Shares of ImmunoGen Inc. rocketed toward a 23-year high Thursday after the biotechnology company agreed to be acquired buy AbbVie Inc. in a cash deal valued at $10.1 billion.
AbbVie said the deal includes ImmunoGen’s antibody-drug conjugate (ADC) Elahere, which has been approved as a treatment for ovarian cancer.
ImmunoGen’s stock
IMGN,
soared 81% in morning trading, putting it on track for the highest close since November 2000. AbbVie shares
ABBV,
gained 0.9%.
Under the terms of the agreement, AbbVie will pay $31.26 in cash for each ImmunoGen share outstanding, which represents a 94.6% premium above Wednesday’s closing price of $16.06. ImmunoGen shares haven’t traded as high as the per-share bid price since November 2000.
Based on ImmunoGen having 266.26 million shares outstanding as of Oct. 25, the per-share bid price implies a market capitalization for the biotech of $8.32 billion.
“With global commercial infrastructure and deep clinical and regulatory expertise, AbbVie is the right company to accelerate geographic and label expansion, and achieve the full potential of ELAHERE as the first and only ADC approved in ovarian cancer,” said ImmunoGen Chief Executive Mark Enyedy.
AbbVie said the deal, which is expected to close in the middle of 2024, is expected to add to earnings beginning in 2027.
“The acquisition of ImmunoGen demonstrates our commitment to deliver on our long-term growth strategy and enables AbbVie to advance diversify our oncology pipeline across solid tumors and hematologic malignancies,” said AbbVie Chief Executive Richard Gonzalez.
ImmunoGen’s stock has rocketed 486% year to date while AbbVie shares have dropped 13.5%. In comparison, the iShares Biotechnology ETF
IBB
has lost 8% this year and the S&P 500
SPX,
has advanced 18.7%.
