Biotech shares bounce on AbbVie deal to purchase most cancers drugmaker ImmunoGen

Biotech shares rose Thursday as AbbVie introduced plans to buy most cancers drug developer ImmunoGen for $10.1 billion. 

Shares of ImmunoGen jumped greater than 80% Thursday, placing it on monitor for its highest shut since November 2000. In the meantime, AbbVie’s inventory rose greater than 2%. 

ImmunoGen develops most cancers medicine known as antibody-drug conjugates, or ADCs, that are designed to immediately kill most cancers cells and spare wholesome ones. Shares of different biotech firms growing ADCs, that are among the many hottest areas within the pharmaceutical trade, jumped on the information of the buyout. 

That features Sutro Biopharma‘s inventory, which spiked about 16% Thursday and shares of Mersana Therapeutics, which rose practically 17%. Shares of ADC Therapeutics additionally popped about 15% Thursday.

The SPDR S&P Biotech ETF, which focuses on small and midsize biotech firms, rose 3% Thursday. The Nasdaq Biotechnology Index superior greater than 1%.

Beneath 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 mentioned it expects to finish the acquisition, which goals to strengthen its oncology pipeline, in the course of 2024.

Guggenheim analyst Michael Schmidt mentioned the worth of the deal displays the “increasing interest we have seen from large biopharma companies wanting to increase their exposure” in ADCs, which he known as an “attractive area.”

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

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