AbbVie to Acquire Pharmacyclics, Ibrutinib for $21 Billion

Richard A. Gonzalez, chairman and chief executive officer of AbbVie, said during a webcast

AbbVie CEO, Richard A. Gonzalez

Through a $21 billion acquisition of Pharmacyclics, AbbVie has announced plans to acquire the blockbuster BTK inhibitor ibrutinib (Imbruvica). Under the terms of the agreement, AbbVie will pay $261.25 per share for Pharmacyclics, totaling $20.2 billion (a 39% premium). The funds will consist of 58% cash and 42% AbbVie common stock. The transaction was approved by both companies and is expected to complete in mid-2015, pending regulatory approvals.

“This acquisition enables us to build a strong leadership position in the hematological oncology space, an attractive and rapidly growing market now approaching $24 billion globally,” Richard A. Gonzalez, chairman and chief executive officer of AbbVie, said during a webcast. “Within this category, Pharmacyclics currently holds a strong position in the B cell malignancy segment.”

An extensive clinical trial program is currently exploring ibrutinib across a number of settings, including 13 phase III clinical trials. Within the next year, AbbVie anticipates new indications for ibrutinib in the first-line setting for patients with mantle cell lymphoma (MCL) and chronic lymphocytic leukemia (CLL). Additionally, within the next 3-5 years, indications are anticipated in diffuse large B-cell lymphoma, follicular lymphoma, and multiple myeloma.

Given this extensive clinical trial program, a number of companies expressed interest in acquiring Pharmacyclics. Prior to the acquisition by AbbVie, the leading contender appeared to be Johnson & Johnson, the parent company of Janssen, which jointly developed and commercialized ibrutinib with Pharmacyclics.

“I've been through a lot of these, and I'd say this was probably one of the most competitive ones that I've seen,” Gonzalez said about the bidding process for Pharmacyclics during a question and answer portion of the webcast. “There were multiple companies that were competing, there were multiple rounds for this asset, and three companies stayed in until the very end and bid against each other in this process.”

The FDA approved ibrutinib for patients with MCL who received at least one prior therapy in November 2013. Ibrutinib was approved for patients with previously treated CLL in February 2014, which was followed by a full FDA approval and a new indication for high-risk patients with 17p deletions in July 2014. In late January 2015, the FDA expanded this indication to include the treatment of patients with Waldenström’s macroglobulinemia.

“Through this acquisitions, AbbVie obtains a rapidly growing on-market asset, Imbruvica, a novel and first-in-class BTK inhibitor with multibillion dollar revenue potential,” said Gonzalez. “Imbruvica is a strategically important asset, which we believe AbbVie and Pharmacyclics are uniquely positioned to maximize.”

AbbVie's lead cancer agent, the Bcl-2 inhibitor venetoclax (ABT-199), is in late stage development, in collaboration with Genentech. The agent is being explored as a potential treatment for CLL, non-Hodgkin lymphoma, and multiple myeloma.

In a phase Ib study of venetoclax in combination with rituximab for patients with relapsed or refractory CLL, the overall response rate with the combination was 86%, with 31% complete remissions. An ongoing phase III study is comparing venetoclax plus rituximab with bendamustine plus rituximab for patients with CLL (NCT02005471).

In September 2014, AbbVie announced a $275 million collaboration with Infinity Pharmaceuticals to codevelop and commercialize the PI3K-gamma and delta inhibitor duvelisib (IPI-145). Additionally, $530 million is contingent upon potential milestones. Duvelisib is positioned to be a direct competitor with the already approved idelalisib (Zydelig), which is approved for various NHL indications.

“The acquisition of Pharmacyclics is highly complementary with our existing oncology pipeline, which is comprised of over 5 late-stage assets poised to launch over the next 5 years,” Gonzalez said. “This includes the Bcl-2 inhibitor ABT-199 and the dual PI3 kinase inhibitor duvelisib.”

The collection of these agents provides the opportunity for novel combination strategies, given the variety of mechanisms of action. In a preclinical study presented at the ASH Annual Meeting, the combination of ABT-199 and ibrutinib had activity in circulating tumor cells from patients with CLL and MCL.

In the ASH analysis, the combination induced cellular apoptosis in 23% of samples compared with 3.8% for single-agent ibrutinib and 3.0% with ABT-199. Clinical trials assessing the combination are planned.

"These two novel agents work through mechanisms that are very complementary," Michael E. Severino, MD, executive vice president, Research & Development and chief scientific officer of AbbVie, said during the webcast. "There's very strong mechanistic evidence to believe they will work together very well. By bringing these two novel agents together, we believe we'll be able to explore novel combinations and sequences of therapy that will allow us to address a wide range of hematologic malignancies and elevate the standard of care."