After only four deals announced in 2014 and 2015, AbbVie (NYSE: ABBV) gained momentum in the M&A space this year in an effort to expand and diversify its portfolio. The timing isn’t a coincidence, since it faces the looming expiration of Humira’s patent in December. The drug that accounted for 63% of AbbVie’s 2014 sales could lose its dominant position in the autoimmune disease market as competitive generics take the field.
In the first four months of 2016, AbbVie has dished out $6.4 billion on three deals (two collaborations and one acquisition).
On March 7th, the company announced a collaboration with Boehringer Ingelheim that added anti-IL-23 to its immunology pipeline. The collaboration, with an upfront payment of $595 million, positioned the anti-IL-23 as AbbVie’s lead investigational psoriasis compound, currently in Phase 3 trials.
A second collaboration was announced on April 21st with CytomX (NASDAQ: CTMX), which added two Probody™ drug conjugates to its oncology pipeline. CytomX received $30 million upfront. A week later, AbbVie paid a $5.8 billion upfront payment to acquire privately held Stemcentrx, Inc. and its Rova-T compound for small cell lung cancer. Rova-T could generate a multi-billion dollar peak revenue opportunity with commercialization slated for 2018. It’s currently in registrational trials. StemCentrx could receive up to an additional $4 billion in milestone payments.
Immunotherapy has become a popular target for biotech companies looking to ride the lucrative new wave of cancer treatment. Rova-T may be the source of momentum that AbbVie needs to pick up where Humira could leave off.