AbbVie will acquire Stemcentrx and its lead late-stage asset rovalpituzumab tesirine (Rova-T) currently in registrational trials for small cell lung cancer (SCLC).
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Rova-T is a novel biomarker-specific therapy that is derived from cancer stem cells and targets delta-like protein 3 (DLL3) that is expressed in more than 80 percent of SCLC patient tumors and is not present in healthy tissue.
Registrational trials for third-line small cell lung cancer are expected to complete enrollment by the end of 2016.
"AbbVie is committed to continued innovation in oncology, a critical component of our long-term growth and an area of significant need to millions of patients worldwide," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie.
"The addition of Stemcentrx and its late-stage compound Rova-T provide AbbVie with a unique platform in solid tumor therapeutics and complement our leadership position in hematologic oncology.
"We believe the acquisition of Stemcentrx will strengthen and accelerate our ability to deliver innovative therapies that will have a remarkable impact on patients' lives."
AbbVie will acquire Stemcentrx for approximately $5.8 billion in cash and stock. AbbVie will pay approximately $2 billion of the transaction value in cash and fund the remaining portion with stock.
In addition, Stemcentrx investors are eligible to receive up to $4 billion in cash for additional, success-based milestone payments for the achievement of certain regulatory and clinical developments.
The transaction is subject to customary closing conditions and expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in second-quarter 2016.
Upon completion of the transaction, AbbVie intends to execute an accelerated share repurchase program of up to $4 billion of the company's common stock.
AbbVie expects this transaction to be approximately $0.20 dilutive to our ongoing earnings per share in 2016, with accretion beginning in 2020.
As a result, AbbVie is updating its 2016 adjusted diluted earnings per share guidance range to $4.62 to $4.82.
AbbVie announced financial results for the first quarter ended March 31, 2016. Worldwide net revenues were $5.96 billion in the first quarter, up 18.2 percent.
On an operational basis, net revenues increased 22.4 percent, excluding a 4.2 percent unfavorable impact from foreign exchange rate fluctuations. ■