AbbVie Acquires Shire To Reincorporate In U.K.
By Cyndi Root
AbbVie and Shire announced in a cooperation agreement that AbbVie has agreed to acquire Shire in a $54 billion takeover deal. The acquisition of the U.K. pharmaceutical company will allow AbbVie to reincorporate in the U.K. and lower its tax bill from 23 percent in the U.S. to 13 percent in the U.K., according to The New York Times. The deal follows a recent trend of U.S. firms reincorporating in the U.K. to lower taxes, although top executives including AbbVie’s CEO Richard A. Gonzalez, have denied that the primary reason is financial. Rather, he says the Shire acquisition was a strategic fit.
The companies both produce blockbuster drugs, have a complementary portfolio of approved drugs, and a robust pipeline. Susan Kilsby, Chairman of Shire, said, “We believe that the combined group represents an exciting fit of two complementary businesses that will create a new market leader in specialty pharmaceuticals with a portfolio of fast growing products, a promising pipeline, and enhanced growth prospects."
AbbVie and Shire Agreement
In the Executive Version of the Agreement Plan and Merger, the 14-page document outlines the details of the AbbVie and Shire agreement. AbbVie will reincorporate at Shire’s location in Jersey, an island off the coast of Britain in the English Channel. The executive team at AbbVie will remain at the helm of the new company. The Guardian reports that AbbVie will incentivize Shire leadership with payments to stay on and lead the integration. Shire’s CEO Flemming Ornskov will create new rare-disease and neuroscience business units.
AbbVie Porfolio
AbbVie owns Humira, an arthritis treatment. However, in 2016, that drug will lose patent protection, threatening the bulk of AbbVie’s revenue. AndroGel, a topical testosterone replacement therapy (TRT) drug, is another bestseller. Other AbbVie categories include rheumatoid arthritis, Hepatitis C, and HIV.
Recently, the company announced the start of a Phase III trial of veliparib (ABT-888) in combination with carboplatin and paclitaxel for the treatment of patients with advanced breast cancer. AbbVie is using its expertise in biologics and small molecules in its R&D efforts for immunology, neuroscience, and kidney disease among others.
Shire Portfolio
Shire focuses on treatments for gastrointestinal conditions, rare diseases, behavioral conditions, and regenerative health. Shire owns Adderall, Intuniv, and Vyvanse for attention deficit disorder (ADHD). It produces medications for rare diseases such as Elaprase for Hunter syndrome and Replagal for Fabry disease. Lialda and Pentasa are indicated for ulcerative colitis.
Shire recently announced positive results from two Phase IV studies comparing Vyvanse with Concerta and a placebo in adolescents with ADHD. Shire’s R&D department is working on genetic diseases, enzyme replacement therapy, and a human cell line technology platform.