The acquisition includes Pharmacyclics’ blockbuster, Imbruvica (ibrutinib), a first-in-class Bruton's tyrosine kinase (BTK) inhibitor for several blood cancer indications.
The deal will transfer a clinical programme with more than 50 studies evaluating Imbruvica for further indications such as treatment of early solid tumours and Graft v Host disease.
AbbVie said it plans to make the combined company “an emerging leader in the haematological oncology space” – a growing market which is approaching $24bn globally.
AbbVie will pay $261.25 per share in a mixture of 58% cash and 42% equity, a transaction valuing Pharmacyclics at approximately $21bn. The purchase will be funded through existing cash, new debt and stock, the company said.
Imbruvica is a BTK inhibitor approved for three blood cancers: chronic lymphocytic leukaemia, mantle cell lymphoma and Waldenstrom's macroglobulinaemia.
On the market since 2013, it is the only therapy to receive three Breakthrough Therapy Designations by the US FDA.
AbbVie said it plans to leverage its own immunology expertise to find more indications for the drug.
"The acquisition of Pharmacyclics is a strategically compelling opportunity. The addition of Pharmacyclics' talented and innovative team will add enormous value to AbbVie," said Richard Gonzalez, AbbVie CEO.
"Its flagship product, Imbruvica, is not only complementary to AbbVie's oncology pipeline, it has demonstrated strong clinical efficacy across a broad range of hematologic malignancies and raised the standard of care for patients."
Aside from its lead product, Pharmacyclics makes small-molecule drugs for cancer and other immune-mediated diseases. It has three drug candidates in clinical development and several preclinical programmes based out of headquarters in Sunnyvale, California.