AbbVie Agrees to Buy Stemcentrx, Reports Jump in Earnings
April 28 2016 - 8:50AM
Dow Jones News
AbbVie Inc. agreed to acquire Stemcentrx in a roughly $5.8
billion cash-and-stock deal that expands its pipeline of cancer
treatments.
With the acquisition, which includes additional potential
milestone payments of as much as $4 billion, AbbVie gains
Semcentrx's Rova-T lung cancer treatment, a biomarker-specific
therapy that is derived from cancer stem cells. Rova-T is being
studied as a third-line treatment in patients with
biomarker-specific therapy that is derived from cancer stem
cells
AbbVie shares fell 2.2% to $59.34 in recent premarket trading,
as the company also reported that its first-quarter earnings rose
32% in the latest quarter.
AbbVie said the deal includes $2 billion in cash, with the
remainder of the transaction in stock. AbbVie said it plans an
accelerated buyback of as much as $4 billion of its shares when the
deal closes, which is expected in the current quarter.
It expects the deal to shave 20 cents a share from its 2016
per-share earnings and begin to boost its per-share results
starting in 2020. AbbVie updated its 2016 per-share earnings
estimate to $4.62 to $4.82, from its previous estimate for $4.90 to
$5.10, to reflect the deal's impact.
AbbVie is facing a looming threat of competition for the
arthritis treatment Humira. The company's hepatitis C drug, Viekira
Pak, faces added competition in a market since Merck & Co.'s
new hepatitis C treatment won U.S. Food and Drug Administration
approval this year.
U.S. sales of Viekira Pak have been soft since being introduced
in 2014 despite a booming market for new hepatitis C
medications.
Over all, AbbVie reported a quarterly profit of $1.35 billion,
or 83 cents a share, up from $1.02 billion, or 63 cents a share, a
year earlier. Excluding one-time items, per-share earnings rose to
$1.15 from 94 cents. The company expected adjusted per-share
earnings of $1.13 to $1.15.
Revenue increased 18% to $5.96 billion. On an operational basis,
which excludes currency impacts, revenue improved 22%. Analysts
polled by Thomson Reuters expected $5.97 billion.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
April 28, 2016 08:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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