Here’s a quick thought about the Abbvie – Shire transaction that’s received so much recent attention because of the decision to reincorporate in Ireland once the deal is completed. Tax inversions are in vogue and a hot topic in the media. While the tax benefits of an inversion certainly are important in this acquisition, that’s only half the story. The other side is more strategic.
AbbVie’s top product is Humira, an arthritis drug that will lose its patent in two years. That makes Shire’s portfolio of products very attractive, including its rare disease drugs. The acquisition decreases AbbVie’s reliance on Humira and bolsters its pipeline for future growth.