AbbVie strikes deal to acquire ImmunoGen
Will pay $10 billion in purchase of Waltham cancer drug maker
Pharmaceutical giant AbbVie said Thursday it has agreed to pay more than $10 billion to buy Waltham cancer drug maker ImmunoGen, in the largest acquisition of a Massachusetts company this year.
The deal will bring the ovarian cancer therapy Elahere, a potential blockbuster treatment projected to ring up billions in sales over the coming decade, into AbbVie’s existing portfolio of oncology, immunology, neuroscience, and eye care treatments.
AbbVie’s purchase comes amid falling revenue for its top-selling drug Humira, an autoimmune treatment made at AbbVie’s plant in Worcester. Most of the company’s patents on Humira have expired in recent years, and the drug now faces lower-priced generic competition.
Rising sales of Elahere, the centerpiece of the buyout, will offset Humira declines after what AbbVie chief executive Richard Gonzalez termed in a webcast with analysts “the largest loss of [patent] exclusivity in the industry’s history.” The deal will broaden AbbVie’s existing portfolio of drugs that treat solid tumors and blood cancers, he said.
ImmunoGen, founded in 1980 with $3 million in seed financing, helped to pioneer a novel drug delivery technology, known as antibody-drug conjugates, which helps powerful oncology drugs target cancer cells without harming healthy cell tissue. In addition to Elahere, approved by US regulators last year, AbbVie will acquire ImmunoGen’s broader pipeline of experimental drugs based on that technology.
Antibody-drug conjugates have emerged “as one of the most prized possessions from both a big pharma business development and investor perspective,” biotech analysts Andy T. Hsieh and Tim Logo from investment bank William Blair wrote in a note to investors. “In our view, the acquisition validates the clinical and commercial performance of Elahere...” the analysts wrote. “AbbVie will likely be recognized as a formidable player in the [antibodydrug conjugates] space.”
The deal represents a 95 percent premium over ImmunoGen’s closing price on Wednesday. Shares of ImmunoGen jumped 82.7 percent to $29.35 on the Nasdaq exchange Thursday. Shares of AbbVie advanced 2.7 percent to
$142.34 on the New York Stock Exchange.
ImmunoGen had 277 employees at the end of last year, but it wasn’t immediately clear if they would all be given jobs at AbbVie when the acquisition is completed next year. ImmunoGen representatives didn’t respond to a request to discuss the deal. A spokeswoman for AbbVie said it was premature to comment on future employment plans.
AbbVie, based in North Chicago, Ill., has research and development sites in Cambridge and Worcester in addition to its Worcester manufacturing plant. It employs about 1,500 workers in Massachusetts and 50,000 worldwide. The company was spun off by Abbott Laboratories in 2013.
The deal for ImmunoGen is one of the largest biopharma industry buyouts this year. Earlier in the year, Pfizer paid $43 billion to purchase Washington state cancer drug maker Seagen, while Merck spent $22 billion to buy Daiichi Sankyo, a Japanese drug maker.
AbbVie’s purchase of ImmunoGen is by far the biggest buyout of any Massachusetts company this year, according to data compiled by technology firm Dealogic.
ImmunoGen’s management concluded that AbbVie, a much larger drug maker, could better market Elahere and other drugs in the Waltham company’s pipeline, its president, Mark Enyedy, said in a statement.
“This transaction is the culmination of our 40-year commitment to develop and deliver the next generation of [cancer drugs] and more good days for people living with cancer,” Enyedy’s statement said.
Under the agreement, which is subject to shareholder and regulatory approval, AbbVie will acquire all ImmunoGen stock for $31.26 a share, nearly double the company’s pre-transaction trading price. The all-cash transaction is valued at about $10.1 billion.
The deal would expand AbbVie’s existing oncology pipeline, giving it a platform to attack solid tumors like those seen in ovarian cancer, one of the leading causes of cancer death among women.