Biotech stocks jump on AbbVie deal to buy cancer drugmaker ImmunoGen for  billion
Biotech stocks jump on AbbVie deal to buy cancer drugmaker ImmunoGen for  billion


Test tubes are seen in entrance of a displayed AbbVie brand on this illustration taken on May 21, 2021.

Dado Ruvic | Reuters

Biotech stocks rose Thursday as AbbVie introduced plans to buy cancer drug developer ImmunoGen for $10.1 billion. 

Shares of ImmunoGen closed practically 83% larger Thursday, whereas AbbVie’s inventory closed nearly 3% larger.

ImmunoGen develops cancer medicine referred to as antibody-drug conjugates, or ADCs, that are designed to straight kill cancer cells and spare wholesome ones. Shares of different biotech firms creating ADCs, that are among the many hottest areas within the pharmaceutical business, jumped on the information of the buyout. 

That consists of Sutro Biopharma‘s inventory, which closed practically 13% larger Thursday and shares of Mersana Therapeutics, which closed up greater than 3%. Shares of ADC Therapeutics additionally closed 6% larger Thursday.

The SPDR S&P Biotech ETF, which focuses on small and midsize biotech firms, closed up 2% Thursday. The Nasdaq Biotechnology Index closed greater than 1% larger.

Under the phrases of the deal, AbbVie can pay $31.26 a share in money for ImmunoGen, a roughly 95% premium to Wednesday’s closing value. AbbVie stated it expects to full the acquisition, which goals to strengthen its oncology pipeline, in the course of 2024.

Guggenheim analyst Michael Schmidt stated the value of the deal displays the “rising curiosity we have now seen from giant biopharma firms wanting to enhance their publicity” in ADCs, which he referred to as an “enticing space.”

For instance, Pfizer agreed to purchase Seagen, a pioneer in ADCs, for $43 billion earlier this 12 months. Merck and Daiichi Sankyo additionally just lately agreed to collectively develop and commercialize three potential ADCs in a deal price up to $22 billion.

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