AbbVie is in the final stage of talks to buy cancer drug company Revolution Medicines. The talks are focused on an acquisition, meaning AbbVie wants to fully buy Revolution Medicines. News of the possible deal pushed Revolution Medicines’ stock sharply higher. Revolution Medicines shares jumped by $23.05 in one day.
This rise equals a strong 29% increase in the stock price, as reported by GuruFocus. After the jump, Revolution Medicines shares were trading at $102.90. Investors reacted positively because they believe the deal could benefit Revolution Medicines. The stock rise shows strong market confidence in the acquisition talks.
AbbVie is trying to expand more deeply into cancer treatment drugs. The possible deal fits AbbVie’s long-term plan to grow its oncology business. AbbVie believes Revolution Medicines can strengthen its drug development pipeline. The acquisition could improve AbbVie’s position in the competitive drug industry. AbbVie is a major healthcare company that makes prescription medicines.
The company was spun off from Abbott Laboratories in 2013. AbbVie is well known for immunology and cancer drugs, as stated by GuruFocus. Its top medicines include Humira, Skyrizi, and Rinvoq. In 2020, AbbVie bought Allergan to expand its business. The Allergan deal added products like Botox to AbbVie’s portfolio. AbbVie has also been buying companies in neuroscience and oncology in recent years. AbbVie’s total market value is about $416.34 billion.
Its quick ratio is 0.6, showing possible short-term cash pressure. AbbVie’s debt-to-equity ratio is -26.02, pointing to heavy leverage. The company has a Piotroski F-Score of 7, which signals good financial health, as per the report by GuruFocus. AbbVie’s Beneish M-Score is -2.71, suggesting low risk of accounting manipulation.
The average analyst target price is $245.56. The analyst recommendation score is 2.1. AbbVie’s RSI is 45.45, showing the stock is not overbought or oversold. The 20-day moving average is $226.14. The 50-day moving average is $226.40. The 200-day moving average is $206.24. These averages suggest stable trading behavior. Institutional investors own 75.19% of AbbVie shares.
AbbVie is in advanced talks to buy Revolution Medicines. The Wall Street Journal cited people familiar with the matter. Revolution Medicines shares rose nearly 30% after the report. AbbVie shares were up more than 5% following the news. AbbVie has spent over $20 billion on acquisitions since 2023.
These deals aim to replace lost revenue from Humira, as stated by Reuters. Humira lost patent protection, hurting AbbVie’s sales. A deal could be finalized soon if talks do not face last-minute issues. No official deal value has been announced yet. Revolution Medicines has a market value of over $15.4 billion. With a normal takeover premium, the deal could be worth $20 billion or more.
Because reports said AbbVie is in advanced talks to buy the cancer drug company, which excited investors.
Q2. Why does AbbVie want to buy Revolution Medicines?
AbbVie wants to grow its cancer drug business as older medicines like Humira lose patent protection.
This rise equals a strong 29% increase in the stock price, as reported by GuruFocus. After the jump, Revolution Medicines shares were trading at $102.90. Investors reacted positively because they believe the deal could benefit Revolution Medicines. The stock rise shows strong market confidence in the acquisition talks.
AbbVie is trying to expand more deeply into cancer treatment drugs. The possible deal fits AbbVie’s long-term plan to grow its oncology business. AbbVie believes Revolution Medicines can strengthen its drug development pipeline. The acquisition could improve AbbVie’s position in the competitive drug industry. AbbVie is a major healthcare company that makes prescription medicines.
The company was spun off from Abbott Laboratories in 2013. AbbVie is well known for immunology and cancer drugs, as stated by GuruFocus. Its top medicines include Humira, Skyrizi, and Rinvoq. In 2020, AbbVie bought Allergan to expand its business. The Allergan deal added products like Botox to AbbVie’s portfolio. AbbVie has also been buying companies in neuroscience and oncology in recent years. AbbVie’s total market value is about $416.34 billion.
AbbVie financial health
AbbVie reported total revenue of $59.64 billion. The company’s revenue grew by 20% over the past three years. AbbVie’s operating margin is 24.09%. Its net profit margin is lower, at 4%. AbbVie’s operating margin has declined over the last five years. The average yearly drop in operating margin is 8.3%. AbbVie’s current ratio stands at 0.72.Its quick ratio is 0.6, showing possible short-term cash pressure. AbbVie’s debt-to-equity ratio is -26.02, pointing to heavy leverage. The company has a Piotroski F-Score of 7, which signals good financial health, as per the report by GuruFocus. AbbVie’s Beneish M-Score is -2.71, suggesting low risk of accounting manipulation.
Valuation and market view
AbbVie’s price-to-earnings ratio is very high at 178.46. This P/E level is close to AbbVie’s highest level in the last 10 years. The high P/E suggests the stock may be overvalued. AbbVie’s price-to-sales ratio is 6.96. Its price-to-book ratio is 0. Analysts remain cautiously positive on AbbVie stock.The average analyst target price is $245.56. The analyst recommendation score is 2.1. AbbVie’s RSI is 45.45, showing the stock is not overbought or oversold. The 20-day moving average is $226.14. The 50-day moving average is $226.40. The 200-day moving average is $206.24. These averages suggest stable trading behavior. Institutional investors own 75.19% of AbbVie shares.
Risks and challenges
AbbVie’s Altman Z-Score is 2.1, placing it in a financial grey zone. This score shows some level of financial stress. The stock’s volatility is measured at 22.56. AbbVie’s beta is low at 0.09, meaning lower market risk. The company faces risks from regulations and strong drug competition.AbbVie is in advanced talks to buy Revolution Medicines. The Wall Street Journal cited people familiar with the matter. Revolution Medicines shares rose nearly 30% after the report. AbbVie shares were up more than 5% following the news. AbbVie has spent over $20 billion on acquisitions since 2023.
These deals aim to replace lost revenue from Humira, as stated by Reuters. Humira lost patent protection, hurting AbbVie’s sales. A deal could be finalized soon if talks do not face last-minute issues. No official deal value has been announced yet. Revolution Medicines has a market value of over $15.4 billion. With a normal takeover premium, the deal could be worth $20 billion or more.
FAQs
Q1. Why did Revolution Medicines stock jump so much?Because reports said AbbVie is in advanced talks to buy the cancer drug company, which excited investors.
Q2. Why does AbbVie want to buy Revolution Medicines?
AbbVie wants to grow its cancer drug business as older medicines like Humira lose patent protection.
