AbbVie's two biggest drugs are losing steam, and the pipeline behind them looks thin. The fix: pay nearly $11 billion - and a 60% premium - for a biotech with one very promising drug.
The Deal
AbbVie is close to an all-cash agreement to buy Apogee Therapeutics, with an announcement possibly coming as soon as Monday, according to a Financial Times report.
The price values Apogee at roughly 60% above its Thursday close of $90.38, with no market reaction yet since US markets were shut Friday for Juneteenth.
At nearly $11 billion, it would be AbbVie's biggest acquisition since the company bought Allergan for $63 billion about six years ago.
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Why AbbVie Wants Apogee
AbbVie built its name on anti-inflammatory drugs like Humira, which treats autoimmune disorders, and Skyrizi, which treats psoriasis.
Both have been huge sellers - Humira was the world's best-selling drug at its peak - but it lost US patent protection in 2023, and cheaper biosimilar competition is eating into sales.
Mizuho analyst Jared Holz said the investment case for AbbVie has shifted toward outside deals, citing the tapering growth at Skyrizi and Rinvoq plus what he called a "sparse near-term pipeline."
That's where Apogee comes in. Its lead drug, zumilokibart, targets atopic dermatitis - a skin condition that causes chronic itching and inflammation.
The drug hits a different target than Sanofi's blockbuster Dupixent and stays in the body longer, meaning fewer injections for patients.
TD Cowen analyst Tyler Van Buren wrote earlier this year that the drug "appears numerically superior" to Dupixent.
Since Dupixent is a multi-billion-dollar franchise, even a small share of that market is worth fighting for.
The Pharma Buying Spree
This deal fits a broader pattern. AbbVie itself closed on Cerevel and ImmunoGen in 2024 in deals worth nearly $19 billion combined.
GSK has been on a similar tear, agreeing earlier this month to buy lung-cancer biotech Nuvalent for $10.6 billion.
Blackstone also bet early on Apogee, cutting the biotech a $1.3 billion financing check in May in exchange for royalties on future zumilokibart sales.
Big pharma has a shared problem: their best-selling drugs are aging, generic competition is coming, and in-house pipelines aren't filling the gap.
Buying biotechs with late-stage drugs is the shortcut - paying a premium today instead of spending another decade in the lab.
"We have zero doubt that this will be a record year for biotech M&A," Holz said.
What To Watch
Apogee shares were already up 115% in the 12 months through Thursday, and the 60% premium on top suggests AbbVie sees real upside in zumilokibart.
The next few rounds of trial data will show whether the drug can actually take share from Dupixent and justify the $11 billion price tag.
For AbbVie, the bet is that paying up now beats waiting another decade for an in-house win.
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