Biotech Values

[jbog]

AbbVie Inc. said late Wednesday it will buy cancer biotech Pharmacyclics Inc. in a $21 billion deal that returns the Chicago drug company to deal-making after backing away from a big tax-lowering takeover last year.

The deal, a mix of cash and stock for $261.25 a share, would give AbbVie a presence in the multibillion-dollar blood-cancer market, and lessen its reliance on an aging rheumatoid-arthritis drug that accounts for most of its sales.

AbbVie had reached a $54 billion to buy Irish drug company Shire PLC last year, before abruptly walking away after the Obama administration took steps to deter such tax-lowering deals.

AbbVie said it expects the deal to close in the middle of this year.

Pharmacyclics, of Sunnyvale, Calif., sells a drug called Imbruvica with partner Johnson & Johnson . Imbruvica has been approved for two blood cancers—a rare lymphoma and a form of leukemia.

In its first full year on sale, the pill had $548 million in world-wide net product revenue last year, Pharmacyclics reported. The company projects sales will reach $1 billion this year.

Doesn't make a lot sense.