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.Â
Shares of ImmunoGen jumped greater than 80% Thursday, putting it heading in the right direction for its highest close since November 2000. Meanwhile, AbbVie’s stock rose greater than 2%.Â
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 firms developing ADCs, that are amongst the most well liked areas within the pharmaceutical industry, jumped on the news of the buyout.Â
That features Sutro Biopharma‘s stock, which spiked about 16% Thursday and shares of Mersana Therapeutics, which rose nearly 17%. Shares of ADC Therapeutics also 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 advanced greater than 1%.
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 finish the acquisition, which goals to strengthen its oncology pipeline, in the course of 2024.
Guggenheim analyst Michael Schmidt said the value of the deal reflects the “increasing interest we’ve seen from large biopharma firms wanting to extend their exposure” in ADCs, which he called an “attractive area.”
For instance, Pfizer agreed to amass Seagen, a pioneer in ADCs, for $43 billion earlier this 12 months. Merck and Daiichi Sankyo also recently agreed to jointly develop and commercialize three potential ADCs in a deal price as much as $22 billion.
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