AbbVie is restocking its drug pipeline in a big way, announcing Wednesday an $8.7 billion deal to buy neuroscience-focused Cerevel Therapeutics, just days after agreeing to a similar sized acquisition of the cancer biotechnology company ImmunoGen.
Per the deal, AbbVie will pay $45 per share of Cerevel, which is developing medicines for schizophrenia, dementia and Parkinson’s disease. The buyout price is 22% higher than Cerevel stock’s closing price Wednesday and 73% above what shares closed at Friday, before rumors of a pending deal emerged.
Both companies’ boards of directors have agreed to the acquisition, which they expect will close sometime around the middle of next year.
The deal is the largest for a brain drug developer since Pfizer’s $11.6 billion takeover of Biohaven Pharmaceuticals, and a sign of renewed interest from large pharmaceutical companies in neuroscience.
“This acquisition reinforces the renaissance we are seeing in neuroscience, and we are proud to be at the forefront,” said Ron Renaud, the former CEO of Translate Bio who was hired to run Cerevel this summer.
Based in Cambridge, Massachusetts, Cerevel was built around a portfolio of psychiatric medicines spun out of Pfizer five years ago. It later went public through a blank check merger that raised $445 million in 2020. Should the deal with AbbVie close, Cerevel will be the third drug company that Renaud has sold.
For AbbVie, acquiring Cerevel would add five clinical-stage drugs to its pipeline. The drugs target a diverse group of illnesses, from epilepsy to major depressive disorder to dementia-related apathy.
"Our existing neuroscience portfolio and our combined pipeline with Cerevel represents a significant growth opportunity well into the next decade," AbbVie CEO Richard Gonzalez said in a statement, adding that AbbVie sees multibillion dollar sales potential across Cerevel’s portfolio.
Cerevel's most advanced drug, known scientifically as tavapadon, is in late-stage testing as a potential treatment for Parkinson's disease. But the company is also developing an experimental therapy for schizophrenia that investors have been watching closely.
That therapy, called emraclidine, doesn't work like currently available schizophrenia medicines, which regulate the mood-regulating chemicals dopamine and serotonin. Rather, it stimulates a protein that helps control the release of acetylcholine — a neurotransmitter involved with a variety of important processes for brain function. Wall Street analysts see a multibillion-dollar market opportunity for drugs that affect these "muscarinic receptor" proteins.
The Boston-based drugmaker Karuna Therapeutics has a drug that's similar to Cerevel's but farther along in development. Karuna's "KarXT" has succeeded in three mid- to late-stage clinical trials, and the company now expects to launch the drug in the back half of next year, pending an approval.
Cerevel has been evaluating emraclidine in a pair of Phase 2 trials dubbed the "Empower" studies. In August, the company said that data from those trials will come later than expected, in the second half of 2024, due to slower enrollment in the U.S. and delays in the startup of some international clinical sites. Cerevel's programs targeting epilepsy, Parkinson’s disease and dementia-related apathy have also experienced delays.
AbbVie’s decision to acquire Cerevel now, rather than after the data are known, is a “bold” move, Stifel analyst Paul Matteis wrote in a Wednesday note to clients. But, he added, it avoids a possible bidding war should that data match or exceed expectations.
“This is also a big milestone for [central nervous system companies] — we’ve been waiting for this kind of M&A,” Matteis wrote.
Editor’s note: This story has been updated with additional detail and commentary.