AbbVie has set to acquire Pharmacyclics and its flagship asset Imbruvica (ibrutinib), a highly effective treatment for hematologic malignancies for a consideration of $21 billion. The acquisition accelerates AbbVie's clinical and commercial presence in oncology, strengthening its already robust pipeline, and establishing its strong leadership position in hematological oncology. The acquisition adds to AbbVie's already comprehensive pipeline and strong growth prospects.

Under the terms of the transaction, AbbVie will pay $261.25 per share comprised of a mix of cash and AbbVie equity. The transaction values Pharmacyclics at approximately $21 billion and was approved by the Boards of Directors of both companies. AbbVie expects to fund the transaction through a combination of existing cash, new debt and stock

AbbVie will acquire all of the outstanding shares of common stock of Pharmacyclics through a tender offer, followed by a second-step merger. In the tender offer, AbbVie will offer to acquire all of the outstanding shares of Pharmacyclics' common stock for $261.25 per share, consisting of cash and AbbVie common stock. Pharmacyclics' stockholders will be permitted to elect cash, AbbVie common stock or a combination, subject to proration. The aggregate consideration will consist of approximately 58 per cent cash and 42 per cent AbbVie common stock. The closing of the tender offer is subject to customary closing conditions, including regulatory approvals, and the tender of a majority of outstanding shares of Pharmacyclics' common stock, and is expected to close in mid-2015.

Imbruvica is a Bruton's tyrosine kinase (BTK) inhibitor approved for use in four indications to treat three different types of blood cancers including chronic lymphocytic leukemia, mantle cell lymphoma and Waldenstrom's macroglobulinemia. Imbruvica received initial US Food and Drug Administration (FDA) approval in 2013 and is the only therapy to have received three Breakthrough Therapy designations by the FDA. It is currently approved in more than 40 countries. Significant opportunity exists with further Imbruvica indications, including solid tumors, the potential to leverage AbbVie's immunology expertise for the development of Pharmacyclics' immunology program, and advance AbbVie's efforts in hematologic malignancies.

Richard A. Gonzalez, chairman and CEO, AbbVie said,."The acquisition of Pharmacyclics is a strategically compelling opportunity. The addition of Pharmacyclics' talented and innovative team will add enormous value to AbbVie. Its flagship product, Imbruvica, is not only complementary to AbbVie's oncology pipeline, it has demonstrated strong clinical efficacy across a broad range of hematologic malignancies and raised the standard of care for patients."

"Team Pharmacyclics is honored and enthusiastic to join the AbbVie organization. We share a common purpose.  Together and as one, our focus remains to create a remarkable difference for patient betterment around the world," said Bob Duggan, chairman and CEO, Pharmacyclics.

AbbVie will acquire all remaining shares of Pharmacyclics' common stock that are not tendered in the tender offer through a second-step merger, which will be completed immediately following the tender offer and without a vote of Pharmacyclics' stockholders.

Morgan Stanley & Co. LLC acted as financial advisor, and Wachtell, Lipton, Rosen & Katz acted as legal counsel, to AbbVie.  Centerview Partners LLC and J.P. Morgan Securities LLC acted as financial advisors, and Wilson Sonsini Goodrich & Rosati, P.C. acted as legal counsel, to Pharmacyclics.

AbbVie is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories.

Pharmacyclics, Inc. is a biopharmaceutical company focused on developing and commercializing innovative small-molecule drugs for the treatment of cancer and immune mediated diseases.