Oct. 31--North Chicago-based AbbVie, which recently scrapped a $55 billion offer to buy Shire in a deal that would have moved its headquarters overseas, said Friday it has the "wherewithal to be active" on the mergers and acquisitions scene and that it has "an incentive to look outside the United States first."
Another $50 billion deal, however, is "unlikely," the drugmaker said Friday.
"Our highest priority for our cash is to deploy it to further grow the business and make the business more healthy going forward," Chief Executive Richard Gonzalez said Friday during an earnings call with analysts. "What I don't think is that we absolutely have an imperative to run out and do another $50 billion deal."
Growth prospects for AbbVie don't require it to do a deal of that size, he said.
The deal for Shire would have enabled AbbVie to reduce its tax rate, which was 22 percent in the third quarter. The company said it will continue to consider buying individual product lines as well as mid-sized and larger companies.
On Oct. 20, AbbVie's board authorized a new $5 billion stock repurchase program and increased the company's quarterly cash dividend by nearly 17 percent.
During the Friday call, the company characterized its balance sheet as "strong," and said returning cash to shareholders remains a high priority.
"We have access to the cash for offshore acquisitions, and we have access to the cash if we choose to repatriate it," Gonzalez said. "Obviously, we have an incentive to look outside the United States first if we choose to, but we have total flexibility as it relates to our cash."
One analyst asked whether management felt that AbbVie was vulnerable to a takeover.
"Our goal as a company is to stay a strong, sustainable, independent company," an executive on the call said.
AbbVie early Friday reported earnings and sales in the third quarter that exceeded analysts' expectations. It also raised its earnings forecast for the full year.
Standout products for the company have included Humira. The company said it's seeing positive results in studies in which Humira is used to treat a chronic inflammatory skin condition for which there are currently no approved treatment options. It's on track to submit its U.S. and European regulatory applications for the treatment this year.
In mid-morning trading on Friday, AbbVie stock was up 3.6 percent to $63.38 a share.
byerak@tribune.com
Twitter @beckyyerak
