AbbVie placed another bet on new cancer drugs on Thursday with a $5.8 billion deal, as it seeks new sources of revenue ahead of patent expirations on its flagship $14 billion-a-year Humira arthritis drug.
Shares of AbbVie fell 7.3 percent immediately after it announced the deal but pared losses to trade down only 1.7 percent at $59.64 later on Thursday morning. The company lowered its 2016 earnings forecast due to the deal's expected dilutive impact this year and for several years to come.
The suburban Chicago drugmaker said it would buy privately held Stemcentrx and its experimental lead treatment for small cell lung cancer, which accounts for about 10-15 percent of all lung cancers and is notoriously difficult to treat.
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.