AbbVie to buy cancer drugmaker ImmunoGen for $10 billion as Humira faces heat

(Reuters) -AbbVie will buy ImmunoGen for $10.1 billion in cash, it said on Thursday, the latest major drugmaker to buy a developer of ‘guided missile’ cancer therapies as the company’s top-seller Humira grapples with fierce competition.

ImmunoGen’s Elahere belongs to a new class of treatments called antibody-drug conjugates (ADC) that precisely targets cancer cells, potentially reducing toxicity for other cells.

The drug, approved for ovarian cancer patients who have received previous therapies, is also being tested in earlier lines of treatment. Elahere generated $212 million in sales for the nine months ended September.

Interest in ADC-makers have surged over the past year. Pfizer is in the middle of buying ADC pioneer Seagen in a $43 billion deal while Merck last month said it would pay Japanese drugmaker Daiichi Sankyo $5.5 billion to jointly develop three ADCs.

AbbVie will also get access to Immunogen’s follow-on pipeline of ADCs, including early-stage ovarian cancer candidate IMGN-151 and a mid-stage drug pivekimab sunirine for a rare type of blood cancer.

AbbVie has offered $31.26 per share in cash, representing a premium of 94.6% to Immuogen stock’s last close.

Immunogen’s shares surged 82% to a near 23-year high of $29.34 in early trading. They have more than tripled in value this year, after the company said in May that Elahere had helped extend the lives of patients in a late-stage trial.

Humira’s sales are expected to see a 35% erosion this year following the entry of over half a dozen biosimilars, including those from Amgen and German drugmaker Boehringer Ingelheim.

Meanwhile, AbbVie’s cancer drugs sales declined more than 8% in the third quarter to $1.51 billion, primarily due to increased competition to Imbruvica.

Imbruvica is also one of the 10 drugs that will be subject to the first-ever price negotiations by U.S. Medicare insurance plans, expected to come into effect starting 2026.

(Reporting by Manas Mishra and Leroy Leo in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila)