The big asset buy in the healthcare industry provided a healthy pop to the two companies involved on Thursday. The stock price of the buyer, sector mainstay AbbVie (ABBV -4.58%), enjoyed a nearly 3% lift after the news was announced, contrasting quite favorably to the sagging S&P 500 index's 0.7% slip.
AbbVie is buying ImmunoGen
Before market open that day, AbbVie and ImmunoGen (IMGN) announced in a joint press release that the former company is to acquire the latter. AbbVie is to pay $31.26 per share in cash for ImmunoGen in a transaction valued at roughly $10.1 billion. That per-share figure is nearly double ImmunoGen's closing price on Wednesday, indicating AbbVie's thirst for the deal.
ImmunoGen is a biotech company that focuses on cancer therapies. It has been in the news this year; in May, it reported that one of the drugs it's developed, Elahere, had performed well in a late-stage clinical trial to treat a certain type of ovarian cancer. The drug received its first approval from the Food and Drug Administration just over one year ago.
It isn't surprising that a company deeply involved in the hot and very competitive oncology segment would be sold at a premium.
AbbVie is eager to expand its presence in this field; in the press release, the company's CEO, Richard Gonzalez, was quoted as saying that the deal "demonstrates our commitment to deliver on our long-term growth strategy and enables AbbVie to further diversify our oncology pipeline across solid tumors and hematologic malignancies.
The deal should close next year
In the press release, AbbVie and ImmunoGen revealed that the boards of directors of both companies approved the acquisition. It is now subject to ratification by ImmunoGen shareholders, in addition to approval from the relevant regulatory bodies. The two companies expect the sale to close in mid-2024.
