The AbbVie Allergan acquisition marked a significant shift in the pharmaceutical industry. In 2019, AbbVie completed its $63 billion acquisition of Allergan, creating one of the largest pharmaceutical companies in the world.
This massive deal brought together AbbVie's successful treatments for conditions like rheumatoid arthritis and psoriasis with Allergan's dermatology and ophthalmology portfolio. The combined company has a diverse range of products and a global presence.
The acquisition was a strategic move to expand AbbVie's presence in the growing dermatology market. By acquiring Allergan, AbbVie gained access to a range of successful products, including Botox and Restasis.
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Merger Details
The AbbVie-Allergan acquisition was finalized on June 25, 2019, with a total consideration of $63 billion.
AbbVie acquired Allergan for $188 per share, a 10% premium over the company's closing price on June 24, 2019.
The acquisition was a cash-and-stock deal, with AbbVie offering 0.8837 of its shares for each Allergan share.
The combined company will operate under the AbbVie name and will be headquartered in North Chicago, Illinois.
The acquisition is expected to strengthen AbbVie's portfolio in the areas of aesthetics and biosimilars.
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Pharma Industry Outlook
AbbVie's acquisition of Allergan is a strategic move to diversify beyond its top-selling drug Humira, which accounted for nearly 60 percent of the company's total revenue.
Allergan has a more extensive patent portfolio than AbbVie, with 375 pending applications compared to AbbVie's 185.
AbbVie's average prosecution timeline is shorter than Allergan's by approximately 3.2 months, which could be a significant advantage in the pharmaceutical industry.
On average, both AbbVie and Allergan receive 2.3 office actions before disposition, indicating a similar level of scrutiny from the US Patent and Trademark Office.
AbbVie tends to lose more independent claims than Allergan, with an average of 1.1 independent claims lost compared to Allergan's 0.8.
Allergan's ability to maintain the scope of their original application is a key advantage, with a lower average loss of dependent claims compared to AbbVie.
Asset Valuation
The acquisition of Allergan by AbbVie is expected to pay off both companies' shareholders with enhanced value.
AbbVie's strategic portfolio diversification was widely anticipated to minimize its dependence on Humira, and the Allergan acquisition delivers on that goal.
The acquisition will provide immediate and significant accretion on attractive return on capital invested, and debt reduction.
This will further strengthen AbbVie's long-term R&D funding capacity and focus on innovative science and advancement of an industry-leading pipeline.
AbbVie will also benefit from Allergan's attractive portfolio of fast-growing products in therapeutic areas like medical aesthetics, eye care, CNS, and gastrointestinal disorders.
The acquisition opens the door to new opportunities for AbbVie, including enhancing its global commercial presence and maximizing the value of Allergan's products.
Revenue Streams
The ophthalmology portfolio is a stable revenue stream for AbbVie, thanks to Allergan's assets in glaucoma, wet AMD, dry eye disease, and presbyopia.
These assets will continue to generate revenue for AbbVie, but the future of the ophthalmology portfolio will depend on the success of emerging therapies like abicipar pegol in wet AMD and bimatoprost SR in glaucoma.
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Allergan's psychiatry, migraine, and ophthalmology assets will provide a boost to AbbVie's revenue in the near-to-mid-term, if successfully commercialized.
This revenue will help offset AbbVie's losses due to Humira biosimilars and finance its neurology R&D candidates, including alpha-synuclein MAb for PD.
AbbVie's proven lifecycle management expertise with Humira and Allergan's expertise with Botox will support the commercial success of any launched neurology products.
The unmet need and high prevalence in neurology indications like Parkinson's disease make AbbVie's neurology pipeline candidates highly promising.
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Frequently Asked Questions
How much did AbbVie pay for Botox?
AbbVie acquired Allergan Plc for about $63 billion, which includes the lucrative wrinkle treatment Botox. The acquisition price does not specify the exact amount paid for Botox alone.
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