AbbVie bolsters portfolio with $10.1 billion ImmunoGen buyout for cancer therapy

By:
on Dec 1, 2023
Listen
  • AbbVie has acquired ImmunoGen for $10.1 billion in cash, it announced recently.
  • Integrating ImmunoGen's Elahere may be a pivotal step for AbbVie to offset Humira's declining exclusivity.
  • The acquisition is set to finalise by mid-2024.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

AbbVie has announced its acquisition of ImmunoGen for $10.1 billion in cash, marking a strategic move amidst rising competition for their leading treatment, Humira.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

ImmunoGen’s Elahere, part of the innovative class of antibody-drug conjugates (ADC), specifically targets cancer cells, offering potential benefits in reducing toxicity for surrounding cells.

The integration of ImmunoGen’s Elahere is seen as a pivotal step for AbbVie to offset Humira’s declining exclusivity. BMO Capital Markets analyst Evan Seigerman highlighted the significance of this acquisition in potentially bridging the gap post-Humira, considering Elahere’s potential multi-billion dollar impact.

This move aligns with a surge in interest in ADC-focused companies, evident in Pfizer’s acquisition of Seagen in a $43 billion deal and Merck’s recent $5.5 billion partnership with Daiichi Sankyo for ADC development.

AbbVie’s offer of $31.26 per share represents a substantial 94.6% premium to ImmunoGen’s last trading price, triggering an 83% surge in ImmunoGen’s shares, reaching a nearly 23-year high. Despite this surge, analysts like Barclays’ Carter Gould view the deal as balanced, citing Elahere’s existing approval for ovarian cancer patients, minimizing clinical risk.

Elahere’s sales totalled $212 million in the nine months ending September, with projections pointing towards blockbuster status by 2030 despite growing competition.

The acquisition, set to finalize by mid-2024, reinforces AbbVie’s portfolio amid the anticipated decline in Humira sales due to biosimilar entries. Notably, their blockbuster cancer drug, Imbruvica, faced a 20% sales drop in the third quarter, encountering competition from other drugs in the market.

Imbruvica, among the 10 drugs subject to U.S. Medicare’s initial price negotiations starting in 2026, adds to AbbVie’s challenges in sustaining growth amidst a shifting market landscape.

AbbVie Health & pharma Mergers & Acquisitions