AbbVie to acquire drug developer Cerevel for $8.7 billion By Reuters

© Reuters. FILE PHOTO: A sign stands outside an Abbvie facility in Cambridge, Massachusetts, USA, May 20, 2021. REUTERS/Brian Snyder/file photo

(Reuters) – AbbVie (NYSE:) said on Wednesday it will buy Cerevel Therapeutics, a developer of neurological disease treatments, for about $8.7 billion to replace profits as its arthritis drug Humira faces new competition.

This is the second largest deal in the past week, coming just days after AbbVie agreed to acquire the cancer drug developer. Immunogen (NASDAQ:) for $10.1 billion in cash, underscoring its commitment to making significant investments in promising new drugs.

It is paying $45 per share in cash for Cerevel, which is developing treatments for Alzheimer’s disease, Parkinson’s disease, psychosis, epilepsy and panic disorder. The company’s experimental drug, emraclidine, is undergoing mid-stage trials as a treatment for schizophrenia, providing data that the company hopes can be used to seek regulatory approval.

The deal represents a 73% premium to Ceverel’s closing price on December 1, before rumors of a possible sale of the company spread among traders. The stock has risen 42% since Reuters reported on Wednesday afternoon that AbbVie was close to a deal to acquire the company for $45 a share.

Cerevel’s options trading experienced an unusual surge with its stock price the day before the deal was announced on Wednesday, with bullish call options attracting a lot of attention.

Sales of Humira, once the world’s best-selling drug, are expected to decline sharply after more than a half-dozen biosimilar versions entered the market in the United States this year. In Europe, we already face competition.

Humira sales, which exceeded $21 billion in 2022, are expected to fall below $9 billion next year.

Meanwhile, third-quarter sales of AbbVie’s blockbuster leukemia treatment Imbruvica fell 20% due to competition. Basic Brukinsa from (NASDAQ:) and Calquence from AstraZeneca (NASDAQ:).

Imbruvica is one of 10 drugs for which the U.S. Medicare health plan is initially negotiating prices, and the new prices are expected to go into effect in 2026.

Cerevel, based in Cambridge, Massachusetts, launched in 2018. Pfizer (NYSE:) spun off its division developing central nervous system drugs into an independent company with a $350 million investment from Bain.

Cerevel was listed on the New York Stock Exchange in 2020. Bain and Pfizer hold about 36% and 15% stakes, respectively.

Cerevel shares rose 15.5%, while AbbVie shares were flat in extended trading.