AbbVie's $1B Deal to Buy Gilgamesh Pharmaceuticals Boosts Psychedelic Stocks.

AbbVie is reportedly in talks to acquire Gilgamesh Pharmaceuticals in a $1B deal, according to Bloomberg News. The potential acquisition has rallied the psychedelic drug sector. The deal would be a significant move by AbbVie into the psychedelic drug market.

AbbVie, the global pharmaceutical company, is reportedly in discussions to acquire Gilgamesh Pharmaceuticals for approximately $1 billion, according to Bloomberg News [1]. This potential acquisition, if finalized, would mark a significant move for AbbVie into the psychedelic drug market and could have a notable impact on the broader biotech sector.

Gilgamesh Pharmaceuticals, a biotech company specializing in psychedelic drug research, has recently seen its share prices rise following the rumors of the acquisition. The company's most advanced drug, GM-2505, has shown promising results in treating depression and other mental health conditions. The acquisition would provide AbbVie with access to Gilgamesh's experimental therapies, potentially diversifying its neuroscience research portfolio.

The deal would also align with AbbVie's business development strategy, which has seen the company ink several deals in the psychiatric disorders space. In recent years, AbbVie has partnered with Gedeon Richter and acquired Cerevel Therapeutics, demonstrating its commitment to bolstering its pipeline of treatments for psychiatric disorders.

For Gilgamesh, accepting a buyout bid from AbbVie would provide the necessary funding to continue developing its pipeline programs. The biotech company last disclosed an investment in December 2022 when it raised a $39 million series B round. However, its two lead programs, GM-2505 and GM-1020, are not covered by that funding agreement.

The potential acquisition has also buoyed investor confidence in the psychedelics sector. Shares of companies like Cybin, Mind Medicine, and GH Research have seen increases in their share prices, reflecting the growing interest in psychedelic drug development. Analysts have noted that the field has shown "transformational" potential across various mental health disorders and that the FDA has issued guidance to speed up the testing and approval of psychedelics.

While the acquisition would be a significant move for AbbVie, it is not guaranteed. The company has not yet commented on the report, and the deal could still face challenges. Additionally, some psychedelic developers may be hesitant to come to the negotiating table, as medium-sized companies have demonstrated that brain drugs can be successfully commercialized without big pharma resources.

References:
[1] https://www.fiercebiotech.com/biotech/abbvie-talks-over-1b-buyout-crowns-gilgamesh-its-next-ma-target-report
[2] https://www.biopharmadive.com/news/psychedelics-dealmaking-wall-street-abbvie-gilgamesh/756496/