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AbbVie (ABBV) to Buy Landos to Strengthen Autoimmune Portfolio
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AbbVie(ABBV - Free Report) announced a definitive agreement to acquire Landos Biopharma (LABP - Free Report) , which makes novel, oral medicines for treating autoimmune diseases.
The acquisition, if successfully closed, will add Landos’ lead pipeline candidate, NX-13, which is a first-in-class, oral NLRX1 agonist in phase II development for the treatment of ulcerative colitis (UC). The deal will strengthen AbbVie’s inflammatory and autoimmune disease portfolio, which includes successful drugs, Skyrizi and Rinvoq. Both drugs are performing extremely well, bolstered by approvals in new indications. These should support top-line growth in the next few years. The drugs have the potential to replace revenues lost from blockbuster drug Humira, which started facing generic erosion in the United States in early 2023.
AbbVie will acquire Landos at a price of $20.42 per share in cash. It represents a premium of 160.1% of Landos’ Monday’s closing price of $7.83 per share. This adds up to a total purchase consideration of approximately $137.5 million. In addition, Landos will also be entitled to one non-tradable contingent value right per share with a value of up to $11.14 per share, or approximately an additional $75 million in the aggregate, subject to the achievement of a clinical development milestone. The transaction is expected to close in the second quarter of 2024.
In recent years, there has been a surge in the prevalence of inflammatory bowel disease (IBD) indications, Crohn’s disease (CD) and UC due to genetic factors, environmental factors and lifestyle changes. In addition, immune system irregularities, higher diagnosis rates, increased focus on early diagnosis and favorable reimbursement policies in developed countries are driving demand for IBD treatments.
Several big drugmakers have products to treat UC and CD and are also developing new medicines with novel mechanisms of action to help patients achieve long-term clinical remission. NX-13 is an oral NLRX1 agonist with a bimodal mechanism of action (MOA), which is anti-inflammatory and facilitates epithelial repair. Thus, NX-13, with its novel bimodal MOA, has the potential to treat UC and Crohn's disease with a new approach.
Some other companies have also acquired smaller biotech making IBD candidates with improved clinical profiles in the past two to three years.
For example, in June 2023, Merck (MRK - Free Report) acquired small biotech Prometheus Biosciences, which added tulisokibart/MK-7240 to its pipeline. MK-7240, a novel TL1A inhibitor, is being developed for the treatment of immune-mediated diseases, including UC, CD and other autoimmune conditions.
In the past year, AbbVie’s stock has risen 13.3% compared with an increase of 26.9% for the industry.
Image Source: Zacks Investment Research
This is AbbVie’s third acquisition announcement in less than six months. In December 2023, AbbVie announced a definitive agreement to acquire neuroscience drugmaker Cerevel Therapeutics (CERE - Free Report) for $8.7 billion. The acquisition will strengthen AbbVie’s neuroscience pipeline by adding CERE’s novel pipeline candidates being studied across a range of psychiatric and neurological disorders, including schizophrenia, Parkinson's disease and mood disorders.
In February 2024, AbbVie announced the completion of its previously announced acquisition of cancer biotech ImmunoGen, which added the latter’s antibody-drug conjugate for ovarian cancer, Elahere, to AbbVie’s oncology portfolio.
Image: Bigstock
AbbVie (ABBV) to Buy Landos to Strengthen Autoimmune Portfolio
AbbVie (ABBV - Free Report) announced a definitive agreement to acquire Landos Biopharma (LABP - Free Report) , which makes novel, oral medicines for treating autoimmune diseases.
The acquisition, if successfully closed, will add Landos’ lead pipeline candidate, NX-13, which is a first-in-class, oral NLRX1 agonist in phase II development for the treatment of ulcerative colitis (UC). The deal will strengthen AbbVie’s inflammatory and autoimmune disease portfolio, which includes successful drugs, Skyrizi and Rinvoq. Both drugs are performing extremely well, bolstered by approvals in new indications. These should support top-line growth in the next few years. The drugs have the potential to replace revenues lost from blockbuster drug Humira, which started facing generic erosion in the United States in early 2023.
AbbVie will acquire Landos at a price of $20.42 per share in cash. It represents a premium of 160.1% of Landos’ Monday’s closing price of $7.83 per share. This adds up to a total purchase consideration of approximately $137.5 million. In addition, Landos will also be entitled to one non-tradable contingent value right per share with a value of up to $11.14 per share, or approximately an additional $75 million in the aggregate, subject to the achievement of a clinical development milestone. The transaction is expected to close in the second quarter of 2024.
In recent years, there has been a surge in the prevalence of inflammatory bowel disease (IBD) indications, Crohn’s disease (CD) and UC due to genetic factors, environmental factors and lifestyle changes. In addition, immune system irregularities, higher diagnosis rates, increased focus on early diagnosis and favorable reimbursement policies in developed countries are driving demand for IBD treatments.
Several big drugmakers have products to treat UC and CD and are also developing new medicines with novel mechanisms of action to help patients achieve long-term clinical remission. NX-13 is an oral NLRX1 agonist with a bimodal mechanism of action (MOA), which is anti-inflammatory and facilitates epithelial repair. Thus, NX-13, with its novel bimodal MOA, has the potential to treat UC and Crohn's disease with a new approach.
Some other companies have also acquired smaller biotech making IBD candidates with improved clinical profiles in the past two to three years.
For example, in June 2023, Merck (MRK - Free Report) acquired small biotech Prometheus Biosciences, which added tulisokibart/MK-7240 to its pipeline. MK-7240, a novel TL1A inhibitor, is being developed for the treatment of immune-mediated diseases, including UC, CD and other autoimmune conditions.
In the past year, AbbVie’s stock has risen 13.3% compared with an increase of 26.9% for the industry.
Image Source: Zacks Investment Research
This is AbbVie’s third acquisition announcement in less than six months. In December 2023, AbbVie announced a definitive agreement to acquire neuroscience drugmaker Cerevel Therapeutics (CERE - Free Report) for $8.7 billion. The acquisition will strengthen AbbVie’s neuroscience pipeline by adding CERE’s novel pipeline candidates being studied across a range of psychiatric and neurological disorders, including schizophrenia, Parkinson's disease and mood disorders.
In February 2024, AbbVie announced the completion of its previously announced acquisition of cancer biotech ImmunoGen, which added the latter’s antibody-drug conjugate for ovarian cancer, Elahere, to AbbVie’s oncology portfolio.
Zacks Rank
AbbVie currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AbbVie Inc. Price and Consensus
AbbVie Inc. price-consensus-chart | AbbVie Inc. Quote