ImmunoGen's Flagship Cancer Therapy Draws AbbVie's Attention With $10.1B Deal

AbbVie Inc ABBV has agreed to acquire ImmunoGen Inc IMGN and its flagship cancer therapy Elahere (mirvetuximab soravtansine-gynx), a first-in-class antibody-drug conjugate (ADC) approved for platinum-resistant ovarian cancer. 

In September, when JP Morgan upgraded ImmunoGen from Neutral to Overweight with a price target of $22, up from $9, the analyst noted that the company is well-positioned and potentially appealing as a "bolt-on" target for mergers and acquisitions or additional partnerships with pharmaceutical or biotechnology companies.

Under the transaction terms, AbbVie will acquire all outstanding shares of ImmunoGen for $31.26 per share in cash. The transaction values ImmunoGen at a total equity value of approximately $10.1 billion. 

The boards of directors of both companies have approved the transaction. 

This transaction is expected to close in the middle of 2024. 

ImmunoGen's oncology portfolio has the potential to help drive long-term revenue growth for AbbVie's oncology franchise. 

As a fast-growing solid tumor therapy, Elahere provides AbbVie with a potential multi-billion-dollar on-market medicine with expansion opportunities in earlier therapy lines and larger ovarian cancer market segments.

In Q3, Immunogen generated $105.2 million in Elahere net sales.

The proposed transaction is expected to be accretive to diluted earnings per share beginning in 2027.

Price Action: ABBV shares are up 2.18% at $141.52 on the last check Thursday. IMGN shares are up 81.7% at $29.19.