Pharmacyclics makes Imbruvica, a prescription drug for treating leukemia and lymphoma.
Almost US$70 billion of mergers and acquisitions have been announced in the pharmaceutical and biotech sectors this year, according to Thomson Reuters.
That’s more than twice the activity by the same point in 2014 and the strongest start to a year in over a decade.
Since the start of 2014, the global healthcare sector has seen US$475 billion of deals.
Earlier, Valeant acquired gastrointestinal drugmaker Salix for US$14.5 billion, Pfizer bought Hospira for US$17 billion and Shire picked up NPS Pharma for US$5.2 billion.
“I’ve been through a lot of these [deals], and I’d say this was probably one of the most competitive ones I’ve seen,” said Richard Gonzales, AbbVie chief executive.
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