AbbVie (ABBV.N), opens new tab will buy an experimental depression drug from partner Gilgamesh Pharmaceuticals for up to $1.2 billion, the companies said on Monday, seeking to access a fast-growing market for psychedelic-based treatments.
The deal is the latest in the more than $20 billion AbbVie has spent on acquisitions since 2023 for drugs that can drive growth as its flagship rheumatoid arthritis treatment, Humira, lost patent protection.
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The companies had signed a partnership last year to develop therapies for psychiatric disorders, with privately held Gilgamesh set to receive up to $1.95 billion in option fees and milestone payments.
The deals with Gilgamesh, which is also developing treatments for anxiety and post-traumatic stress disorder, also launch AbbVie into the race to develop psychedelic compounds for psychiatric conditions – a potential $50 billion market, according to Cantor Fitzgerald analyst Josh Schimmer.
Earlier this year, Johnson & Johnson’s (JNJ.N), opens new tab ketamine-derived Spravato became the first psychedelic-based standalone treatment for patients with severe depression to be approved by the U.S. Food and Drug Administration.
Compass Pathways (CMPS.O), opens new tab, Atai Life Sciences (9VC.DE), opens new tab, Cybin (CYBN.NLB), opens new tab and MindMed (MNMD.O), opens new tab are some others developing psychedelic-based treatments for psychiatric conditions.
“Large Pharma has been less active exploring psychedelic compounds due to potential regulatory concerns … making today’s deal more significant,” said BMO Capital Markets analyst Evan Seigerman. The deal value appearing discounted could reflect the concerns, he said.
The deal, which includes an upfront payment and development milestones, could also bolster AbbVie’s neurological conditions portfolio after its experimental schizophrenia drug, which it gained access to through an $8.7 billion purchase of Cerevel Therapeutics, failed in two mid-stage studies last year.
Gilgamesh’s lead candidate for depression, bretisilocin, activates the 5-HT2A serotonin receptor — also targeted by classic psychedelics such as psilocybin, found in magic mushrooms, and LSD.
The companies said bretisilocin has been shown to exert a shorter duration of psychoactive experience while retaining an extended therapeutic benefit in early and mid-stage studies.
AbbVie will advance the drug into late-stage studies.
