Is Pharmacyclics weighing up a sale?

Shares in Pharmacyclics leapt yesterday on speculation that the company is considering a sale, with Johnson & Johnson (J&J) considered the most likely buyer.

Pharmacyclics is riding high at the moment, with its J&J-partnered cancer therapy Imbruvica (ibrutinib) making $550 million last year and widely predicted to develop into a multi-billion brand if it can extend into new indications.

Neither company has commented on the speculation – attributed to people close to Pharmacyclics in a report published yesterday by Bloomberg – but the price tag for the business is reported to be in the region of $19 billion.

Imbruvica – a Bruton's tyrosine kinase (BTK) inhibitor – was first approved as a treatment for mantle cell lymphoma in 2013, and this was followed by extensions into previously-treated chronic lymphocytic leukaemia (CLL) and CLL patients who carry a deletion in chromosome 17 the following year.

Pharmacyclics and J&J also have phase III trials of the drug ongoing in diffuse large B-cell lymphoma, follicular lymphoma and marginal zone lymphoma, and phase II studies in multiple myeloma, acute myeloid leukaemia (AML) and acute lymphoblastic leukaemia (ALL) which could expand its target patient population almost tenfold.

Over the long-term, Pharmacyclics also has ambitions to extend the use of the drug into solid tumour treatment on the back of what chief executive Robert Duggan recently described as "compelling preclinical evidence" in lung, breast, colon and pancreatic cancers, as well as the fact that it "appears to work well in combination with other cancer therapies" in these tumour types.

Novartis has also been linked to Pharmacyclics in the past, though J&J is considered the more likely suitor as it would be able to get control of all the profits from Imbruvica. Other companies ground out of the rumour mill include Gilead Sciences and Celgene, which are also active in the haematological malignancy market.

Aside from Imbruvica, any acquirer would also get histone deacetylase (HDAC) inhibitor abexinostat – another blood cancer drug in phase II trials – a follow-up BTK inhibitor just entering the clinic with potential in inflammatory and autoimmune disease, and a Factor VIIa inhibitor for non-cancer indications.