It’s a good day to be in the Botox business.
Shares of Botox maker Allergan plc jumped as high as 27% in early trading today on news that the Dublin-based firm is getting scooped up by Chicago pharmaceutical giant AbbVie Inc. for $63 billion.
AbbVie is best known for Humira, its top-selling rheumatoid arthritis drug, but is looking to spread its tentacles into beauty and other treatment areas, as patent protection for Humira is due to expire, according to the Wall Street Journal, which first reported the acquisition. The companies project combined 2019 revenue of about $48 billion, with operations in more than 175 countries and increased resources for R&D.
In an announcement, the companies cited the following four reasons as their strategic rationale for the deal:
- New growth platforms and leadership positions to diversify and expand revenue base
- Immediate scale and enhanced profitability for AbbVie’s growth platform
- Financially attractive with immediate EPS accretion
- Significant cash flow generation
Allergan’s stock was trading at $165 a share shortly after the opening bell this morning, compared to a 52-week low of $114.27 only a week ago. However, AbbVie stock is not faring so well. As of this morning, shares were down almost 15% to $66.84.
You can read all about the acquisition here.