AbbVie (ABBV) Stock Drops as Company Denies Revolution Medicines Acquisition Reports

TLDR

• AbbVie denied reports it is in advanced talks to acquire Revolution Medicines, stating it “is not in discussions” with the cancer-drug developer
• Revolution Medicines shares dropped 11.5% in extended trading after the denial, following a nearly 30% gain during regular trading
• The Wall Street Journal had reported AbbVie was pursuing Revolution Medicines, which has a market value around $20 billion
• AbbVie separately cut its 2025 profit forecast to $9.90-$9.94 per share from $10.61-$10.65, citing a $1.3 billion fourth-quarter charge
• Revolution Medicines develops experimental drugs targeting RAS, a molecular driver in lung cancer, pancreatic cancer and other tumors

AbbVie issued a direct denial Wednesday evening regarding reported acquisition talks with cancer-drug biotech Revolution Medicines. The statement came hours after the Wall Street Journal reported the drugmaker was in advanced discussions to buy the company.

Earlier in the day, Revolution Medicines had surged nearly 30% based on the acquisition reports. The stock closed with a market value around $20 billion.

AbbVie Inc., ABBV

AbbVie shares fell 1% in extended trading after the denial. The stock had closed 4% higher during regular trading hours.

The Journal’s report suggested multiple suitors had shown interest in Revolution Medicines. No deal value was included in the initial reporting.

Including a typical acquisition premium, Revolution Medicines could have been valued at $20 billion or more. The company declined to comment on the reports, citing company policy on rumors and speculation.

Profit Forecast Cut

AbbVie separately announced a reduction to its 2025 profit forecast. The company flagged an expected $1.3 billion charge tied to in-process research and development expenses in the fourth quarter.

The drugmaker now expects full-year adjusted earnings per share of $9.90 to $9.94. This compares to its prior range of $10.61 to $10.65.

The charge represents a hit to the company’s near-term financial outlook. AbbVie has been actively pursuing acquisitions to offset revenue losses.

Recent Acquisition Activity

AbbVie has spent more than $20 billion on acquisitions since 2023. The buying spree comes as its flagship rheumatoid arthritis treatment Humira lost patent protection.

The company bought Pharmacyclics and its blood-cancer treatment for $21 billion in 2015. More recently, AbbVie acquired ImmunoGen and its ovarian-cancer treatment for $10 billion in 2024.

AbbVie generates about half its yearly revenue from immune condition treatments. These include drugs for psoriatic arthritis and Crohn’s disease.

Revolution Medicines focuses on drugs targeting RAS. This molecular driver plays a role in many cancers including lung and pancreatic tumors.

The biotech’s experimental drugs remain in development. Some haven’t entered human testing yet, according to the company’s website.

Drug researchers have pursued ways to inhibit RAS for decades. The target’s important role in cancer makes it valuable for drugmakers.

Revolution Medicines’s RAS research stems from work by Harvard scientist Gregory Verdine. He helped establish Warp Drive Bio, which found molecules attacking the target by sequencing bacterial genomes.

A person familiar with the matter told the Journal that a deal hadn’t been finalized. Another suitor may still prevail in pursuing Revolution Medicines.

AbbVie has a market value above $400 billion. The company has said it prefers acquiring mechanisms and technologies that can power growth over the next decade rather than proven assets alone.

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