Sources: Pharmacyclics Considering Sale As Cancer Drug Lights Up Forecasts.
As prospects build for Pharmacyclics’ flagship cancer drug Imbruvica, Bloomberg News reports sources as saying that the company is considering a sale and is attracting interest from Johnson & Johnson, Novartis, and other drugmakers. According to Bloomberg, the sources said that Pharmacyclics could carry a price tag of $17-18 billion in a sale, but added “that deliberations are at an early stage and may not lead to a deal.” On Wednesday, shares of the Sunnyvale, California-based company rose 17 percent to close at $220.22 in New York. A deal at around $18 billion, observes Bloomberg, would value Pharmacyclics at around 200 times its 2014 net income of $86 million. But analysts predict that sales of Imbruvica will rise to $3.56 billion in 2018 versus $492 million last year. Observed Morningstar analyst Stefan Quenneville, “I don’t think this is a crazy valuation based on the peak sales of this thing. I would call it a primarily one-asset company. It’s not surprising to see a buyout. It’s very clean and straightforward for a bigger company that can say, ‘We can do a better job with our sales force.’” Bloomberg goes on to carry a quote from Robert W. Baird analyst Brian Skorney similarly trumpeting the sales potential of Imbruvica.
Exploring the Bloomberg piece, Fierce Pharma reports that a Pharmacyclics purchase would be a “natural” fit for J&J, whose Janssen subsidiary already sells Imbruvica “outside the U.S. and shares marketing duties with Pharmacyclics at home, and the pair is working together to try to expand Imbruvica’s patient pool.” An acquisition also “makes sense” for Novartis, which “has been active in the M&A arena” and has cancer “high on its priority list.”
Breakthrough Cancer Drug Imbruvica A Gold Nugget For Pharmacyclics. Bloomberg News reports that Imbruvica, an “overlooked drug” that Pharmacyclics paid only $6.6 million to obtain in 2006, “could become one of the biggest selling cancer treatments ever” and has the company “considering selling itself in a deal that could be worth as much as $18 billion.” Imbruvica is “projected to join the ranks of other top-selling oncology drugs,” continues Bloomberg, and according to Brian Druker of Oregon Health & Science University “‘certainly has the potential of Gleevec-like revenue.’” Bloomberg goes on to explore why Imbruvica has such promising potential, noting that in one study the drug “significantly delayed progression of the disease and lowered the death rate by more than half in patients who had failed other therapies or relapsed.”