AbbVie, Inc. (ABBV - Free Report) announced an oncology collaboration deal with Genmab for an upfront payment of $750 million. Under the collaboration, the companies will jointly develop and market three of Genmab’s early-stage investigational bispecific antibody product candidates including epcoritamab, which is currently being evaluated in a phase I/II study for multiple hematological B cell malignancies. AbbVie and Genmab will share commercial responsibilities for epcoritamab in the United States and Japan while AbbVie will be responsible for other regions. For the other two candidates, DuoHexaBody-CD37 and DuoBody-CD3x5T4, the companies will share responsibilities for development and commercialization in the United States and Japan, while in other regions, Genmab will have a right to co-commercialize these products
The companies also formed a discovery research deal to combine proprietary antibodies and technology from both companies to create upto four additional differentiated antibody therapeutics for cancer. For this partnership, Genmab will take care of phase I studies while AbbVie has opt-in rights under the program.
In addition to the upfront payment, Genmab will be entitled to receive potential milestone payments of up to $3.15 billion from AbbVie.
This year so far, AbbVie’s shares have risen 9.4% against the industry’s 1.1% decline.
In a separate press release, AbbVie announced data from a phase IIa study on ABBV-3373, its novel antibody drug conjugate (ADC) to treat adult patients with moderate-to-severe rheumatoid arthritis. The novel ADC comprises an anti-tumor necrosis factor (TNF) and a proprietary Glucocorticoid Receptor Modulator. The data demonstrated clinical activity of TNF-ADC platform and supports its advancement for development in RA indication as well as initiating studies for other immunology indications. Also, in the study, the safety profile of ABBV-3373 was generally similar to AbbVie’s blockbuster drug, Humira (adalimumab).
AbbVie is looking for ways to diversify its revenue stream beyond Humira. Humira generics are already denting revenues in Europe and are expected to be launched in the United States in 2023. AbbVie is heavily dependent on Humira and is looking to diversify its portfolio.Its two new drugs Skyrizi and Rinvoq have demonstrated differentiated clinical profiles versus Humira and are expected to lower AbbVie’s dependence on Humira. The new type of ADC, ABBV-3373, if successfully developed, can help AbbVie in this goal.
AbbVie has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked large pharma stocks include Lilly (LLY - Free Report) , Bristol-Myers (BMY - Free Report) and AstraZeneca (AZN - Free Report) . While Lilly has the same rank as AbbVie, AstraZeneca and Bristol-Myers have a Zacks Rank #2 (Buy).
Lilly’s stock is up 14.9% this year so far. Its earnings estimate for 2020 has risen 0.6% while that for 2021 has increased 1% over the past 60 days.
AstraZeneca’s shares are up 7.6% this year so far. Its earnings estimates for 2020 and 2021 have risen by 0.5% and 0.8%, respectively over the past 60 days.
Bristol-Myers’ earnings estimates for 2020 as well as 2021 have gone up by 0.6% over the past 60 days.
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