Pharmaceutical giant AbbVie (NYSE:ABBV) said today it will acquire Allergan (NYSE:AGN) for $63 billion in cash and stock. The purchase is seen as a hedge against the impending expiration of U.S. patents on AbbVie’s blockbuster drug, Humira.
AbbVie will pay Allergan shareholders $188.24 per share of Allergan stock, a 45% premium to yesterday’s closing price. Humira sales account for more than 60% of AbbVie’s revenue, but biosimilars approved in Europe have begun to erode that cash flow. U.S. patents for the drug are due to expire in 2023.