AbbVie forges deeper into cancer, as clock ticks for Humira
By Ransdell Pierson
(Reuters) - AbbVie Inc placed another big bet on new cancer drugs on Thursday with a $5.8 billion acquisition that could lessen its dependence on arthritis treatment Humira, the world's top selling drug.
Shares of AbbVie rose 1.3 percent in afternoon trading.
The suburban Chicago drugmaker said it would buy privately held Stemcentrx and its experimental treatment for small cell lung cancer, which accounts for about 10 percent to 15 percent of all lung cancers and is notoriously difficult to treat.
It brings AbbVie into the broad and lucrative arena of solid tumors, such as lung cancer, breast cancer and colon cancer. AbbVie's current drugs, including leukemia treatment Imbruvica, focus on blood cancers, a smaller group of patients.
Companies with innovative cancer drugs, especially ones that spur the immune system to attack tumors, are attractive takeover targets. These life-extending new treatments can command extremely high prices that health insurers seem willing to pay for, unlike some other therapeutic categories where they are putting pressure on price.
"The mantra to reimbursement is innovation, and AbbVie is heading down the right path" by its widening focus on oncology, said John Boris, an analyst with Suntrust Robinson Humphrey.
AbbVie last year bought Pharmacyclics Inc and its half-ownership of Imbruvica for $21 billion. It sells the drug with Johnson & Johnson.
U.S. rival Bristol-Myers Squibb has been particularly successful with its oncology focus. It predicted on Thursday its earnings will jump as much as 29 percent this year, fueled by its new Opdivo treatment for melanoma and lung cancer. A similar new drug from Merck & Co also has a list price of $150,000. Continued...