AbbVie has agreed to buy ImmunoGen for $10.1 billion in cash, offering a rich premium for the maker of ovarian cancer treatment drug Elahere, the company said Thursday. AbbVie will pay $31.26 per share for IMGN stock. That's a roughly 95% premium to the biotech firm's closing price on Wednesday.
AbbVie, based in North Chicago, Ill., said it expects to complete the acquisition in the middle of 2024.
"The acquisition of ImmunoGen demonstrates our commitment to deliver on our long-term growth strategy and enables AbbVie to further diversify our oncology pipeline across solid tumors and hematologic malignancies," AbbVie Chief Executive Richard Gonzalez said in a statement.
IMGN Stock: Daiichi Competition
On today's stock market, IMGN stock popped 82.8% to close at 29.35. ABBV stock rose 2.8% to 142.39.
Waltham, Mass.-based ImmunoGen is a leader in the field of antibody-drug conjugates (ADCs) for the treatment of cancer.
Elahere is a treatment for patients with a specific form of ovarian cancer. It targets a receptor called folate receptor alpha.
In a note to clients, Truist Securities analyst Asthika Goonewardene said Elahere faces growing competition from Daiichi. "However with a partner like AbbVie, who has much deeper pocket and marketing prowess, we anticipate Elahere will be able to compete better against Daiichi's R-DXd, and leverage its early mover advantage," Goonewardene said.
AbbVie reported third quarter earnings that topped estimates, but sales of its Humira arthritis therapy drug continued to plummet.
During the September quarter, AbbVie earned an adjusted $2.95 per share on $13.93 billion in revenue. Earnings for AbbVie came in better than expectations for $2.87 a share, but skidded 19.4% year over year.
AbbVie's Humira Sales Tumble
Meanwhile, Humira sales tumbled 36% to $3.55 billion following the launch of biosimilar rivals this year in the U.S.
Also, sales of aesthetic treatments, which includes AbbVie's Botox, fell 4.7% on a reported basis to $1.24 billion.
On Nov. 2, ImmunoGen reported better-than-expected earnings and sales, lifting IMGN stock. The company earned 10 cents a share on sales of $113.4 million. In the year-ago period, ImmunoGen lost 31 cents a share. Sales surged 638% year over year.
ABBV stock has retreated 14% in 2023. Prior to today's deal, IMGN stock owned a Relative Strength Rating of 99, according to IBD Stock Checkup.
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