AbbVie pays $10B to acquire ImmunoGen, doubling down on red-hot ADC cancer field

The sizzling antibody-drug conjugate (ADC) field is at the center of another major life sciences deal. 

This time, AbbVie is shelling out $10.1 billion in cash to acquire ImmunoGen, maker of the ovarian cancer treatment Elahere, which won accelerated approval from the FDA about a year ago.

The acquisition accelerates AbbVie’s entry into the solid tumor space and strengthens the company’s oncology pipeline, CEO Rick Gonzalez said on a call Thursday. Establishing a strong presence in solid tumors has been a “strategic priority for AbbVie,” and ImmunoGen represents an “extremely compelling opportunity,” he said.

With the buyout, AbbVie is rejoining the likes of AstraZeneca, BioNTech, Gilead Sciences, GSK, Merck & Co. and Pfizer on a list of pharma companies that have spent mightily to acquire ADC programs. By deal value, the proposed buyout ranks third among biopharma M&A transactions announced this year, trailing Pfizer’s $43 billion offer for another ADC giant, Seagen, and Merck’s $10.8 billion takeover of immunology company Prometheus.

AbbVie was actually one of the earliest Big Pharma companies to identify ADCs as a promising field. Back in 2011, when AbbVie was still part of Abbott, the company paid $8 million upfront to Seagen (then called Seattle Genetics) to utilize the latter’s ADC technology on a single cancer target.

Now, ImmunoGen could give AbbVie a chance to clear its ADC reputation after another of its deals in the space turned into a flop.

AbbVie's first large ADC play came in 2016 when the company put down $5.8 billion to acquire Stemcentrx. But the crown jewel of the deal, DLL3-targeted ADC Rova-T, failed multiple small cell lung cancer trials until AbbVie eventually admitted defeat and scrapped the entire program in 2019. Rova-T was one of the most notable failures of the ADC field, and the setback disrupted AbbVie’s plan to move into solid tumors.

This time, AbbVie is getting an ADC that’s already on the market. An FRα-directed ADC, Elahere was approved by the FDA in November 2022 as a treatment for advanced ovarian cancer that’s resistant to platinum chemotherapy.

Earlier this year, the drug’s MIRASOL confirmatory trial was hailed as a landmark success. In the study, Elahere became the first medicine to show an overall survival benefit in platinum-resistant ovarian cancer.

The drug is expected to generate around $500 million in sales in 2024, and Wall Street analysts on average projected about $2 billion in peak sales at the end of the decade, according to Barclays.

To reach that threshold, Elahere will need to move into earlier lines of treatment later this decade. Trials are ongoing to test Elahere—either by itself or with bevacizumab—in FRα-high, platinum-sensitive ovarian cancer. And AbbVie plans to explore adding Elahere to either bevacizumab or PARP inhibitors in the first-line maintenance setting, with phase 3 studies expected to begin in 2024 and 2025, respectively.

AbbVie made the ImmunoGen announcement just as the company’s own c-Met ADC candidate telisotuzumab-vedotin (Teliso-V) showed a 35% response rate in EGFR wild type, advanced nonsquamous non-small cell lung cancer. With the mid-stage results, AbbVie is preparing to seek accelerated approval with the FDA.

Tapping more than four decades of ADC experience from ImmunoGen will likely make AbbVie a formidable player in the ADC space, William Blair analysts said in a Thursday note. AbbVie’s infrastructure, combined with ImmunoGen’s know-how, could help further entrench Elahere in ovarian cancer and expedite development of the biotech’s pipeline, the analysts said.

ImmunoGen’s clinical assets include IMGN-151, an anti-FRα follow-on to Elahere with the potential to move beyond ovarian cancer. The biotech also has an anti-CD123 ADC in phase 2 testing for a rare blood cancer called blastic plasmacytoid dendritic cell neoplasm.

Within oncology, blood cancer is AbbVie’s home turf. Together with Johnson & Johnson, AbbVie sells the BTK inhibitor Imbruvica, which has lately come under pressure from competitor drugs from AstraZeneca and BeiGene.

Besides Teliso-V, AbbVie’s internal ADC pipeline remains in early-stage development. It includes a c-Met follow-up coded ABBV-400, two anti-SEZ6 candidates, ABBV-011 and ABBV-706, as well as drugs targeting B7-H3, CD19 and LRRC15.

During AbbVie’s third-quarter earnings call, CEO Rich Gonzalez said the company opted to prioritize internal ADC work instead of pursuing a transaction with Daiichi Sankyo, which counts AZ and Merck as partners. That comment came in response to a question about Daiichi and Merck's megablockbuster ADC deal from the prior week.

“The reality is we believe we have what we need with [ABBV-400],” Gonzalez said. “We believe that platform—and we own that platform, we've developed it internally—would give us everything that we need in that area,” Gonzalez added. 

AbbVie expects the ImmunoGen deal to close in the middle of 2024. 

Meanwhile, the U.S. Federal Trade Commission has recently adopted a more aggressive stance on biopharma M&A deals. The antitrust agency is currently taking a closer look at Pfizer’s Seagen buy. The ImmunoGen deal “would have no overlap from an FTC standpoint, based on our portfolio and our market presence,” Gonzalez said Thursday.