Over the past couple of years, AbbVie (ABBV) executives have struggled to convince investors they had a long-term strategy for growth. Now, something resembling a plan has emerged: The drug maker agreed to pay $63 billion in cash and stock for Allergan (AGN), which has had even more difficulty appeasing critics over some of its own ill-fated moves that pummeled its stock and sapped confidence in management.
For AbbVie, the deal is designed to relieve pressure that is slowly mounting as 2023 nears — the year when generic competition will appear in the U.S. for its franchise product, the Humira rheumatoid arthritis treatment. Last year, Humira generated $13.7 billion in U.S. sales, 42% of revenue. The concern over timing cannot be underestimated, given its pipeline of forthcoming drugs has underwhelmed Wall Street.
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May I observe that our scribe has been known to be fond of turkey – at least “Wild Turkey” – but the lead observation here is, after all, simply “a quote.” Let’s see how this combination flies.