Abbvie merger rumors

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The drug now faces stiff biosimilar competition in Europe. But none of this is news for anyone who has followed the big drugmaker.

This might sound crazy, but I don't think Humira is the main thing that investors should be watching with AbbVie. International sales for the drug are going to plunge over the next few years. Those are givens, though. The more important things for investors to focus on relate to what AbbVie is going to do beyond Humira.

With that in mind, here are four things you need to know about AbbVie. Image source: Getty Images. AbbVie's management team has been preparing for the day that Humira faced biosimilar competition for years. They knew additional products would be needed to offset the inevitable sales declines that would come for the world's top-selling drug.

So they developed and have been executing on a strategy to keep AbbVie among the top-tier performers in the pharmaceutical industry. The company has several challenges in addition to biosimilar competition for Humira, including pushback on drug price increases, higher research and development investments, and tough year-over-year comparisons after the impressive success in But Gonzalez maintains that AbbVie's strategy is working.

Is that just spin from a corporate CEO? I don't think so. AbbVie's blood cancer drugs Imbruvica and Venclexta should continue their strong momentum.

abbvie merger rumors

Orilissa should pick up steam in its initial endometriosis indication. The important thing to remember is that none of these drugs were around when Abbott Labs spun off AbbVie in They're all key parts of AbbVie's strategy established several years ago, a strategy that does appear to be working pretty well overall. Building a strong pipeline was a key part of AbbVie's strategy. The company should begin to reap more of the fruit of this strong pipeline in It anticipates another FDA approval in the second half of the year for upadacitinib in treating rheumatoid arthritis.

Edging around fence

At the J. Morgan Healthcare Conference in early JanuaryAbbVie President Mike Severino said that risankizumab and upadacitinib should be best-in-class therapies. AbbVie is also evaluating both drugs in clinical studies for treating other immunology indications.The combined company will have a more diversified portfolio with forecasted top-tier revenue growth.

Expect cash flow to largely go to debt reduction. Meanwhile, ABBV's dividend appears to be safe. Unfortunately, the market always requires the acquirer to pay a premium price.

Botox Maker Allergan Is Sold to AbbVie in $63 Billion Deal

AGN shareholders will get 0. The biosimilar competition for Humira has begun overseas. Similarly, biosimilar competition for Humira in the U. Allergan's annual revenue growth was about 7. As mentioned earlier, Actavis and Allergan merged in Source: F. Companies always make their announced acquisitions sound good. A large part of the success of a merger rests on management's correct assessment of paying a good valuation for fitting assets and its execution capabilities on the integration.

ABBV's portfolio is focused on immunology and oncology, while AGN's 4 key therapeutic areas are medical aesthetics, eye care, central nervous system, and gastroenterology with its key products being Botox and Restasis. Source: Investor PresentationSlide 7. Source: Investor Presentation, Slide 9. Management expects the combined company to have a credit rating of BBB or better. This indicates a cash flow to net debt ratio of 0.

In the merger presentation, AbbVie mentioned that its strong cash flow generation will allow it to "maintain an attractive dividend growth policy. So, the combined company should be able to at least maintain its dividend, but the priority should be on deleveraging the balance sheet. ABBV currently offers a yield of 6. After shareholders and regulatory bodies approve of the deal, whether the merger will be a success or not will largely depend on management's expected correct assessment of paying a good valuation for fitting assets, its capabilities to deliver anticipated synergies and cost reductions, and its capital allocation abilities for debt reduction, investments, and dividend payments.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article.Some mergers can add a nice shot in the arm for an acquirer.

After years of being focused on Humira, AbbVie Inc.

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While this is one of the most aggressive calls in the stock, it also would represent more upside than has been seen in the other major pharma and mega-cap biotechs. The difference between an independent research firm like Argus and a traditional brokerage firm with underwriters is that Argus gets no investment banking fees from the companies.

The firm was quick to point out that its long-term rating is Hold.

abbvie merger rumors

After completion of the merger with Allergan, Argus noted that the portfolio expansion includes a growing oncology franchise that is anchored by Imbruvica and Venclexta. It also noted Skyrizi and Rinvoq as two growth drivers in the immunology space. One other issue to consider is that Allergan shares and its consensus price target are both still lower than when it was named among 20 undervalued ESG stocks.

The cash flow is also said to support developing, acquiring and collaborating on new product candidates for the future. The Argus report said this:. In addition, two recently launched immunology drugs Skyrizi and Rinvoq are gaining traction and market share in their respective indications.

These drugs, which are posting stronger sales than we had expected, complement Humira in autoimmune indications. There are other blockbusters in the Allergan and AbbVie mix to consider here. The Argus report further said:. The company also has a growing oncology franchise, anchored by Imbruvica and Venclexta, both of which have become blockbuster products. In addition to the strong product portfolio, we note that the stock carries a yield of about 5.

Skip to content. Healthcare Business. Jon C. June 2, am.The drug now faces stiff biosimilar competition in Europe. But none of this is news for anyone who has followed the big drugmaker. This might sound crazy, but I don't think Humira is the main thing that investors should be watching with AbbVie. International sales for the drug are going to plunge over the next few years.

Those are givens, though. The more important things for investors to focus on relate to what AbbVie is going to do beyond Humira. With that in mind, here are four things you need to know about AbbVie.

Drag and drop component

AbbVie's management team has been preparing for the day that Humira faced biosimilar competition for years. They knew additional products would be needed to offset the inevitable sales declines that would come for the world's top-selling drug. So they developed and have been executing on a strategy to keep AbbVie among the top-tier performers in the pharmaceutical industry. The company has several challenges in addition to biosimilar competition for Humira, including pushback on drug price increases, higher research and development investments, and tough year-over-year comparisons after the impressive success in But Gonzalez maintains that AbbVie's strategy is working.

Is that just spin from a corporate CEO? I don't think so. AbbVie's blood cancer drugs Imbruvica and Venclexta should continue their strong momentum. Orilissa should pick up steam in its initial endometriosis indication. The important thing to remember is that none of these drugs were around when Abbott Labs spun off AbbVie in They're all key parts of AbbVie's strategy established several years ago, a strategy that does appear to be working pretty well overall.

Building a strong pipeline was a key part of AbbVie's strategy. The company should begin to reap more of the fruit of this strong pipeline in It anticipates another FDA approval in the second half of the year for upadacitinib in treating rheumatoid arthritis.

At the J. Morgan Healthcare Conference in early JanuaryAbbVie President Mike Severino said that risankizumab and upadacitinib should be best-in-class therapies.

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AbbVie is also evaluating both drugs in clinical studies for treating other immunology indications. Some analysts and investors seem to have expected that AbbVie would make a huge deal. However, Rick Gonzalez stated clearly that AbbVie has no appetite for a huge deal.

I think that's good news for the company's shareholders for a couple of reasons. First, major mergers have a spotty track record at best in delivering solid returns. Second, a monster deal would be a distraction for AbbVie in executing its strategy that should work well over the long run. Having said that, it would be great if AbbVie could pick up some promising pipeline assets without paying too much for them. Gonzalez acknowledged in his comments during AbbVie's Q4 conference call that if the company could find another drug like Imbruvica or risankizumab it would "aggressively pursue" such opportunities.

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Changing horses in mid-stream can end in disaster. Considering the challenges that AbbVie faces, the prospects of a new CEO taking over is the last thing that investors should want. The good news is that this shouldn't be a worry. Gonzalez was asked in the Q4 call about succession planning. He responded that he has heard rumors about him potentially retiring and unequivocally stated the rumors aren't true. Gonzalez joked that he had retired once already but found that he's "a heck of a lot better at running AbbVie than he was at retirement.

I don't really expect investors to not worry about Humira.Scroll down to read deal descriptions. Join Now. If you know someone who might enjoy this briefing forward this email. Subscribe to a Daily Review.

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abbvie merger rumors

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HighPeak Energy. Jio Platform. Pope Resources.The deal represents a classic response to a perennial drug industry challenge: how to recover when a blockbuster drug is losing its patent protection.

Beyond the pharmaceutical industry, consolidation has been transforming the health care landscapeparticularly as large insurers join with pharmacy benefit managers, like the recent mergers of Cigna and Express Scripts, and CVS and Aetna. A federal judge is still scrutinizing the terms of the latter deal. Under the terms of the Allergan dealAbbVie will pay 0. Gonzalez will remain as chief executive. AbbVie has built Humira into a huge seller by expanding its approved uses and raising its pricebut competing biosimilar versions are already available in Europe and they are scheduled to go on sale in the United States in Global sales of Humira fell in the first quarter of this year by 23 percent, even as sales in the United States have continued to climb.

Other top products from the company include the cancer treatments Imbruvica and Venclexta, as well as drugs that treat hepatitis C. In a conference call Tuesday morning, Mr.

Statement from AbbVie Inc. Regarding a Possible Offer for Shire plc

Allergan sells a range of products, but it has also struggled to diversify beyond its line of aesthetic medications and Botox, which has brought in billions of dollars with its expanded use beyond smoothing frown lines to treat migraine headaches and other health conditions. Init made an unusual deal to sell its patents for its eye drug, Restasis, to the St.

Regis Mohawk tribe in upstate New York in an effort to protect Allergan from a patent challenge. But that effort was challenged and it eventually failed after the Supreme Court declined to take up the case. Since then, Allergan, an Irish company whose business is primarily in the United States, has been exploring either a sale or a split. The Federal Trade Commission, which oversees mergers and acquisitions, appears to be taking a closer look at these deals.

Shares in AbbVie, based near Chicago, were down 16 percent at the close of trading on Tuesday, while Allergan shares were up about 25 percent. Home Page World U.Statement from AbbVie Inc.

abbvie merger rumors

The proposed combination is strategically compelling to AbbVie and Shire and would create a larger and more diversified biopharmaceutical company with multiple leading franchises and significant financial capacity for future acquisitions, investment and enhanced shareholder distributions and value creation.

AbbVie is offering Shire shareholders compelling immediate value with significant future upside potential from ownership in New AbbVie that AbbVie expects will create long-term value for all shareholders. Our strategy positions us to deliver strong performance with a robust late-stage pipeline of multiple potential blockbuster medicines, including in oncology, our HCV regimen and daclizumab for multiple sclerosis.

We believe this highly executable proposed transaction will build long-term value for the patients, employees and shareholders served by both companies, and will grow our combined product portfolios and pipelines and deliver superior returns to shareholders.

AbbVie is willing to move quickly and cooperatively to engage with Shire with a view to achieving a transaction for the benefit of all shareholders.

My Opinion Of AbbVie Stock With Then Buying Allergan Dividend Investing

The making of any firm offer by AbbVie is subject to pre-conditions which may be waived in whole or in part by AbbVie :. The completion of the Proposal would be subject to the approval of AbbVie shareholders and regulatory approvals, amongst others.

In accordance with Rule A further announcement will be made as appropriate. Dial-in information: U. AbbVie is a global, research-based biopharmaceutical company formed in January following separation from Abbott Laboratories.

Statement from AbbVie Inc. Regarding a Possible Offer for Shire plc

The company's mission is to use its expertise, dedicated people and approach to innovation to develop and market advanced therapies that address some of the world's most complex and serious diseases. AbbVie employs approximately 25, people worldwide and markets medicines in more than countries. Additional information is available on the company's website at www. The directors of AbbVie accept responsibility for the information contained in this document and, to the best of their knowledge and belief having taken all reasonable care to ensure that such is the casethe information contained in this document is in accordance with the facts and it does not omit anything likely to affect the import of such information.

Morgan Limited which conducts its U. Morgan Cazenove and which is authorised and regulated by the Financial Conduct Authority in the United Kingdomis acting exclusively for AbbVie in connection with the possible offer and for no one else, and is not, and will not be, responsible to anyone other than AbbVie for providing the protections afforded to clients of J.

Morgan or its affiliates, or for providing advice in relation to the possible offer or any other matters referred to in this announcement. Under Rule 8.

An Opening Position Disclosure by a person to whom Rule 8. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

A Dealing Disclosure by a person to whom Rule 8.


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