AbbVie has announced a definitive agreement to acquire Pharmacyclics and its flagship asset Imbruvica (ibrutinib), a treatment for hematologic malignancies. 

The acquisition accelerates AbbVie's clinical and commercial presence in oncology, strengthening its pipeline and establishing its position in hematological oncology—a rapidly growing market now approaching $24 billion globally. The acquisition adds to AbbVie's pipeline and growth prospects.

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. 

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

"The acquisition of Pharmacyclics is a strategically compelling opportunity. The addition of Pharmacyclics' talented and innovative team will add enormous value to AbbVie," said Richard A. Gonzalez, chairman and CEO, AbbVie. "Its flagship product, Imbruvica, not only is 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."

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% cash and 42% 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.

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.

AbbVie expects to fund the transaction through a combination of existing cash, new debt and stock. 

AbbVie is a global, research-based biopharma company formed in 2013 following separation from Abbott Laboratories. Pharmacyclics is a biopharma company focused on developing and commercializing innovative small-molecule drugs for the treatment of cancer and immune mediated diseases.