AbbVie (ABBV) Announces Completion of Pharmacyclics Acquisition

AbbVie (NYSE: ABBV) has completed the acquisition of Pharmacyclics, Inc. (Nasdaq: PCYC) enhancing AbbVie's scientific and commercial presence in oncology. Pharmacyclics is a leader in the hematological oncology market with Imbruvica® (ibrutinib), a first-in-class BTK-inhibitor used to treat hematological cancers, a $24 billion global market.

"The companies' shared expertise, combined with AbbVie's broad late-stage oncology pipeline, has the potential to transform the cancer treatment landscape for hematological malignancies and improve patient outcomes and quality of life," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "Today marks a significant step forward in our effort to become a leader in oncology and meaningfully augment our long-term growth strategy. The Pharmacyclics team has built an important and rapidly growing franchise with significant long-term potential across a range of hematological cancers."

Imbruvica is approved for use in four indications in the U.S. and is the only product to have received three Breakthrough Therapy designations by the U.S. Food and Drug Administration. As part of a worldwide partnership with Janssen Biotech, Inc., Imbruvica is now approved in nearly 50 countries. Imbruvica is in mid- and late-stage development for additional hematological oncology indications, with more than 60 clinical trials underway, including 13 in Phase 3 development. Imbruvica is also in early-stage development for solid tumors. AbbVie will market Imbruvica in the United States.

Across its oncology pipeline, AbbVie has five late-stage assets in clinical development positioned to launch within the next several years. Two programs, venetoclax, a Bcl-2 inhibitor, and duvelisib, a dual PI3 kinase inhibitor, are in development for hematological cancers. AbbVie intends to explore these assets in combination with Imbruvica to evaluate the potential for meaningful improvement beyond the current standard of care.

Pharmacyclics will be a wholly-owned subsidiary of AbbVie and will operate from its previous Sunnyvale, Calif. headquarters. Wulff-Erik von Borcke, a longtime industry leader and former head of AbbVie's global marketing, will lead Pharmacyclics as president.

Combined with its existing facilities in Redwood City, Calif., AbbVie now employs more than 900 employees in California.

Exchange Offer Information

The exchange offer to acquire all of the outstanding shares of Pharmacyclics common stock expired at 5:00 p.m., New York City time, on May 22, 2015. The depositary for the exchange offer has informed AbbVie that a total of 67,408,824 shares of Pharmacyclics common stock, representing approximately 87 percent of Pharmacyclics' outstanding common stock, were validly tendered and not withdrawn in the exchange offer. All shares that were validly tendered and not withdrawn have been accepted for payment in accordance with the terms of the exchange offer and applicable law.

Of the shares tendered into the exchange offer, 24,058,187 shares made an election to receive the mixed consideration, 14,035,250 shares made an election to receive the all-cash consideration, 29,315,387 shares made an election to receive the all-stock consideration, and no shares were tendered without a valid election.

• Pharmacyclics stockholders who elected to receive the mixed consideration will receive the mixed consideration, which consists of $152.25 in cash and 1.6639 shares of AbbVie common stock per share of Pharmacyclics common stock;
• Pharmacyclics stockholders who elected to receive the all-cash consideration will receive $261.25 in cash per share of Pharmacyclics common stock; and
• Pharmacyclics stockholders who elected to receive the all-stock consideration will be subject to proration at a rate of approximately 61.66%, and will receive their consideration in the form of $261.25 in cash for shares not accepted for the all-stock election due to proration and 3.9879 shares of AbbVie common stock per share of Pharmacyclics common stock for shares that were accepted for the all-stock election.

Pharmacyclics stockholders will receive cash in lieu of fractional shares of AbbVie common stock. As a result of the acquisition, shares of Pharmacyclics common stock will cease to be traded on NASDAQ.

Following its acceptance of the shares tendered in the exchange offer, on May 26, 2015, AbbVie caused the merger of its subsidiary with and into Pharmacyclics without a vote of Pharmacyclics' other stockholders, pursuant to Section 251(h) of the Delaware General Corporation Law, followed by a merger of Pharmacyclics with and into another AbbVie subsidiary. As a result of the completed merger, Pharmacyclics became a wholly owned subsidiary of AbbVie. In connection with the merger, all shares of Pharmacyclics common stock not validly tendered into the exchange offer have been cancelled and converted into the right to receive merger consideration in the same amounts offered in the exchange offer. Holders of these shares will have the opportunity to elect among the mixed consideration, the all-cash consideration and the all-stock consideration, subject to proration, as described in the prospectus, dated April 17, 2015, filed by AbbVie in connection with the transaction.

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