AbbVie Acquires Aliada for $1.4 Billion Amid Uncertain Alzheimer’s Treatment, Stock Up 1%

AbbVie has announced its decision to acquire Aliada Therapeutics for $1.4 billion in cash, focusing on an experimental Alzheimer's treatment still in the early stages of development. This acquisition places AbbVie, a company with a market capitalization of approximately $330 billion, in competition with at least three other pharmaceutical firms that were also interested in Aliada, according to sources familiar with the matter. Following the announcement, shares of AbbVie saw a 1% increase by the close of trading on Monday.

The competitive bidding for Aliada's Alzheimer's drug candidate has elevated the deal's price. Insiders suggest that despite the historical regulatory challenges associated with treatments for Alzheimer's disease, numerous pharmaceutical companies are still willing to invest in the early stages of such treatments. Recently, two similar therapies that target amyloid plaques in the brain have been approved in the United States after many years of unsuccessful attempts.

AbbVie is actively working to expand its range of neuroscience products, especially as sales of its leading arthritis drug Humira have dropped by 33%. Humira, which once held the title of the world's best-selling drug, is now facing competition from various cheaper biosimilars. To reinforce its pipeline, AbbVie has already acquired neuroscience drug developer Cerevel Therapeutics and cancer drug developer ImmunoGen earlier this year, with these deals totaling approximately $19 billion.

AbbVie believes Aliada's antibody therapy, ALIA-1758, has the potential to be a leading treatment in its category. ALIA-1758 employs a protein called transferrin to transport an antibody that degrades and eliminates amyloid plaques, which are sticky protein deposits in the brain associated with Alzheimer's disease. According to Michael Ryan, Aliada's medical director, many promising therapies targeting the central nervous system fail to progress to late-stage trials because they cannot cross the blood-brain barrier. Aliada's drug delivery platform directly addresses this issue, effectively delivering targeted drugs and potentially transforming the treatment of neurological diseases.

With the recent approval of amyloid plaque-targeting drugs by Biogen and Eisai (Leqembi) and Lilly (Kisunla), these plaques are now confirmed as a valid therapeutic target, according to BMO analyst Evan Seigerman. However, Alzheimer's disease remains a high-risk area for drug development. The Centers for Disease Control and Prevention (CDC) projects that the number of people with Alzheimer's disease will nearly double from 6.9 million in 2020 to nearly 14 million by 2060. AbbVie anticipates that the acquisition will be finalized by the end of this year.

In terms of financial performance, AbbVie's neuroscience therapies, which include Botox and the bipolar disorder drug Vraylar, generated $4.13 billion in sales during the first half of 2024, marking a 15.3% increase compared to the same period the previous year.