AbbVie said it will buy Allergan for $63 billion, a move designed to diversify AbbVie's drug lineup before Humira, its blockbuster immune disorder treatment, loses patent protection. AbbVie said Tuesday it will pay $120.30 in cash and a portion of its stock for each Allergan share. That amounts to $188.24 per share, or a 45% premium to Allergan's closing price Monday.
Humira contributed almost 60% of AbbVie's $32.8 billion in sales last year, but the company will face competition in 2023 when lower-priced versions go on sale in the U.S. In a statement, AbbVie CEO Richard A. Gonzalez said the acquisition would allow the company to diversify its drug lineup while continuing to develop new treatments.
The acquisition is expected to close in early 2020, the statement added. On a combined basis, the businesses expect to have $48 billion in 2019 revenue. AbbVie CEO Gonzalez will continue as CEO through Humira's loss of patent exclusivity in 2023, it added. Two Allergan board members will join AbbVie's board, including Allergan CEO Brent Saunders.
In Tuesday morning premarket trading, AbbVie's shares were down 8.5% to $71.77, while Allergan's stock price soared 31.4%, to $170.02.
--With reporting by The Associated Press