Last Thursday, the stock of US biotech company Immunogen skyrocketed on the US tech exchange Nasdaq. The stock price jumped by almost 83% to 29.35 US dollars (USD) during the course of the day, causing jubilation among Immunogen’s shareholders.

The cause of this explosive stock increase was an acquisition agreement whose signing Immunogen and US pharmaceutical giant Abbvie announced on 30.11.2023 in a joint press release.

Before I go into further details of the agreement, however, I would like to introduce you to the two companies as usual.

The Companies in Profile Immunogen, Inc., founded in 1981 and based in Waltham/Massachusetts (Greater Boston area), is a biotechnology company focused on developing antibody-drug conjugates (ADCs) to target cancer cells.

Immunogen has developed the promising ADC medication Elahere for the treatment of ovarian cancer, which received an accelerated approval from the US Food and Drug Administration (FDA) in 2022. After Elahere was also positively evaluated in a Phase 3 study, full approval of Elahere in the USA and then also in Europe is only a matter of time. In addition to Elahere, Immunogen has other ADC cancer medications in its development pipeline.

The approximately 300 Immunogen employees generated a revenue of 108.8 million USD (about 100 million euros) in the 2022 fiscal year. The operating profit (EBIT) was -217.5 million USD (about 200 million euros).

Abbvie Inc. (own spelling: AbbVie) was founded in 2013 as a spin-off from Abbott Laboratories. The pharmaceutical and biotech company based in North Chicago/Illinois (60 km north of Chicago) is primarily active in the fields of immunology, oncology and virology.

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

In the 2022 fiscal year, the pharmaceutical giant generated a revenue of almost 58 billion USD. The operating profit (EBIT) was 18.8 billion USD.

The Acquisition Agreement in Detail According to the acquisition agreement, Abbvie offers Immunogen shareholders a generous 31.26 USD in cash per share. This values Immunogen at about 10.1 billion USD (about 9.3 billion euros). The offer includes a takeover premium of almost 95% compared to the closing price of Immunogen shares on 29.11.2023, the day before the announcement of the acquisition agreement.

With the acquisition of Immunogen, Abbvie wants to expand its oncology division, as Abbvie CEO Richard Gonzalez emphasizes: „The acquisition of Immunogen demonstrates our commitment to the implementation of our long-term growth strategy and enables AbbVie to further diversify its oncology pipeline for solid tumors and hematological malignancies.“

How the Market Reacted As already mentioned, the price of Immunogen shares on the day of the announcement jumped by almost 83% to 29.35 USD. This means that the price is only slightly below the offered 31.26 USD. Obviously, investors welcome the offer and are convinced of the completion of the takeover.

The price of Abbvie shares also rose on 30.11.2023. It was at 142.39 USD at the end of trading; that was 2.8% more than the day before. Here, investors are mainly honoring the purchase of the lucrative ovarian cancer preparation Elahere. Ovarian cancer is the leading cause of death from gynecological cancers in the USA.

This is how it will continue The transaction is subject to the usual closing conditions, including the receipt of regulatory approvals and the approval of Immunogen shareholders. Both companies expect the deal to be completed by mid-2024.