Abbvie Acquires Cerevel Therapeutics for $8.7 Billion

Last Updated: 11. Dezember 2023By

Just a few days ago I reported to you that the US pharmaceutical giant Abbvie offered a proud 10.1 billion US dollars (USD – about 9.3 billion euros) for the acquisition of the US biotechnology company Immunogen. Now Abbvie has struck again.

On St. Nicholas Day (06.12.2023), the company based in North Chicago / Illinois (60 km north of Chicago) announced that it had signed another takeover agreement. Abbvie now also wants to take over the US startup Cerevel Therapeutics Holdings Inc., specialized in the development of neurological drugs.

Abbvie values Cerevel at about 8.7 billion dollars According to the takeover agreement, Abbvie has agreed to pay the Cerevel shareholders $45.00 in cash for each outstanding share. With this takeover offer, Abbvie values Cerevel Therapeutics, including debt, at about 8.7 billion USD.

This offer includes a premium of 21.9% on the closing price of the Cerevel share on 06.12.2023 and is an early Christmas gift for the investors who have invested in Cerevel shares. But before I present you with more details on the takeover, I would like to briefly sketch the companies involved.

The companies in a nutshell The newly founded 2018 and based in Cambridge / Massachusetts (Greater Boston) Cerevel Therapeutics Holdings Inc. is a biotechnology company specializing in the development of preparations for the treatment of neuroscience diseases.

Cerevel Therapeutics has no products on the market, but a wide range of development pipelines, including 5 clinical trial preparations and several preclinical drugs. These preparations are intended to treat diseases such as schizophrenia, Alzheimer’s psychosis, epilepsy, panic disorder and Parkinson’s disease.

The well over 300 Cerevel employees did not generate any revenue in the 2022 fiscal year. The operating profit (EBIT) amounts to -407 million USD.

Abbvie Inc. (own spelling: AbbVie) was created in 2013 as a spin-off of the pharmaceutical company Abbott Laboratories. The pharmaceutical and biotechnology company is primarily active in the fields of immunology, oncology, neurology and virology.

Abbvie employs more than 50,000 employees in locations in more than 70 countries worldwide. In Germany, the company is represented in Wiesbaden, Ludwigshafen and Berlin.

In the 2022 fiscal year, the pharmaceutical giant achieved sales of around 58 billion USD. The operating profit (EBIT) was 18.8 billion USD.

Abbvie wants to expand the neuro division The patent rights for Abbvie’s bestseller Humira, a preparation for the treatment of chronic plaque psoriasis, have expired. Therefore, the company is investing more heavily in new, promising preparations.

Thus, Abbvie wants to expand its offer of neurological preparations through the takeover of Cerevel in order to secure medium-term sources of income, as Abbvie CEO Richard A. Gonzalez confirms in a statement on the takeover:

„Our existing neuroscience portfolio and our combined pipeline with Cerevel represent a significant growth opportunity far into the next decade.“

This is how the stock market reacted On the day the takeover was announced, the Cerevel share price rose 11.4% to 41.13 USD. This still remained significantly below the 45 USD offered by Abbvie.

The price of Abbvie shares also rose on 07.12.2023, by 1% to 147.97 USD. The investors are obviously convinced that the expensive takeover is a good investment.

This is how it will continue Abbvie expects the transaction to be completed by mid-2024. Before that, the Cerevel shareholders must still agree to the transaction and the responsible supervisory authorities must also give the green light for the takeover.