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AbbVie (ABBV) Buys Global Rights to Novel IBD Candidate

AbbVie ABBV announced that it is in-licensing exclusive global rights to develop and commercialize FG-M701, a next-generation TL1A antibody for the treatment of inflammatory bowel disease (IBD), from the Chinese biotech FutureGen Biopharmaceutical.

IBD includes two conditions, Crohn's disease (CD) and ulcerative colitis (UC), both characterized by chronic inflammation in the gastrointestinal tract. FG-M701, a novel TL1A inhibitor, is in pre-clinical development. It has been developed by FutureGen leveraging its Structure-based Targeted Evolution Platform technology platform. These next-generation IBD therapies are developed to drive greater efficacy and less frequent dosing than the first-generation TL1A antibodies. TL1A is a clinically validated target in IBD treatment.

For the deal, AbbVie will pay $150 million in upfront and near-term milestone payments to FutureGen, with the latter also being entitled to an additional $1.56 billion in potential milestone payments plus tiered royalties on net sales if the product is ultimately approved.

The deal will strengthen AbbVie’s inflammatory and autoimmune disease portfolio, which includes successful drugs, Skyrizi and Rinvoq.  Both drugs are performing extremely well, bolstered by approvals in new indications. The drugs have the potential to replace revenues lost from blockbuster drug Humira, which started facing generic erosion in the United States in early 2023.

This year so far, AbbVie’s stock has risen 7.5% compared with a rise of 20.1% for the industry.

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Zacks Investment Research


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In recent years, there has been a surge in the prevalence of IBD indications, CD and UC due to genetic factors, environmental factors and lifestyle changes. In addition, immune system irregularities, higher diagnosis rates, increased focus on early diagnosis and favorable reimbursement policies in developed countries are driving demand for IBD treatments.

Several big drugmakers have products to treat UC and CD and are also developing new medicines with novel mechanisms of action to help patients achieve long-term clinical remission.

Large drugmakers are acquiring smaller biotechs, making IBD candidates with improved clinical profiles.

For example, in May, AbbVie closed its previously announced acquisition of Landos Biopharma, which makes novel, oral medicines for treating autoimmune diseases. The acquisition adds Landos’ lead pipeline candidate, NX-13, which is a first-in-class, oral NLRX1 agonist in phase II development for the treatment of UC.

In June 2023, Merck MRK acquired the small biotech Prometheus Biosciences, which added tulisokibart/MK-7240 to its pipeline. Merck is developing MK-7240, a novel TL1A inhibitor, for the treatment of UC, CD and other autoimmune conditions.

In October 2023, Sanofi SNY in-licensed rights to jointly develop and commercialize Teva Pharmaceutical’s TEVA IBD candidate, TEV’574, also an anti-TL1A therapy. Teva has partnered with Sanofi for its anti-TL1A candidate to maximize the value of the asset. TEV’574 is presently being evaluated in a phase IIb study for UC and CD.

Zacks Rank

AbbVie currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AbbVie Inc. Price and Consensus

AbbVie Inc. Price and Consensus
AbbVie Inc. Price and Consensus

AbbVie Inc. price-consensus-chart | AbbVie Inc. Quote

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