AbbVie sees no need for major acquisitions-CFO

Wed Jan 9, 2013 12:27am EST

* Pipeline includes 10 products in pivotal testing

* Cash will be used for dividends, debt

By Deena Beasley

SAN FRANCISCO, Jan 8 (Reuters) - AbbVie Inc, the pharmaceutical company spun off by Abbott Laboratories, is unlikely to use its $7 billion cash balance for a large acquisition, the company's chief financial officer said on Tuesday.

"We are not really in a situation where we need to go and do a big deal," CFO Bill Chase said at the J.P. Morgan Healthcare Conference. "It doesn't seem to us to be a prudent way to use our cash."

Industry sources have speculated that AbbVie, which relies on arthritis drug Humira for the bulk of its sales revenue, may seek to boost its product portfolio by acquiring another drugmaker.

But Chase said the company was confident that its pipeline of 10 drugs in pivotal-stage testing and more than 10 in mid-stage trials will serve to meet future revenue growth.

The current pipeline, including a drug the company views as the leading experimental drug for hepatitis C, could be augmented by bringing in individual products through licensing deals or smaller "tuck-in acquisitions," he said.

AbbVie also aimed to return cash to shareholders in the form of dividend payments, he added.

"We are comfortable right now with the overall balance sheet," Chase said, noting that AbbVie has outstanding debt of $15.7 billion. "Cash right now is an important source of liquidity for us."

AbbVie, which was Abbott's branded pharmaceutical business, began trading on the New York Stock Exchange on Jan. 2.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article