Could AbbVie be getting ready to return to large M&A? With Humira now facing U.S. biosimilar competition, the company is putting the option back on the table.
After inking its huge Allergan buyout in 2019, when the company put down $63 billion to create the fourth-largest drugmaker globally at the time, AbbVie had to cool down on M&A to pay down debts. AbbVie has been capping its dealmaking at $2 billion per year since then, but not anymore, CEO Richard Gonzalez told The Wall Street Journal in a recent interview.
“We have the capacity to do more,” Gonzalez told the newspaper.
AbbVie snapped up Allergan in part reduce its reliance on Humira and prepare for the then-far off biosimilar wave. At the time, Gonzalez said that “essentially, Humira is buying the assets that replace it over the long term.”
While Allergan’s Botox certainty boosts AbbVie sales, the company's real stars have turned out to be home-grown. Immunology gems Skyrizi and Rinvoq are expected to eventually surpass Humira’s peak sales of around $20 billion by 2027, Gonzalez has said.
Of course, M&A is not the company’s only strategy to grow sales. The drugmaker is working to keep Humira on formularies with bigger discounts in a bid to keep patients on the branded therapy. If the company can “concede price” and maintain formulary access, “ultimately, many physicians will choose to leave the patient on the same therapy,” Gonzalez said.
Even as AbbVie now eyes M&A, Gonzalez touted the growth potential of the company's portfolio at the recent J.P. Morgan Healthcare Conference. The company's own offerings will “more than offset” Humira losses, he said. The CEO emphasized that even though his company doesn’t have to “go out and do business development” to support growth, it will be scouting the landscape for opportunities.
The company will look for assets that can contribute to “high, single-digit top tier growth” in 2030 and beyond, Gonzalez said at JPM. The assets would have to fall under areas that AbbVie already primarily plays in, such as immunology, oncology, neuroscience and aesthetics.
But the drugmaker won't be alone on the M&A trail. At JPM, several of the industry's top CEOs said they will be actively looking to add assets. Just last week, Sanofi's CEO Paul Hudson said the company is "not scared to leverage the balance sheet" when a potential M&A deal makes sense for the company. Sanofi was a bidder on Horizon Therapeutics, but Amgen ultimately won that bidding war.