AbbVie's announcement of its $10.1 billion acquisition of cancer drug developer ImmunoGen led to a significant surge in biotech stocks. ImmunoGen specializes in antibody-drug conjugates (ADCs), a cutting-edge approach to cancer treatment that targets cancer cells directly while sparing healthy ones. ImmunoGen's shares soared by nearly 83%, and AbbVie's stock increased by almost 3%. This news also positively impacted other biotech companies involved in ADC development.
Sutro Biopharma's stock rose by nearly 13%, Mersana Therapeutics saw an increase of more than 3%, and ADC Therapeutics experienced a 6% gain. The SPDR S&P Biotech ETF, focusing on small and midsize biotech firms, closed up 2%, while the Nasdaq Biotechnology Index closed more than 1% higher. AbbVie will pay $31.26 per share in cash for ImmunoGen, representing a substantial 95% premium to Wednesday's closing price. The acquisition is expected to strengthen AbbVie's oncology pipeline, with the completion slated for mid-2024.
Guggenheim analyst Michael Schmidt noted the increasing interest among large biopharma companies in ADCs, considering it an attractive area. This move follows Pfizer's $43 billion acquisition of Seagen, a pioneer in ADCs, earlier in the year. Additionally, Merck and Daiichi Sankyo entered a joint venture to develop and commercialize three potential ADCs in a deal worth up to $22 billion. The trend suggests a growing focus on ADCs within the pharmaceutical industry.
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