AbbVie Plans $5 Billion Sale of Women's Health Portfolio, Files Offering Prospectus

Compiled by Fan Dongdong

A year after AbbVie’s $63 billion acquisition of Allergan, reports indicate that AbbVie plans to divest its portfolio of women’s health pharmaceuticals and consumer healthcare products, in a deal potentially valued at up to $5 billion.

According to a recent report by Reuters France, AbbVie is currently planning to sell part of the women’s health drug assets acquired through its purchase of Allergan, which may include the contraceptive Lo Loestrin Fe. Sources indicated that these drugs under consideration for sale generated approximately $500 million in profits over a 12-month operating period. In light of this, AbbVie is currently negotiating to sell the portfolio at a price of $5 billion, representing ten times that profit figure.

Sources revealed that the portfolio of women’s pharmaceuticals and healthcare products is expected to be sold through an auction. Reuters stated that the sale plan has attracted interest from multiple private equity firms, including CVC Capital Partners. Theramex, one of CVC’s portfolio companies, was established in 2018 after CVC acquired women’s health assets from Teva. The company primarily markets several contraceptive products, including the birth control pills Zoely and Seasonique. According to Reuters sources, CVC may seek to supplement Theramex’s existing product portfolio by acquiring AbbVie’s contraceptive products.

During the COVID-19 pandemic, women’s health was one of the therapeutic areas most severely impacted for biopharmaceutical companies. In 2020, AbbVie’s women’s healthcare business reported operating income of only $673 million, a year-on-year decline of 13.3%. By contrast, in 2019, Allergan’s women’s health franchise saw its revenue grow by 13.8% year on year, reaching $896 million. Notably, women’s therapies and healthcare products have frequently been targets for divestment within the pharmaceutical industry. In addition to Teva and Allergan mentioned above, Merck & Co. recently merged its women’s health and biosimilars businesses into a new company, which is being spun off as Organon.

Prior to acquiring Allergan, AbbVie already had its own women’s health medication, elagolix (marketed under the brand name Orilissa), for the treatment of endometriosis. In 2020, the drug received another U.S. FDA approval under a different brand name, Oriahnn, for the management of heavy menstrual bleeding associated with uterine fibroids. Sales of the drug reached $125 million in 2020, representing a year-over-year increase of 34.6%. According to Reuters, this product was not included in the portfolio of drugs being divested. Additionally, AbbVie has another hormonal therapy drug, Lupron, which is approved for the treatment of endometriosis and uterine fibroids in women, as well as prostate cancer in men. However, AbbVie did not list this drug under its women’s health portfolio in its financial reports.

In May 2020, US-based AbbVie announced the completion of its $63 billion cross-border acquisition of Ireland’s Allergan. This massive transaction ultimately secured all requisite regulatory approvals from relevant government authorities as stipulated in the acquisition agreement, along with approval from the High Court of Ireland. Reportedly, AbbVie aims to divest its women’s health assets to repay the billions of dollars in debt incurred from the Allergan acquisition. Furthermore, the sale of non-core pharmaceutical assets will free up necessary capital for AbbVie to focus on new drug development and identify new profit growth drivers. This strategic shift is particularly critical given that Humira, AbbVie’s blockbuster drug generating $20 billion in annual revenue and currently the world’s best-selling medication, faces patent expiration in 2023, with the entry of generic competitors expected to erode its market share.

Reference Sources:

1.AbbVie revives Allergan's abandoned women's health sale, eyeing $5B deal

2.AbbVie Could Sell Off $5 Billion Portfolio of Women’s Drugs