AbbVie to acquire cancer drugmaker Stemcentrx for $5.8 billion

NORTH CHICAGO — AbbVie Inc. agreed to acquire cancer drugmaker Stemcentrx for $5.8 billion as it seeks to lower dependence on its top drug Humira.

AbbVie will pay $2 billion in cash and the remaining $3.8 billion in stock for Stemcentrx, according to a statement on Thursday. Stemcentrx investors are eligible to receive an additional $4 billion in cash if certain regulatory and clinical milestones are achieved. AbbVie also reported first-quarter earnings that beat analysts' estimates.

Humira faces more competition as cheaper versions, known as biosimilars, come on the market. The drug accounted for 61 percent of AbbVie revenue in 2015, and its fourth-quarter sales narrowly missed analysts' expectations, causing shares to fall.

For the first quarter, AbbVie's earnings per share excluding one-time items were $1.15, the drugmaker said Thursday in a statement, beating the $1.13 average of analysts' estimates compiled by Bloomberg.

Stemcentrx, a closely held biotech firm based in South San Francisco, California, has five experimental drugs in human trials. The leading candidate is for small cell lung cancer, targeted at a protein called DLL3 that is expressed in 80 percent of small cell lung cancer patients' tumors and not in healthy tissue, according to a statement on Thursday. Patients are enrolling in a final-stage test of the company's lead drug, called Rova-T, which could be on the market by 2018 if approved, Chief Executive Officer Rick Gonzalez said.

“We have dedicated ourselves to oncology and we view it as our second major growth platform,” he said in a telephone interview. “Stemcentrx in particular fits well as a major platform play for us in solid tumors.”

Sales of Humira were $3.58 billion in the first quarter, beating analysts' average estimate of $3.52 billion.

AbbVie's “dependence on Humira may make the company a victim of its own success, like the iPhone for Apple,” wrote Sam Fazeli, an analyst at Bloomberg Intelligence, in a February note to clients. The injection “is at risk of biosimilar copies from 2017, though patents may protect it to 2022.”

AbbVie has doubled down on oncology, gaining Imbruvica, a blood cancer treatment, in its acquisition of Pharmacyclics Inc. last year. On April 21, it entered a deal with cancer drugmaker CytomX Therapeutics Inc. and simultaneously announced a partnership with Belgian drugmaker Argenx to codevelop an oncology drug.

“We have a very strong and growing position” in blood cancers “and an expanding effort in solid tumors,” Michael Severino, executive vice president of research and development, said by phone. The CytomX and Argenx deals involve earlier-stage programs, while the Stemcentrx acquisition adds a “later-stage program which is derisked,” he said.

First-quarter revenue was $5.96 billion, matching the average estimate of analysts. More results from the statement:

• Viekira Pak sales of $414 million, estimate was $514 million. The hepatitis C therapy is competing with Gilead Sciences Inc. and Merck & Co.'s treatments

• Imbruvica sales of $381 million; average estimate was $367 million

• Net income of $1.35 billion, or 83 cents a share, up from $1.02 billion, or 63 cents, a year earlier

The company lowered its full-year forecast for profit excluding one-time items to $4.62 to $4.82 a share in light of the Stemcentrx acquisition. In March, AbbVie had forecast $4.82 to $5.02 a share, and analysts have predicted $4.96.