XML 25 R12.htm IDEA: XBRL DOCUMENT v3.21.2
Licensing, Acquisitions, and Other Arrangements
 6 Months Ended
Jun. 30, 2021
Licensing, Acquisitions, and Other Arrangements  
Licensing, Acquisitions, and Other Arrangements Licensing, Acquisitions and Other Arrangements
Acquisition of AllerganOn May 8, 2020, AbbVie completed its acquisition of Allergan plc (Allergan). The combination created a diverse entity with leadership positions across immunology, hematologic oncology, aesthetics, neuroscience, eye care and women's health. AbbVie's existing product portfolio and pipeline were enhanced with numerous Allergan assets and Allergan's product portfolio benefits from AbbVie's commercial strength, expertise and international infrastructure.
The acquisition of Allergan was accounted for as a business combination using the acquisition method of accounting. The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The valuation of assets acquired and liabilities assumed was finalized during the three months ended June 30, 2021. Measurement period adjustments to the preliminary purchase price allocation during the six months ended June 30, 2021 included: (i) an increase to intangible assets of $710 million; (ii) an increase to deferred income tax liabilities of $148 million; (iii) other individually insignificant adjustments for a net increase to identifiable net assets of $2 million; and (iv) a corresponding decrease to goodwill of $564 million. The measurement period adjustments primarily resulted from the completion of the valuation of certain license agreement intangible assets based on facts and circumstances that existed as of the acquisition date and did not result from intervening events subsequent to such date. These adjustments did not have a significant impact on AbbVie's results of operations for the three and six months ended June 30, 2021 and would not have had a significant impact on prior period results if these adjustments had been made as of the acquisition date.
Other Licensing & Acquisitions Activity
Cash outflows related to other acquisitions and investments totaled $345 million for the six months ended June 30, 2021 and $192 million for the six months ended June 30, 2020. AbbVie recorded acquired in-process research and development (IPR&D) charges of $97 million for the three months and $167 million for the six months ended June 30, 2021 and recorded acquired IPR&D charges of $853 million for the three and six months ended June 30, 2020.
TeneoOne and TNB-383B
In June 2021, AbbVie exercised its exclusive right to acquire TeneoOne, an affiliate of Teneobio, Inc., and TNB-383B, a BCMA-targeting immunotherapeutic for the potential treatment of relapsed or refractory multiple myeloma (R/R MM). In February 2019, AbbVie and TeneoOne entered a strategic transaction to develop and commercialize TNB-383B, a bispecific antibody that simultaneously targets BCMA and CD3 and is designed to direct the body's own immune system to target and kill BCMA-expressing tumor cells. AbbVie exercised its exclusive right to acquire TeneoOne and TNB-383B based on an interim analysis of an ongoing Phase 1 study. Under the terms of the agreement, AbbVie will make a $400 million warrant exercise payment subject to adjustments for certain expenses. Closing of the transaction is subject to regulatory approval. AbbVie could make additional payments of up to $250 million upon the achievement of certain development, regulatory and commercial milestones.
Soliton, Inc.
In May 2021, AbbVie announced that it entered into a definitive agreement with Soliton, Inc. (Soliton) to acquire Soliton and RESONIC, its Rapid Acoustic Pulse device which recently received U.S. Food and Drug Administration (FDA) 510(k) clearance and is a non-invasive treatment for the short-term improvement in the appearance of cellulite. Under the terms of the transaction agreement, AbbVie will pay $22.60 per share in cash for each outstanding share of Soliton for an enterprise value of approximately $550 million. Closing of the transaction is subject to regulatory approval.
Calico Life Sciences LLC
In July 2021, AbbVie and Calico Life Sciences LLC (Calico) announced an extension of their collaboration to discover, develop and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. This is the second collaboration extension and builds on the partnership established in 2014 and extended in 2018. The extension is for an additional three years, beginning in 2022, and AbbVie and Calico will each commit to contribute an additional $500 million which will be recorded as an expense in the condensed consolidated statement of earnings in the third quarter of 2021. AbbVie and Calico have advanced three clinical stage programs in immuno-oncology and neurodegeneration and have a portfolio of more than 20 early-stage programs targeting specific disease pathways.
Genmab A/S
In June 2020, AbbVie and Genmab A/S (Genmab) entered into a collaboration agreement to jointly develop and commercialize three of Genmab's early-stage investigational bispecific antibody therapeutics and entered into a discovery research collaboration for future differentiated antibody therapeutics for the treatment of cancer. Under the terms of the agreement, Genmab granted to AbbVie an exclusive license to its epcoritamab (DuoBody-CD3xCD20), DuoHexaBody-CD37 and DuoBody-CD3x5T4 programs. For epcoritamab, the companies will share commercial responsibilities in the U.S. and Japan, with AbbVie responsible for further global commercialization. Genmab will record net revenues in the U.S. and Japan, and the parties will share equally in pre-tax profits from these sales. Genmab will receive tiered royalties on remaining global sales. For the discovery research partnership, Genmab will conduct Phase 1 studies for these programs and AbbVie retains the right to opt-in to program development. AbbVie made an upfront payment of $750 million, which was recorded to IPR&D in the condensed consolidated statement of earnings in the three
months ended June 30, 2020. The agreement also includes additional payments of up to $3.2 billion upon the achievement of certain development, regulatory and commercial milestones for all programs.