April 28, 2016
Pharmaceutical company AbbVie Inc. has agreed to acquire Stemcentrx Inc., a cancer-drug developer, for $5.8 billion. This is part of AbbVie’s continuing aggressive push for building an oncology business.
AbbVie gains Stemcentrx’s experimental treatment for a form of lung cancer, plus other experimental drugs. It also involves cash-and-stock acquisition, which includes potential additional payments of up to $4 billion if certain drug-development goals are hit,
According to AbbVie, the lung-cancer treatment, dubbed Rova-T, has sales potential of multi-billion-dollars. This is based on clinical trials which showed that Rova-T shrank lung tumors in a significant portion of patients receiving it. It would also expand AbbVie’s cancer-drug lineup beyond those for blood cancers, to include treatments for tumors in solid organs.
AbbVie Chief Executive Richard Gonzalez said: “We’re impressed with this. We think Rova-T is a very good asset and gives us a strong position on solid tumors going forward.”
In an attempt to reduce its heavy dependence on the anti-inflammatory drug Humira, AbbVie has reached this agreement, which is the latest in a series of deals the company has struck. This is important for a company which will face potential competition from copycat drugs in coming years. AbbVie hopes the drug could reach the market in 2018 if it is approved by regulators.
As said by J.P. Morgan analyst Chris Schott, the deal “brings the company an interesting late-stage asset in small-cell lung cancer with the potential for much broader usage over time.”