People on the Move
Role changes for AbbVie and Shire CEOs after merger
The deal will see US drug developer AbbVie acquire UK-listed, Ireland-based Shire for £24.44 in cash and 0.8960 AbbVie shares for every Shire share. This represents £52.48 per Shire share based on AbbVie’s closing price of $53.52 on Thursday.
Richard Gonzalez, who will continue as AbbVie’s CEO and Chairman of the Board, commented: "By combining AbbVie and Shire, we’re creating a unique, diversified biopharmaceutical company. The combined company would benefit from a best-in-class product development platform, a stronger pipeline and more enhanced R&D capabilities.”
Shire’s CEO Flemming Ornskov has agreed to lead the integration process and will oversee the creation of AbbVie’s Rare Disease business unit.
He took on the company’s leadership in January 2013, having previously held positions at Evotec, PCI Biotech Holding, Bayer Bausch & Lomb, and other pharmaceutical firms.
In his short tenure so far, Ornskov has “impressively streamlined operations, yielding significantly greater profitability, while simultaneously bolstering the company’s pipeline with attractive late-stage assets,” according to Jefferies analyst Peter Welford. These include ophthalmic candidates lifitegrast (for dry eye) and Premiplex (retinopathy of prematurity), as well as several orphan drug candidates.
Welford added that Ornskov’s elevation of Shire to one of the top specialty pharma companies, combined with the likely importance to AbbVie of its new Rare Disease business suggests Ornskov’s new leadership role “could lay the groundwork as part of AbbVie’s management succession plans.”
Tax inversion
AbbVie said it expects the deal to reduce its tax rate to 13% by 2016 and provide the company with “access to its global cash flows.” Shire is listed on the London stock exchange and domiciled in Ireland.
The company believes a financial re-rating is possible due to the combination of its acquired drug candidates from Shire and the continued success of its own products, including the top-selling Humira franchise.
The deal will leave 25 percent of AbbVie’s share capital in Shire shareholders’ hands. AbbVie has said it intends a share repurchase programme.
