AbbVie to Acquire Cerevel Therapeutics for $8.7 Bn to Boost Neurological Drug Portfolio

Trading in options for Cerevel experienced an unusual surge in the days leading up to the announcement, with significant interest in upside call options.

In a strategic move to offset declining revenues from its arthritis drug Humira, pharmaceutical giant AbbVie has confirmed its intention to acquire Cerevel Therapeutics for approximately $8.7 billion.

This follows closely on the heels of AbbVie's recent $10.1 billion deal to acquire cancer drug developer ImmunoGen, signalling the company's commitment to investing in innovative medicines.

AbbVie is set to pay $45 per share in cash for Cerevel, a company at the forefront of developing drugs targeting neurological conditions such as Alzheimer's, Parkinson's, psychosis, epilepsy, and panic disorder.

Trading in options for Cerevel experienced an unusual surge in the days leading up to the announcement, with significant interest in upside call options.

The move comes as AbbVie seeks to diversify its portfolio, particularly with the impending market entry of several biosimilar versions of Humira in the US, causing a projected significant drop in revenue. Humira, once the world's top-selling drug with sales surpassing $21 billion in 2022, is anticipated to generate less than $9 billion next year.

Cerevel, based in Cambridge, Massachusetts, originated in 2018 when Pfizer spun off its central nervous system drug development division into an independent company.

The venture received a substantial $350 million investment from Bain, and in 2020, Cerevel became publicly listed on the New York Stock Exchange. Current major stakeholders include Bain, with a 36% stake and Pfizer, with a 15% stake.

As news of the acquisition broke, Cerevel shares surged by 15.5%, while AbbVie's shares remained flat during extended trading. The deal underscores AbbVie's strategic commitment to addressing evolving market dynamics and maintaining its position as a key player in the pharmaceutical industry.

The transaction is subject to regulatory approval and is expected to close in the coming months. Both companies express optimism about the synergies this partnership will bring to advance neurological drug development and address unmet medical needs.

In a similar development, just days back, Swiss pharmaceutical giant Roche acquired Carmot Therapeutics, a California-based anti-obesity drug developer, in a close to $3.1 billion deal. This move signifies Roche's entry into the rapidly growing market for weight loss treatments.

In October, US pharmaceutical giant Bristol Myers Squibb acquired Mirati Therapeutics, a clinical-stage biotechnology company focused on targeted oncology treatments, for $4.8 billion.

The deal, anticipated to conclude in the first quarter of 2022 following regulatory approvals and standard closing conditions, marks a strategic move by Bristol Myers Squibb to bolster its oncology portfolio and solidify its standing in the swiftly evolving realm of precision medicine.