Why AbbVie Stock Jumped Today
Key Points
AbbVie is making smart moves to bolster its lucrative immunology business.
The healthcare leader is working to diversify its sales and profits.
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Shares of AbbVie (NYSE: ABBV) climbed on Monday after the pharmaceutical giant struck a deal to acquire clinical-stage biotech Apogee Therapeutics (NASDAQ: APGE) for $10.9 billion.
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AbbVie is restocking its drug portfolio
Under the terms of the deal, AbbVie would purchase Apogee for $135.11 per share in cash. That's a 49% premium over the stock's closing price on Thursday, the last trading day before the deal's announcement.
Apogee brings a promising pipeline of experimental drugs targeting dermatologic, respiratory, and other immunological diseases. Its lead drug candidate, zumilokibart, is a potentially best-in-class treatment for atopic dermatitis that could offer a far more convenient dosing schedule than other leading therapies.
"Apogee's pipeline adds highly differentiated clinical-stage assets, further expanding our robust immunology portfolio in areas of significant patient need, including atopic dermatitis and asthma," AbbVie CEO Robert Michael said. "With our deep scientific expertise and proven capabilities, we are uniquely positioned to rapidly advance these programs and continue to transform the standard of care in inflammatory diseases."
Diversifying its revenue base
The acquisition is projected to close in the third quarter, subject to shareholder and regulatory approval. The financial payoff for AbbVie, however, will likely take much longer. The healthcare titan doesn't expect the deal to add to its adjusted earnings per share until 2032.
Still, acquiring Apogee should eventually help lessen AbbVie's reliance on its blockbuster immunology drugs, Skyrizi and Rinvoq, which together produced $6.6 billion in net revenue in the first quarter alone.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie. The Motley Fool has a disclosure policy.
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