The Big Pharma world saw yet another multibillion-dollar deal in the hot field of antibody drug conjugates (ADCs) on Thursday. AbbVie announced plans to acquire ImmunoGen — and the Massachusetts-based biotech’s recently approved ADC treatment for ovarian cancer — for $10.1 billion in cash.
A year ago, ImmunoGen’s ovarian cancer drug, named Elahere, became the first ADC approved by the FDA to treat ovarian cancer. By acquiring this asset, North Chicago-based AbbVie is seeking to strengthen its presence in the solid tumor space — a move the company is making as its two most profitable drugs, Humira and Imbruvica, begin to face daunting competition. Humira’s exclusivity expired this year, and Imbruvica sales are down due to the introduction of BeiGene’s oral treatment Brukinsa.
The deal follows several other large acquisitions that have occurred in the ADC space this year. For example, Pfizer announced its $43 billion acquisition of Seagen, which is considered an ADC pioneer, in March. In October, Merck announced a joint development and commercialization deal for three Daiichi Sankyo ADC treatments — if milestones are met, Merck could end up paying Daiichi Sankyo up to $22 billion. Some other examples of large drugmakers that have recently picked up ADC assets include Bristol Myers Squibb, AstraZeneca, GSK and BioNTech.
ADCs are a popular target for pharma acquisitions because they boast promising potential to make cancer treatment more effective. These drugs deliver toxic payloads directly to cancer cells, aiming to minimize damage to healthy cells and improve precision when attacking tumors.
Elahere is meant to treat ovarian cancer patients who have demonstrated a resistance to platinum-based chemotherapies. The drug targets folate receptor alpha, a protein that is often overexpressed on the surface of ovarian cancer cells. The ADC is approved for use in ovarian cancer patients who have a high expression of this protein and have also already received one to three prior treatment regimens.
The drug generated $212 million in sales during the first three quarters of 2023. By buying an ADC that is already on the market, AbbVie could be trying to avoid the fate it suffered after its first big ADC deal.
In 2016, AbbVie paid $5.8 billion to acquire cancer drugmaker Stemcentrx and its lead ADC candidate, Rova-T. The deal was meant to beef up AbbVie’s cancer portfolio with a lucrative drug, but Rova-T ended up failing multiple small cell lung cancer trials. In 2019, AbbVie admitted that the drug wasn’t going anywhere and eliminated the entire development program.
One industry expert — Dave Latshaw, former AI drug development lead at Johnson & Johnson and current CEO of BioPhy — thinks AbbVie’s new deal signals that it is ready to move on from the Stemcentrx flop.
“The acquisition of ImmunoGen shows Abbvie’s commitment to ADCs and highlights their willingness to push past previous strategic blunders in the same modality. While the move looks to be primarily about Elahere, which has shown great clinical results in ovarian cancer, the price highlights that they are confident in the rest of ImmunoGen’s pipeline as well and generally bullish on the ADC space,” he wrote in an email.
With the acquisition, AbbVie gains access to the ImmunoGen’s pipeline of ADCs along with Elahere. Two of the most notable assets in the pipeline include IMGN-151, another ADC to treat ovarian cancer, and pivekimab sunirine, which targets a rare blood cancer.
Damien Conover, director of healthcare equity research for Morningstar, wrote in an emailed statement that he thinks AbbVie “is largely paying a fair price” for ImmunoGen. He projects that Elahere’s peak annual sales will be close to $2 billion.
Conover anticipates widespread adoption of Elahere among ovarian cancer patients whose initial treatment proved ineffective. This expectation is grounded in the findings of a recent phase 3 study, which revealed that the drug reduced tumor size and extended the lifespan of ovarian cancer patients when compared to traditional chemotherapy options.
“Additional studies in platinum-sensitive ovarian cancer patients should come out over the next few years and could potentially almost double the market size, adding upside potential to our projection if the data is positive,” Conover wrote.
He also believes the deal will help drive adjusted-earnings growth over the next five years, which is crucial considering how Humira biosimilars will likely create a drag on earnings for several years.
Another industry leader — Trilliant Health CEO Hal Andrews — also thinks that the deal seems like a solid one.
“Pharmaceutical companies have access to data earlier than everyone else, and their M&A activity is a reliable indicator of emerging disease trends. Given national trends of increasing cancer mortality in the 30-39, this transaction makes a ton of sense,” he wrote via email.
The deal is expected to close in mid-2024, subject to regulatory approval.
Photo: Smith Collection/Gado (Getty Images)
