US drugmaker Abbvie is set to buy the maker of Botox in a $63bn bid to reduce its reliance on a key drug.
The cash-and-share deal for Allergan was announced today following reports in the Wall Street Journal.
It comes as pressure has built on Abbvie boss Richard Gonzalez over the company’s exposure to arthritis treatment Humira.
Doubtlessly the star of the show, Humira is the world’s best-selling drug.
But as cheaper knock-off versions start to emerge in Europe, the company has been looking to diversify.
“Allergan provides Abbvie a diverse set of assets to help diversify away from Humira, at a very reasonable price,” said Maxim Jacobs director of research for North America at Edison Investment Research.
“Assuming the deal goes through, it makes a lot of sense for both parties.”
Three years ago the company acquired what looked like a promising cancer treatment.
However, earlier this year the firm took a $4bn impairment on the assets it bought from Stemcentrx.
The latest move will instead give it access to a proven product. And with Allergan shares halving in value since 2016, it can afford to pay a good premium, Jacobs said.
That year Allergan’s chief executive Brent Saunders could not convince Pfizer to take over the business for $160bn.
“This is a transformational transaction for both companies and achieves unique and complementary strategic objectives,” said Abbvie boss Gonzalez.