AbbVie makes bold move in Alzheimer’s market with $1.4bn Aliada buyout—Is it a gamble?

AbbVie, the renowned American biopharmaceutical giant, is set to acquire Aliada Therapeutics for a staggering $1.4 billion. The acquisition grants AbbVie control over Aliada’s promising Alzheimer’s treatment, ALIA-1758, and the biotech’s innovative Modular Delivery (MODEL) platform, which could overcome significant barriers in treating neurological disorders, particularly Alzheimer’s disease.

Key Drivers Behind the Acquisition

AbbVie aims to expand its neuroscience division, with Alzheimer’s research positioned as a core growth pillar. Aliada’s MODEL platform has shown potential in traversing the notoriously challenging blood-brain barrier, a hurdle that has long stymied Alzheimer’s drug development. AbbVie sees this acquisition as a pathway to developing next-generation treatments that enhance drug delivery to brain tissues. This deal is expected to close in Q4 2024, pending regulatory approval.

The Scientific Edge of Aliada’s Technology

The focal point of the acquisition, ALIA-1758, targets pyroglutamate amyloid beta, similar to Eli Lilly’s Alzheimer’s candidate, but with distinct targeting mechanisms. ALIA-1758 engages receptors abundant in brain endothelial cells, facilitating better drug delivery by leveraging transferrin receptors to cross the blood-brain barrier. AbbVie’s R&D EVP Roopal Thakkar highlighted that Aliada’s technology aligns seamlessly with AbbVie’s focus on CNS diseases, potentially enhancing its efforts to deliver therapeutics that effectively reach brain tissues.

Financial Implications and Investor Sentiment

Analysts have praised the acquisition as a bold but risky move, especially given that Alzheimer’s therapies often come with high development costs and uncertain outcomes. BMO Capital Markets analysts view it positively, citing its alignment with AbbVie’s established neuroscience pipeline, which already includes experimental Alzheimer’s therapies like ABBV-916 and ABBV-552. However, Stifel analysts remarked that it may not be without risk, considering the waning investor interest in amyloid-targeted treatments.

Industry Context: Alzheimer’s Drug Market Growth

AbbVie’s acquisition follows a trend where major pharmaceutical companies are vying for breakthroughs in the Alzheimer’s market. The drug developer’s peers, such as Biogen and Eli Lilly, have made strides with drugs like Aduhelm and Leqembi, which target similar amyloid plaques. With the demand for effective treatments growing and over 50 million Alzheimer’s cases globally, AbbVie’s acquisition signals a long-term commitment to this challenging field, while diversifying its portfolio beyond its major revenue-driving drugs like Skyrizi and Rinvoq.

A Strategic Step with High Stakes

AbbVie’s purchase of Aliada Therapeutics illustrates its strategic pivot into complex neurological therapies. As it broadens its investment in Alzheimer’s research, the acquisition could pave the way for transformative treatments. While the market responds cautiously, AbbVie is positioning itself to capitalise on emerging opportunities in Alzheimer’s therapy, potentially reshaping the landscape of neurodegenerative disease treatment.