AbbVie to Buy Drug Developer Cerevel for $8.7 Billion

Reuters

11:35 JST, December 7, 2023

AbbVie said on Wednesday it would buy Cerevel Therapeutics, a developer of drugs for neurological conditions, for about $8.7 billion in a bid to replace revenue as its huge-selling arthritis drug Humira faces a raft of new competition.

It marks the second large deal for AbbVie in the past week, coming days after it agreed to buy cancer drug developer ImmunoGenIMGN.O for $10.1 billion in cash, highlighting its appetite to place big bets on promising new medicines.

It is paying $45 per share in cash for Cerevel, which is developing drugs for Alzheimer’s, Parkinson’s, psychosis, epilepsy, and panic disorder. Its experimental drug emraclidine is in midstage trials as a treatment for schizophrenia that will yield data the company hopes can be used to seek regulatory approval.

The deal represents a 73% premium to Ceverel’s closing share price on Dec. 1, before rumors started circulating among traders about a potential sale of the company. The stock had risen 42% since Dec. 1, when Reuters reported on Wednesday afternoon that AbbVie was nearing a deal to buy the company for $45 per share.

Revenue from Humira, once the top-selling drug in the world, is expected to fall precipitously following market entry of over half a dozen biosimilar versions of the drugs this year in the U.S. It already faced competition in Europe.

Humira sales, which topped out above $21 billion in 2022, are expected to be below $9 billion next year.

Meanwhile, sales of AbbVie’s blockbuster leukemia drug Imbruvica dropped 20% in the third quarter due to competition from BeiGene’sK Brukinsa and AstraZeneca’s Calquence.

Imbruvica is also one of the 10 drugs that will be subject to the first-ever price negotiations by U.S. Medicare health plans, with new prices expected to come into effect in 2026.

Cambridge, Massachusetts-based Cerevel was started in 2018 when Pfizer carved out its division developing drugs for the central nervous system into a standalone company backed by a $350 million investment from Bain.

Cerevel was listed on the New York stock market in 2020. Bain and Pfizer hold stakes of about 36% and 15%, respectively.

Cerevel shares were up 15.5%, while AbbVie shares were flat in extended trading.