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AbbVie to buy Shire for $54.8 billion to lower taxes

First Published      Last Updated Jul 18 2014 03:08 pm
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Ornskov will lead the combined company's rare-disease unit from Switzerland, reporting to Gonzalez. "Flemming is committed to staying post-close, as he would go through the integration process. I've had a number of discussions with him, he's excited about role he'll play with the new company."

Flemming will also receive $9.9 million as part of a retention arrangement for senior Shire employees, amounting to about 150 percent of his annual total compensation. Two Shire directors, Chairwoman Susan Kilsby and Dominic Blakemore, will join the AbbVie board.

The tax move is only the industry's latest.

Mylan said July 14 it will buy Abbott Laboratories' generic-drug business and incorporate the new company in the Netherlands. Medtronic, a Minneapolis-based medical-device maker, on June 15 announced a $42.9 billion takeover of Dublin- based Covidien.

Pfizer's bid for AstraZeneca — which would have been the largest in industry history — ran into the U.K. Takeover Panel's deadline as the companies couldn't agree on a price.

A congressional panel estimated this year that a bill to prevent future inversions proposed by Rep. Sander Levin, a Michigan Democrat, would preserve $19.5 billion in otherwise forgone tax revenue over the next 10 years.

AbbVie will gain a series of rare disease drugs, including Elaprase for Hunter syndrome, a genetic disorder, and Replagal, to treat Fabry disease. It also inherits experimental products, including lifitegrast for dry eye, and Premiplex for a potentially blinding eye disorder in infants. Premiplex could generate more than $1 billion annually if it reaches the market, said Jason Gerberry, an analyst at Leerink Partners.

Drugs for attention deficit disorder, including Vyvanse and Adderall, accounted for about 39 percent of Shire's revenue last year.

JPMorgan Chase is advising AbbVie on the deal, while Citigroup, Deutsche Bank, Evercore Partners, Goldman Sachs and Morgan Stanley are advising Shire.