In the second pharma mega-deal announced this year, AbbVie is planning to buy Allergan, the maker of Botox and other aesthetic products, for $63 billion, the companies said on Tuesday.
The companies expect to close the deal in early 2020, pending regulatory and shareholder approval, according to the announcement.
The acquisition is part of AbbVie’s plan for growth after blockbuster drug Humira loses U.S. exclusivity in four years. Humira makes up 60% of AbbVie’s sales, but after the acquisition that share will drop to 40%, according to the deal’s investor presentation.
The drugmaker is hoping to reduce its reliance on the immunosuppressant drug before generics hit the market in 2023. Generic versions of Humira launched in Europe last fall, taking a bite out of AbbVie’s sales in that region.
AbbVie also predicted that the combined company’s revenue would put it alongside larger pharma companies such as Pfizer, Novartis and Merck. AbbVie reported $32 billion in revenue in 2018 and Allergan earned $15 billion.
To stave off Humira generics, AbbVie has secured more than 100 patents for the drug, called patent thickets, and has made deals with rival companies to keep lower-cost copies off the market for as long as possible.
The AbbVie-Allergan tie-up is the second major pharma deal announced this year. In January, Bristol-Myers Squibb said it would acquire Celgene for $74 billion. However, that deal hit a speedbump this week as BMS said it would divest Celgene’s psoriasis drug Otezla and that the acquisition would close later than predicted.
Takeda’s acquisition of Shire for $62 billion was completed in January.