Test tubes are seen in front of a displayed AbbVie logo on this illustration taken on May 21, 2021.
Dado Ruvic | Reuters
Biotech stocks rose Thursday as AbbVie announced plans to buy cancer drug developer ImmunoGen for $10.1 billion.
Shares of ImmunoGen closed nearly 83% higher Thursday, while AbbVie’s stock closed almost 3% higher.
ImmunoGen develops cancer drugs called antibody-drug conjugates, or ADCs, that are designed to directly kill cancer cells and spare healthy ones. Shares of other biotech corporations developing ADCs, that are amongst the most popular areas within the pharmaceutical industry, jumped on the news of the buyout.
That features Sutro Biopharma‘s stock, which closed nearly 13% higher Thursday and shares of Mersana Therapeutics, which closed up greater than 3%. Shares of ADC Therapeutics also closed 6% higher Thursday.
The SPDR S&P Biotech ETF, which focuses on small and midsize biotech corporations, closed up 2% Thursday. The Nasdaq Biotechnology Index closed greater than 1% higher.
Under the terms of the deal, AbbVie pays $31.26 a share in money for ImmunoGen, a roughly 95% premium to Wednesday’s closing price. AbbVie said it expects to complete the acquisition, which goals to strengthen its oncology pipeline, in the midst of 2024.
Guggenheim analyst Michael Schmidt said the worth of the deal reflects the “increasing interest now we have seen from large biopharma corporations wanting to increase their exposure” in ADCs, which he called an “attractive area.”
For instance, Pfizer agreed to acquire Seagen, a pioneer in ADCs, for $43 billion earlier this yr. Merck and Daiichi Sankyo also recently agreed to jointly develop and commercialize three potential ADCs in a deal price up to $22 billion.
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