(ABBV) acquisition of Allergan has entered the final stretch after the FTC
(federal trading commission) gave its consent for the deal to go ahead. With
approval from the Irish High Court the final hurdle left, following Wednesday’s
hearing, the transaction should come to a close.
surrounding the acquisition’s clearance by the FTC, concerned the possible
requirement to divest AbbVie’s main growth driver – Skyrizi.
“This investor concern should finally be allayed, as the
FTC appears satisfied with the divestiture of Allergan’s brazikumab (IL-23)
back to AstraZeneca instead,” said Mizuho analyst Vamil Divan
Allergan will sell Nestle two of its pancreatic enzyme preparations, Zenpep and
all these assets’ divestitures were expected, Divan believes these developments
should come as no surprise to investors who have been monitoring the deal’s
as part of the transaction, an unexpected agreement regarding personnel was
reached. Only one Allergan Director will join the AbbVie board, while
Allergan’s current Chairman and CEO Brent Saunders will “pursue other
opportunities in the sector.”
looks favorably upon the deal and argues the diversification should pay off,
especially when considering the future sales of AbbVie’s drug Humira. The
world’s best-selling drug has struggled on the international market since
generic versions began selling in Europe in 2018. The drug faces further
competition at home when biosimilars will enter the market in 2023.
Calling AbbVie, his “top large-cap pick,” Divan concluded, “We believe the Allergan deal changes the AbbVie story for the better as it brings in additional growth drivers at an attractive price, including products early in their life cycle (e.g. Vraylar, Ubrelvy) and others that should be highly durable (e.g. Botox, Juvederm), as well as >$2Bn in expense synergies.”
keeps a Buy rating on AbbVie along with a $101 price target. The implication
for investors? The upside of 20% from current levels.
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