AbbVie to acquire Cerevel Therapeutics in $8.7bn deal

February 2024 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

February 2024 Issue

US drug manufacturer AbbVie has agreed to acquire Cerevel Therapeutics in an $8.7bn deal which will bolster the company’s neuroscience pipeline.

Under the terms of the deal, the company will pay around $45 per share for Cerevel – a 73 percent premium over Ceverel’s closing share price on 1 December, the day before rumours began to emerge about a potential sale of the company.

The boards of directors of both AbbVie and Cerevel have approved the transaction and expect the deal to close around the middle of 2024, pending shareholder and regulatory approvals, and other customary closing conditions.

Cerevel’s product pipeline includes multiple clinical-stage and preclinical candidates with potential across several diseases, including schizophrenia, Parkinson’s disease and mood disorders. AbbVie believes the acquisition will complement its existing neuroscience portfolio, adding a range of assets with potential across psychiatric and neurological disorders with unmet need. Cerevel’s experimental drug emraclidine is currently undergoing phase 2 clinical trials for schizophrenia. The data collected from these trials could be crucial for seeking regulatory approval.

Cerevel’s pipeline is expected to help AbbVie replace lost revenue as its arthritis drug Humira faces a raft of new competition. Revenue from Humira, once the top-selling drug in the world, is expected to fall quickly following market entry of over half a dozen biosimilar versions this year in the US. It has already faced competition in Europe. As a result, sales of Humira, which were above $21bn in 2022, are expected to drop below $9bn in 2024. Sales of AbbVie’s blockbuster leukaemia drug Imbruvica dropped 20 percent in the third quarter of 2023 due to competition from BeiGene’s Brukinsa and AstraZeneca’s Calquence.

“Our existing neuroscience portfolio and our combined pipeline with Cerevel represents a significant growth opportunity well into the next decade,” said Richard A. Gonzalez, chairman and chief executive of AbbVie. “AbbVie will leverage its deep commercial capabilities, international infrastructure, and regulatory and clinical expertise to deliver substantial shareholder value with multibillion-dollar sales potential across Cerevel’s portfolio of assets.”

“Cerevel has always been committed to transforming what is possible in neuroscience,” said Ron Renaud, president and chief executive of Cerevel. “With AbbVie’s long-standing expertise in developing and commercializing medicines on a global scale, Cerevel’s novel therapies will be well positioned to reach more people living with neuroscience diseases. The talented, passionate, and dedicated Cerevel team has made great progress over the past five years in developing our innovative suite of potential medicines, and we are pleased that AbbVie has recognized the tremendous potential of our pipeline. This acquisition reinforces the renaissance we are seeing in neuroscience, and we are proud to be at the forefront.”

The transaction is AbbVie’s second multibillion-dollar acquisition in a week, following its purchase of Immunogen and its ovarian cancer treatment for $10bn. It is AbbVie’s third notable acquisition in the final quarter of 2023; in October, the company acquired Mitokinin, a discovery-stage neuroscience company that is developing a selective PINK1 activator designed to address mitochondrial dysfunction, which is believed to be a major contributing factor to Parkinson’s disease pathogenesis and progression. Under the terms of the Mitokinin deal, AbbVie will pay shareholders $110m at closing for the purchase, though the deal could grow by another $545m depending on hitting certain developmental and commercial milestones, as well as potential tiered royalty payments.

On 30 November, AbbVie also agreed a $10.1bn deal to acquire ImmunoGen and its antibody-drug conjugate ELAHERE, which received accelerated approval from the US Food and Drug Administration in 2022 to treat platinum-resistant ovarian cancer.

Cerevel was formed in 2018 when Pfizer carved out its division developing drugs for the central nervous system into a standalone company backed by a $350m investment from Bain. The company was listed on the New York stock market in 2020. Bain and Pfizer hold stakes of around 36 percent and 15 percent, respectively.

Richard Summerfield