AbbVie CFO sees no need for big acquisition
AbbVie is on its own in the world and essentially living off one product, anti-inflammatory Humira. But that is just fine with AbbVie ($ABBV) CFO Bill Chase, who Tuesday at the J.P. Morgan Healthcare Conference swept aside suggestions that the new company needed some big acquisition to move forward.
"We are not really in a situation where we need to go and do a big deal," Chase told Reuters at the conference. "It doesn't seem to us to be a prudent way to use our cash."
Humira is a huge product, generating about $9 billion in sales. But Humira's patent expires in 2016, and it faces a slate of formidable competitors, including Pfizer's ($PFE) newly minted Xeljanz for rheumatoid arthritis. The company lost patent protection for cholesterol drug TriCor last year while Trilipix and Niaspan fall off patent this year. That puts another $835 million in sales at risk. AbbVie, which was spun off Jan. 1 from Abbott ($ABT), needs some solid new products to take up the slack, and some have speculated that it would get those through acquisitions.
Analysts have offered up some merger candidates they think might make sense, including Bristol-Myers Squibb ($BMY) and Roche ($RHHBY). BMS is an AbbVie research partner but needs some pipeline help of its own these days, and Roche seems more interested in gene sequencing than megamergers. And Chase is having none of it.
He says he is confident about the 20 drugs AbbVie has in the pipeline and the company needs its cash to operate. He also wants to have some cash to pay a dividend to investors. "Cash right now is an important source of liquidity for us," Chase told Reuters.
- here's the Reuters story
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