Cramer reacts to AbbVie buying Cerevel Therapeutics

Cerevel Therapeutics Holdings Inc (NASDAQ: CERE) jumped some 12% today after AbbVie Inc (NYSE: ABBV) said it will buy the drug company that focuses primarily on neurological disorders.

AbbVie seems to be on a buying spree

AbbVie is willing to spend about $8.7 billion to acquire the Nasdaq-listed firm that values each of its share at $45.

On CNBC’s “Squawk on the Street”, famed investor Jim Cramer dubbed the deal a “stretch and a reach” today and said it shows how desperately AbbVie is trying to “diversify away from what it currently has”.

Just last week, the pharmaceutical behemoth also announced plans of buying ImmunoGen Inc for $10.1 billion to expand its footprint in oncology as Invezz reported here.

$ABBV is currently down over 10% versus its year-to-date high.

Cramer says neuro is hard to crack

AbbVie is making acquisitions to improve its drug pipeline because Humira – previously its top-selling treatment is now facing intense competition.

The New York listed firm is interested in Cerevel Therapeutics particularly for its Emraclidine candidate for Schizophrenia. According to Jim Cramer, though:

I don’t want to say there’s no hope. I’m saying anything neuro is tough to crack. No one succeeded in Schizophrenia in the last 50 years. No one really know what to do.

AbbVie expects this transaction to complete in the first half of 2024. The news arrives more than a month after AbbVie reported its financial results for the third quarter that handily topped Street estimates.